The first savings' banks in connexion with the post-offices of the country were established on the 16th of September, 1861. A limited number was first organized, and in places where no accommodation of the kind had ever been afforded. The extension of the scheme to Ireland and Scotland was effected on the 3d and 17th of February respectively. Nearly all the 2,879 money-order offices of the United Kingdom are now post-office savings' banks. These banks are in regular working order, 2,000, in round numbers, existing in England and Wales, 450 in Ireland, and 400 in Scotland. Many of our largest towns have several banks. Thus, at the present time, January, 1864, we find five banks in Edinburgh, five in Glasgow, twelve in Dublin, ten in Liverpool, sixteen in Manchester, ten in Birmingham, and seven in Bristol. Only seventy of the entire number of new banks have failed to obtain depositors—a fact which sufficiently proves that the advantages offered by the Post-Office establishment are understood and appreciated throughout the kingdom. Up to the end of 1863, the total number of depositors in new banks had been 367,000, of which number no fewer than 307,000 then held accounts. At present (March, 1864), the weekly deposits amount, in the aggregate, to 40,000l., while the withdrawals are no more than one-third of that sum. The total amount intrusted to the post-office banks since their first opening has been 4,702,000l., of which sum no less than 3,263,000l. remain to the credit of depositors. The most gratifying fact in connexion with the new banks is, that they show a much larger proportion of small depositors than the old savings' banks have been able to attract, the average amount of a deposit being 3l. 1s. 9d. in the new, against 4l. 6s. 5d. in the old class of banks.
Between fifty and sixty old savings' banks, including the Birmingham Bank, closed their accounts during the last year (1863), great part of the business of each being transferred to the new banks. A sum amounting to over 500,000l. has already been transferred from these banks to the Post-Office by means of transfer certificates; whilst additional sums, the amount of which cannot be correctly ascertained, have been withdrawn from the old and paid into the post-office banks in cash.
With a view to facilitate the proceedings of the trustees of banks which have been or may hereafter be closed, an Act of Parliament was passed in the last session which will doubtless have the effect of winding up the affairs of many of the smaller banks under the old plan, and increasing the work of those on the new.
The modus operandi of this scheme is as simple as it is satisfactory. On making the first deposit, under the new arrangements, an account-book is presented to the depositor, in which is entered his name, address, and occupation. All the necessary printed regulations are given in this book. The amount of each deposit is inserted by the postmaster, and an impression of the dated stamp of the post-office is placed opposite the entry, thus making each transaction strictly official. At the close of each day's business, the postmaster must furnish to the Postmaster-General in London a full account of all the deposits that have been made in his office. By return of post an acknowledgment will be received by each depositor in the shape of a separate letter from the head office, the Postmaster-General thus becoming responsible for the amount. If such a letter does not arrive within ten days from the date of the deposit an inquiry is instituted, and the error rectified. An arrangement like the foregoing shows the boundless resources which the Government possesses in its Post-Office. The acknowledgment of every separate transaction in each of the money-order offices of the three kingdoms, which in any private undertaking would be an herculean labour, involving an enormous outlay in postage alone, is here accomplished with marvellous ease, and the whole mass of extra communications make but an imperceptible ripple on the stream of the nation's letters flowing nightly from St. Martin's-le-Grand.
