A History of Banks for Savings in Great Britain and Ireland

by William Lewins

The principle being admitted, there would be no insuperable difficulty in arranging the details.

John Bullar.

Temple, November 8, 1856.

This memorandum was written in November, 1856. Mr. Bullar describes that at that period he was too much occupied to enter into the matter so fully as was necessary, or to agitate by means of the press for some such scheme; but Mr. Bullar's friend, Mr. Joseph Burnley Hume (eldest son of the late Mr. Joseph Hume, M.P.), who had some leisure at command, and perhaps some of his father's desire to achieve an amendment of the Savings Bank system, undertook to bring the matter forward in the proper official quarters. He early saw Mr. Frederic Hill, who was in charge of the Money Order department of the Post Office, and learned from him that the same scheme had already been suggested to the Post Office, and rejected after full consideration. A month afterwards Mr. Hume saw the Duke of Argyll, who was then Postmaster-General, and received a courteous hearing from him. The Duke also said that the Post Office had had the question, or something like it, before them, and that he thought the Chancellor of the Exchequer still had something of the kind under consideration; but gave no definite reply. Subsequently he saw Sir Alexander Spearman, the Comptroller of the National Debt Office, and Mr. Tidd Pratt. “He gathered from them,” to use Mr. Bullar's own words, “that they were with him in principle, but regarded the proposed Money Order department as visionary, and that the Government had under consideration a different scheme, which they preferred.”[161] Having in this way met with enough discouragement to hinder them—or any other person who might be cognizant of the proceedings that had been taken—from going further, they dropped any further steps to bring about this desirable change.

Happily, however,—for happy, in one sense, it was,—these schemes and the hitherto abortive attempts to carry them into execution, did not reach the public ear, or others might have desisted from entertaining similar plans. As it was, it was still open to any one else to take up the matter de novo; and this is what actually did happen. We can well believe, without the assurance with which he has favoured us, that the next adventurer in these apparently difficult seas had no notion that they had been previously navigated. This circumstance does not take from his merit; but it certainly increased his difficulties. How the matter was eventually brought about in the face of the adverse decisions which we have just given, though somewhat better known, is within our province to tell.

In the hands of Mr. Sikes, of Huddersfield, any matter once taken up was not likely to fail for want of thorough ventilation and earnest advocacy. This gentleman had for years interested himself in the extension of Savings Banks. We have already spoken of the fruits of his industrious pen; and now he was once more to propose in a similar manner, and with his accustomed eagerness, another new scheme which he had carefully thought over and developed in his own mind. Once sure of it himself, he resolved to devote himself to its advocacy; to bring it not only before the proper authorities, “but before the public, at the proper time.” Mr. Sikes evidently did not dally with the matter. As he made no sort of mention of the Post Office in his evidence before the Savings Bank Committee of 1858, we may fairly assume that at that time the idea of using the Post Office had not occurred to him. He himself states, that, occupied with a favourite idea which he had long cherished, of bringing a Savings Bank “within less than an hour's walk of the fireside of every working man in the kingdom,” the organization of the Post Office suddenly occurred to him, and he dwelt upon it till he had struck upon some scheme for applying the one to the other.

As in the case of the other proposals, the leading principle of Mr. Sikes's plan was to employ the machinery of the Money Order Office to collect and forward deposits to a central bank which he proposed should be established in London. Among the principal details of the plan were—the opening in every town, not previously supplied with a Savings Bank, of a Money Order Office, for the reception of Savings Bank deposits; that the money should be remitted to London in the form of Money Orders; that the deposits should be in sums of not less than a pound; and that in return for these deposits or remittances, Savings Bank “Interest Notes” should be issued in London; and that the interest on these notes should be at the rate of 2½ per cent. per annum. That Mr. Sikes did not proceed boldly enough, and that there were some defects and omissions in his scheme, we shall have to show further on; here it is sufficient to indicate in what his plan consisted.

On the reasons for a large and comprehensive reform of this kind, Mr. Sikes was most full and explicit; as, however, we have already been over this ground, and also said much in connexion with the name of this energetic Savings Bank reformer, it is quite unnecessary to repeat here his well-arranged statistics and his generally conclusive observations as they are given in the pamphlet before us.[162] Suffice it to say, that he adduced abundant evidence to show that additional facilities were required, and that if they were given, a proportionate increase of business would be the result; that the existing banks were totally inadequate to meet the requirements of the provident poor, much less to stimulate and increase the number of provident people; and that if his plan, or something like it, were carried out, both objects would be gained. Mr. Sikes argued that in a case of this sort, as in many others, increased facilities would bring increased business, and, in support, he adduced as an instance the Money Order Office itself. Quoting from the Postmaster-General's report for 1856, he gave an extract accounting for the increase of business in that office by the fact of the large additions that had been made to the number of Offices, and to further relaxations in the regulations regarding the issue and payment of Money Orders. “The establishment of a Post Office,” said Mr. Sikes, with very great truth, “has unfailing influence in developing the correspondence; and of the Money Order Office, the remittances of a district.” Mr. Sikes then instituted a comparison which, though not always to the point (for reasons quite obvious), was scarcely an unfair one, of the relative progress of Savings Banks with their small improvement as to facilities, and the Money Order Offices, with their increased facilities. Within the years 1846 and 1858, the former had progressed at the rate of seven and a half per cent.; the business of the latter had increased at the rate of seventy-nine per cent. He then asked if the stagnation in the business of Savings Banks was not to be traced to the non-increase of their number, their absence in many very populous localities, the slight accommodation given, and the arbitrary routine, and restrictions imposed. If Savings Banks were worth anything, were they not worth improving? And would not those supplementary banks do much themselves, and very probably cause an improvement in existing ones?

Having matured his plan in June, 1859, Mr. Sikes communicated it to Mr. Edward Baines, the member for Leeds, in the form of a printed Letter; and this gentleman, well known for his wide sympathy with the industrious classes, after studying its details, expressed his warm approval of the project, and engaged to bring it under the notice of Sir (then Mr.) Rowland Hill, the Secretary of the Post Office. That there was now no indisposition—if ever there was—on the part of the authorities to such a measure is evident from the reception it met with at their hands, as shown by the letter below.[163] Encouraged to persevere, Mr. Baines and Mr. Sikes had an interview with the Secretary and some of the principal heads of departments at the Post Office, when the draft of a plan was read to them for working such a measure, the official gentlemen concerned assuring them that this might be done “with great ease and simplicity.”

The next step which Mr. Sikes took was to place himself in communication with the Chancellor of the Exchequer; and as a preparatory step, he printed his scheme afresh, extending it somewhat, in the form of a Letter to Mr. Gladstone. The communication was met by a cordial acknowledgment, in which that right hon. gentleman promised his best attention in examining the scheme, not only on account of the interest attaching to the subject, but “of the authority with which it was invested,” in proceeding from the quarter whence it did. The letter was then given to the public, and immediately attracted general attention, and warm expressions of approval. It was read before the Social Science Association which met in Bradford in the autumn of that year, Lord Brougham having also mentioned the matter in his inaugural address. For a few weeks it was a common subject of discussion, public opinion being somewhat divided as to its advisability as well as practicability. Several Liberal newspapers, however, went warmly into an advocacy of the principles of the measure, if not of the measure itself; and in the early part of November, 1859, the members of the Huddersfield Chamber of Commerce strengthened the hands of their townsman, by passing an unanimous sentence of commendation upon it; and not only so, but they resolved to send Mr. Sikes's tract to all the Chambers of Commerce in the kingdom, recommending them to support the plan, which several of them eventually did.