A History of Banks for Savings in Great Britain and Ireland

by William Lewins

Lord Colchester, an ex-Postmaster-General, admitted the merits of the plan, but doubted the ability of the Post Office officials to carry on the work in every town. Among the Lords, however, the strongest and bitterest opponent of the measure was Lord Monteagle of Brandon (once Chancellor of the Exchequer as Mr. Spring Rice).[175] He made a long speech on this occasion. He thought it was wrong to establish new banks, or to make them rest on the deficiencies of the old ones, inasmuch as it was easy to improve the latter. He went into the history of Savings Banks, and endeavoured to show that their progress up to 1850, (a fact which no one disputed,) had been far from slow. As, however, it was the period principally between 1850 and 1860 when they were most stationary, this was the time with which he should have dealt. He expressed an opinion that the Post Office would not be equal to the work. He strongly urged the inexpediency of giving increased funds to the Chancellor of the Exchequer, with which to speculate. And this measure would tend to destroy the healthy feeling which was growing up between the higher and the lower classes, through the medium of Savings Banks. Not only did the higher classes give their time and energy to the work of Savings Banks, but they gave their money too; and Lord Monteagle was unlucky enough to cite the case of several noble lords who paid a thousand pounds each to atone for their neglect in connexion with a Hertfordshire Savings Bank, and the fraud there, which we have previously described at length. “Such was the spirit,” triumphantly exclaimed the noble lord, “which this bill proposed to crush.” Not less unfortunate was Lord Monteagle, as the result has proved, in his endeavour to be amusing and prophetic. “The only comfort,” said he, “which I have derived from the speech of the noble lord who moved the second reading, was his assurance that the measure was to be of an experimental character.” Under such circumstances he would not trouble the House with a division, as he would await without much anxiety the result of the “experiment!” Next year, they would see whether the working of the new system would compare with that “which for nearly half a century had been the glory of England, and had served as a model for all Europe.” Lord Redesdale also strongly opposed the bill, but he did not bring to its consideration much of the practical knowledge of the preceding speaker. He “frankly owned” that, from what he understood “would be the manner of keeping the accounts, they would soon get into a state of confusion, out of which extrication would be almost impossible.” From the confusion of the above sentence, it is not impossible that the attempt to understand the mode of keeping the accounts had confused the speaker. Curiously, too, the same speaker objected to one of the most convenient clauses of the bill. He called the proposed mode of transfer of deposits from one bank to another, an unnecessary arrangement, saying it would be much better that the parties themselves should take it out of the one, and put it into the other bank. Acquaintance with the habits and wants of the poorer classes would have convinced Lord Redesdale to the contrary. Lord Redesdale said, in concluding, that “he was afraid the scheme would produce much disappointment to the public, and a great loss to the nation.” The Marquis of Clanricarde gave a very qualified and hesitating adhesion to the bill. Lord Stanley of Alderley satisfactorily replied to the arguments that had been adduced, and the bill was then referred to a Committee of the whole House.

On the 25th of April the bill passed the Committee. Four days afterwards, Lord Monteagle again opposed it, saying that he saw, “with great alarm and regret,” what seemed to him to be meant to produce a break-up of existing Savings Banks, and the substitution of the action of a salaried Government department for what he might call a great public charity, directed by benevolent persons acting gratuitously in their own neighbourhood. He went over the ground he had taken only a few days before, but in a spirit very much more subdued and less confident; and when the bill passed, he entered a long and laboured “protest” against it (vide Hansard, vol. clxii. page 1213, where many more of Lord Monteagle's “protests” may be found). The Post Office Savings Bank Act, which we give in extenso,[176] received the Royal Assent on the 17th of May, 1861.

[152] From this statement the ten or twelve principal banks in the country, many of which are open every day, and all in a flourishing financial condition, are of course excepted.

[153] Tracts on Poor Laws and Pauper Management, included in the Works of Jeremy Bentham, edited by Sir John Bowring, vol. viii. edit. 1843, page 408. The punctuation and the italics of the above extract are Bentham's own.

[154] A little Handy Book on the subject, published in 1861, by Mr. H. Riseborough Sharman, one of the Editors of the Insurance Gazette, and which deservedly had a large sale, went over very ably, though in a way which produced considerable acrimony from some portion of the public press, some of this ground. Though it is open to question whether at so early a date it was not premature, and, whether in the peculiar form of a manual for intending depositors, it was wise to enter upon a discussion of these points, it is certain that by means of this pamphlet and other advocacy, Mr. Sharman laboured very hard and very zealously to prepare the public mind for the adoption of the scheme of Postal Banks, and to spread a knowledge of their benefits after the measure had become law.

[155] Duties of the Public with respect to Charitable Savings Banks. Dublin 1852.

[156] On the present State of the Savings Bank Question. Dublin, 1855.

[157] Mr. Sharman's Handy Book, p. 10, 2d edit.

[158] Mr. Sharman's Handy Book, p. 11, 2d edit.

[159] It is pretty generally known, that no profit whatever accrues to the Post Office on orders for which threepence only is charged; yet in spite, as it were, of this fact, we find that Mr. Scratchley, in his Practical Treatise, takes up Mr. Ayrton's proposals, and “recommends” that “Money Order officials receive deposits on behalf of the nearest Savings Bank,” and “that this should be done at a cost to the depositor of one penny for any sum not exceeding 5l.” “It is also,” adds Mr. Scratchley, “very desirable that the valuable privilege of freedom from postage recommended by Mr. Whitbread should be granted for the books and documents required to be transmitted on behalf of Savings Banks.” Mr. Whitbread, it will remembered, made this one of the conditions of his scheme of National Banks; and it is quite evident that none but National institutions could obtain such a provision. “The valuable privilege of freedom from postage,” would, we should think, be considered very desirable by a variety of different societies and interests, if only they could obtain it!