When a depositor wishes to withdraw any of his money, he has only to apply to the nearest post-office for the necessary printed form, and to fill it up, stating his name and address, where his money is deposited, the amount he wishes to withdraw, and the place where he wishes it paid, and by return of post he will receive a warrant, in which the postmaster named is authorized to pay the amount applied for. In this respect post-office savings' banks offer peculiar advantages. A depositor, for instance, visiting the metropolis, and having—as he may easily do in London—run short of ready money, may, with a little timely notice to the authorities in London, draw out, in any of the hundred new banks in the metropolis, from his amount at home sufficient for his needs. Another person, leaving one town for another, may, without any expense, and no more trouble than a simple notice, have his account transferred to his future home, and continue it there under precisely similar circumstances as those to which he has been accustomed. Last year this power was largely used, there being no fewer than 20,872 deposits and 15,842 withdrawals made under these circumstances, e. g. at places where the depositor is temporarily residing.[181] The facilities offered by the Post-Office in this way are unique; no other banks can offer them; and such is the admirable system adopted by the Post-Office, that complicated accounts of this nature are reduced to a matter of the simplest routine. At the end of each month the accounts of the two offices concerned in transactions of this kind are reconciled by the addition or deduction of the amounts in question, which arrangement, so far from being an irksome one, enables the Department to obtain a very valuable check upon its gross transactions. Under the old system, a depositor could only effect a transfer of his account from Manchester to Liverpool by withdrawing it from the one, under the usual long notice, and taking it to the other. This course was not only troublesome to the parties concerned, but the depositor ran the risk of losing his money, or, perhaps, of spending the whole or part of it. Under the Post-Office system, however, the transfer may be effected in a day or two, without the depositor even seeing the money, and without the smallest risk of loss. Suppose a depositor wishes to transfer his account from a bank under the old plan to one under the new, or vice versâ, the matter is one of equally simple arrangement. He has only to apply to the old savings' bank for a certificate to enable him to transfer his deposits in that bank to that belonging to the Post-Office, and when he obtains such certificate he may present it to any postmaster who transacts savings'-bank business. The postmaster receives it as if it were so much money, and issues a depositors' book, treating the case as if the amount had been handed over to him. A few days longer are required before an acknowledgment can be sent from London; but this is all the difference between the case and that of an ordinary savings'-bank deposit[182]
In the order of advantages which post-office savings' banks offer the depositor, we would rank next to their unquestionable security their peculiar convenience for deposit and withdrawal. Twelve months ago, a person might be the length of an English county distant from a bank for savings. Under the present arrangement, few persons will be a dozen miles distant from a money-order office, whilst nine-tenths of the entire community will find the necessary accommodation at their very doors. As new centres of population are formed, or as hamlets rise into flourishing villages, and the want of an office for money-orders becomes felt, the requirement will continue to be met, with the addition in each case of a companion savings' bank. Again, the expenses of management—amounting to a shilling in the old banks for each transaction, against something like half that amount in the new—will not allow of the ordinary banks being opened but at a few stated periods during the week. The post-office savings' bank, attached as it is to the post-office money-order office, is open to the public full eight hours of every working day.
Sums not below one shilling, and amounts not exceeding thirty pounds in any one year, may be deposited in these banks; depositors will not be put to any expense for books, postage, &c. and the rate of interest to be allowed will be 2½ per cent.—a sum which, though not large, is all which it is found the Government can pay without loss. It is not thought that this low rate of interest will deter the classes most sought after from investing in these banks. The poorer classes, as a rule, regard the question of a safe investment as a more important one than that of profits, and wisely think far more of their earnings being safe than of their receiving great returns for them.
This scheme, last and best of all, must help to foster independent habits among the working population. Their dealings with the post-office banks are pure matters of business, and no obligation of any sort is either given or received. The existing banks, on the other hand, partake largely of the nature of a charity. An objection frequently urged against savings' banks with much bitterness is, that many great employers of labour are on the directorate of such institutions, and that, consequently, they are able to exercise an oversight over their characters and savings, not always used for the best of purposes. In the Committee of Inquiry to which we have already alluded, cases—designated "rare," we are glad to add—were adduced, from which it appeared that provident workmen's wages had been reduced by their employers, upon the ground of their being already well enough off. No such considerations, however, can affect the new banks: postmasters are forbidden to divulge the names of any depositor, or any of the amounts which he or she may have placed in their hands.[183] The advantages of these banks are so obvious, and the arrangements under which they are worked are of such a simple nature, that they cannot help but be increasingly useful and successful. Moreover, they are so accessible, that the working man, especially, requires nothing but the will to do that which his everyday experience tells him is so necessary should be done for the comfort of his family and home.
FOOTNOTES:
[180] The case of a fraud of this kind was mentioned by Lord Monteagle when the Post-Office Savings'-Bank Bill was before the Lords. In a Hertfordshire Savings' Bank, a deficiency of 10,000l. was discovered, and the entire amount was subscribed by nine of the trustees, who were noblemen and gentlemen in the neighbourhood.