When the Post Office Savings Bank bill was introduced into the House of Commons, the proviso that the scheme to be founded upon it should be self-supporting, formed an important consideration in the statements of the Chancellor of the Exchequer, and was strongly urged by other members. It appears that from the first the operations have not only been self-supporting, but exhibit each year an additional amount of assets over liabilities, as the balance-sheet for last year (given in the Appendix) will show. According to the Parliamentary Paper No. 523, it was estimated that the cost of each transaction in the Post Office Banks would be 7d.; the actual average cost of each transaction up to the present time has been 6⅞d. We have no doubt, as bearing on the point of the cost of the Postal Banks, the following estimate (which, as proved by the actual result, has been so accurate) will possess an interest to the general reader. It is an estimate of the cost of One Hundred Thousand transactions under the Post Office Savings Bank bill, assuming the proportion of deposits to withdrawals and of transactions to accounts to be the same in the Post Office Banks as in the existing Savings Banks, when the former shall be in full operation:—
| £ s. d. | |
| Estimated cost of receipts and payments by Postmasters | 210 0 0 |
| Estimated cost of transmission to central office, including check on receipts and payments, &c. | 690 0 0 |
| Estimated cost of keeping accounts with depositors, including calculation and entry of interest, periodical comparison of depositors' books, check on withdrawals, preparation of general accounts, stationery, and other miscellaneous items and general management | 1,750 0 0 |
| 2,650 0 0 | |
| To which may be added, 10 per cent. as a margin foromissions or errors of computation | 265 0 0 |
| Total cost of 100,000 transactions | £2,915 0 0 |
We will now conclude this chapter with a rapid survey of the peculiar advantages of the system of Post Office Banks, with some remarks on what may be called the deficiencies of the system.
The system of Government banks seems exactly to meet the points most required by those whom the older kind of banks had no power to attract, as well as of that considerable class who, rather than not save at all, would save under inconveniences which they were powerless to remove. For years it was impossible to provide the conditions and meet the wants of the poor in these respects, but there can be no doubt that they have now been met. These conditions, these wants, were absolute and unquestioned security for their money; despatch, both as to depositing and withdrawing money; and secrecy in the transactions in which they should engage.
With regard to Security. The Post Office Banks being part of the machinery of Government itself, offer the highest possible security,—the whole credit and solvency of the British Government being guarantee for the perfect safety of the deposits.[191]
As to Despatch. To the poorer classes, as much, and perhaps more than to any others, time is money. Their time is not their own, and now a few minutes may be stolen from the dinner-hour, or an opportunity may be snatched as the labourer passes to and from his work, to do that which before was no ordinary or agreeable task to him. The unparalleled convenience which attends the transaction of his business contributes to this despatch and this saving of his time. Should misfortune overtake him, he may withdraw the whole of his deposits within two or three days; should his occupation compel him, or his tastes incline him, to move frequently about from place to place, he has only to carry his bank-book about with him, and he may withdraw sums at his convenience at any Money Order Office in the kingdom; and thus, though he may have originally deposited his money at the Land's End, he may draw it out when at John o'Groat's, or in some remote nook of Ireland. This arrangement is, we understand, taken advantage of to a large extent. The advantages offered in the quick withdrawal of money is also a most important feature. Enormous sums of money are wasted by the poor in borrowing for an emergency; there can be no doubt that much money has been and is wasted even in waiting till the time arrives to get the money out of the ordinary Savings Bank. “If a poor person,” says an intelligent writer, “wants 4l. immediately, he would give 25 per cent. for it.” Few could lose in having to wait a couple of days for their money.[192]
Then as to secrecy. None are more jealous of their little savings being known than the poorer classes: a large number of operatives have cogent reasons for secrecy, or, at any rate, privacy. Indeed, it seems to have been agreed upon that, if these classes cannot keep their savings quiet, many will not save at all. The wage-receiving class are naturally and properly averse to bringing their savings under the notice of their masters or their masters' friends. Savings Bank managers, even when not masters of workmen themselves, are generally local dignitaries well known to such.[193] In the Postal Banks there is, or need be, no occasion for particular observation; the officials are required to conciliate confidence; to observe the strictest secrecy; and it is our conviction, gathered after no inconsiderable experience, that nowhere so much as in Government offices is the work conducted without distinctions of class.
Next to the advantages of which we have just spoken, is that secured by the arrangement to undertake the receipt and accumulation of small sums. A working man may now take his shilling to the Savings Bank as readily as his master may take his pounds, and the former will have no occasion to feel that he is made the object of a charitable clause. In seeking to bring a working man to put by a shilling in its bank, the Government hopes to induce a habit of saving, and may fairly expect to take his larger sums when saving habits have been induced. Mr. Gladstone's decision to take sums as low as a shilling was almost universally accepted as a wise one. Mr. Gladstone had long interested himself in the condition of the workman, and no one knew better than he that the labouring classes are not suddenly masters of whole pounds, and that, when they are in the act of accumulating it, the temptations to break in upon the little stock laid by are ever present, and are often too strong to resist.
So far the principles of this important measure are admirable ones, scarcely admitting of question, almost beyond criticism: they have rendered the action of the banks simple, facile, all-comprehensive, and ubiquitous. The rate of interest given is, however, perhaps on the border-land, as it were, between unquestionable and questionable policy. The interest given to depositors in Post Office Banks is at the rate of two pounds ten shillings per cent. per annum, or one halfpenny per pound per month. That this rate is satisfactory to a large section of the people of this country, or that the other attractions of the Post Office Banks amply counterbalance the disadvantage of the low rate, is evident from the enormous sum—twelve millions sterling—deposited in those banks in little more than four years; at a time, too, when the old Savings Banks, which are enabled to pay ten shillings per cent. more than the others, have put forth their best efforts to keep the business in their hands, when all kinds of allurements have been held out to those who have surplus funds to dispose of, and when the rate of interest ruling in the Money-market has been, as it still is, exceptionally high. These facts ought perhaps to close the case, and make the interest rate, if not one of the recommendations of the measure, at any rate a part of the scheme which does not detract from its merits as a whole. As, however, this is a point upon which some little soreness is felt and expressed in different quarters, we may be excused for here urging a consideration or two.
This soreness has originated, to no little extent, from the consideration of the inequality of the rate allowed in the ordinary Savings Banks and the Post Office Banks; this feeling is kept up by the consideration of the fact, that that inequality still exists and is likely to exist. The old Savings Banks deposit their funds with Government, and are allowed interest on their money at the rate of 3l. 5s. per cent.; the Post Office Banks, of course, deposit their money with Government, and are allowed interest at the rate of 2l. 10s. per cent. Out of the fifteen shillings per cent. difference between the two rates, an average of half of it is given by the old banks to their depositors. Now it is well known that the average cost of each transaction in the Post Office Banks is little more than half the average cost of a transaction in the ordinary Savings Banks. If Government can still afford to pay the old Savings Banks the higher rate of interest, it might afford, at the lowest computation, to give ten shillings per cent. more to depositors in the Post Office Banks. If Government cannot afford to pay the higher rate, it ought to discontinue its charity, which, like all other charitable doles, excites discontent amongst those who think they have, and really have, the right de facto, if not de jure, to share it. That the rate should be equalized in one way or the other admits, we think, of little question; but that the Government should pay no more than it can pay without loss admits of less.