A History of Banks for Savings in Great Britain and Ireland

by William Lewins

Of the scheme of Life Insurance at present in force in the Post Office, for example, we spoke in the previous chapter. With regard to sickness, a certain time is allowed for full pay; another definite period for half-pay. In respect to Superannuation Allowances, which we have termed the Deferred Annuities, it is true that at one time civil servants were required to pay towards it out of their salaries; but this has been discontinued by Act of Parliament, and the present arrangement may simply be considered as a small rise in the rate of wages—the deduction being compulsory on all classes alike.

Why should not a similar plan, or at any rate the principle of it, be urged upon private employers? Spite of some of the difficulties which would at once present themselves, we believe that there is little impracticable about it, and little that might not be surmounted. Even if it should be found impossible to apply such arrangements to many concerns, there is still the admirable machinery designed in connexion with the Annuities Act of 1864; and we again commend the plan to the attention and candour of large employers.

We think that to a very large extent the influence which masters must exercise over their workmen, or which they could not fail to exercise if they were to show a proper degree of interest in their subordinates, has never yet been exercised. If reason, persuasion, entreaty of a certain kind, alike fail—as they may often have done—to induce saving habits and due provident provision for themselves and families, we confess a difficult problem presents itself. This difficulty has been felt for years. Forty years ago the Quarterly Review, in an able article, said that Savings Banks ought to have formed a sinking fund before that time for the abolition of poor rates: “If the present state of things continues,” says the writer, “it should become a question whether the master ought not to deposit in the Savings Bank at least a shilling in the pound of all wages paid by him, to be placed to the account of the individuals whom he employs.” Several times since this was written, the Quarterly Review has returned to the charge. For many years our system of Poor Laws has rigidly assessed property for the relief of poverty, and secured the necessaries of life for all the destitute, no matter how largely they themselves may have been answerable for their destitute condition. With some beneficial changes the law stands the same, and is scrupulously enforced.

It is very clear that many men's wages are so high in good times, that, if they worked steadily and lived with moderation, they might easily reserve out of them a fund of supply against times of want, which would carry them through till their trade revived. The immense power in the hands of the working classes to promote their own self-dependence is illustrated by the enormous sums spent by these classes alone in mere indulgence; and it is shown again, in the immense funds raised amongst them to support combinations and strikes. That thousands will not use the means they have is proved by their excesses, their prodigality, the recklessness of their expenditure, the division of the days of the week into days of work and days of gross and obstinate idleness; and in much of this—regarding the result which follows to themselves, their wives and families, if they have the misfortune to have them—there is perhaps more real delinquency than in many of the crimes for which penal statutes have been framed.

The question is at any rate admissible, whether the same power which can order a compulsory payment of rates to support the poor, might not, and ought not, to restrict the means by which men are made and kept in poverty; or whether the same laws which make the frugal support the improvident should not also compel the improvident to do something to support themselves. This principle is indeed recognised by Government, as we have already shown, in the arrangements made for its own servants; it is therefore not a question so much of principle as of degree, and whether the Government should insist on a measure of coercive contribution applying to others beyond their control. “I have often thought,” said the late Mr. J. Silk Buckingham, in a letter now before us, “it would be perfectly wise and just to pass a law compelling all employers of labour of every class, age, and sex, to deduct five per cent. from the wages or salaries of all in their employ, to be invested in the Government funds for a Deferred Annuity after sixty years of age, giving power to the labourers themselves to make further additions as they saw fit on the voluntary principle. If it should be said that no Government has a right to make people provide for themselves by force of law, I am sure they have as great a right to do this as to make the honest, sober, and industrious part of the people pay in poor rates and taxes for maintaining paupers and criminals, who have become so chiefly through want of prudential conduct in youth.”[214]

Finally, it is upon those who will not, and cannot by any available means, be brought to apply the remedy of provident investments during the heyday of life for themselves, that we think some such arrangement as that upon which the Government insists on employing civil servants, should be brought to bear, and that, only as a dernier ressort, our Legislature should consider whether it were not possible, and within its province, to apply a more complete and direct remedy by force of law. Formidable obstacles, we repeat, may be imagined, and actually would be experienced, in either case; but they could easily be smoothed by the fifty years' experience which the country has had of Savings Bank management and the conduct of provident schemes generally, and they may very possibly be entirely removed by the far-reaching, simple, ancillary measures of the last four years.

[206] “To save money,” says Mr. Greg, “and to have invested it securely, is to have become a capitalist. To have become a capitalist is for the poor man to have overleaped a great gulf; to have opened a path for himself into a new world; to have started on a career which may lead him, as it has led so many originally not more favoured by fortune than himself, to comfort, to reputation, to wealth, to power.”

[207] “I have studied the matter to the core, and it has resulted in a firm conviction, that were all the many valuable schemes which have been devised for ameliorating the condition of the masses conjoined, for safely, surely, and reasonably meeting the exigencies of every-day life, the Savings Bank single-handed would outvie them all.”—Mr. James Frame's Tracts on Savings Banks.

[208] We are indebted to Mr. Sikes of Huddersfield for the particulars of this case.

[209] Mr. W. B. Chorley, author of a Handbook of Social Intercourse, &c. &c. was asked his opinion on co-operative societies, that opinion to be inserted in the Co-operator, the Society's organ. Mr. Chorley gives it very candidly, the Editor with equal candour giving it insertion. “The working man's earnings should be absolutely safe. Post Office Savings Banks are the only means of deposit which I am warranted in unconditionally recommending under all circumstances. I am far from saying that in peculiar cases and districts the workman may not act judiciously in joining co-operative stores; but it cannot be extended beyond a certain point with success, and I fear that any attempts to push or rapidly extend the plan over a large area will prove a mistake ending in failure and loss.” ... Mr. Smiles in his Workmen's Earnings, Strikes, and Savings, a reprint of articles from the Quarterly Review, and Mr. Greg in his Provident Investments, a reprint of an article in the Edinburgh Review, express similar views on the co-operative principle as applied exclusively to the working classes as those we have quoted from Mr. Chorley.