Before 1861 there were in the United Kingdom 638 Savings Banks; of which 498 were in England, 33 in Wales, 51 in Scotland, 54 in Ireland, and 2 in the Channel Islands. Computing from the census of that year, there was one Savings Bank to every 43,000 inhabitants. In England, though the 498 banks were distributed through every county except one, there were many populous districts and numbers of large towns not supplied with them. Rutlandshire with its 22,983 inhabitants was the exceptional county in England: but in Scotland there were nine, and in Ireland four counties, entirelywithout Savings Bank accommodation. The following is a list of those thirteen counties:—
One of the Channel Islands, Alderney, and the Isle of Man with its three or four market towns, had likewise no Savings Bank. Thus fourteen counties and the above islands, containing an aggregate population of at least a million persons, could not count upon a single Savings Bank to assist those of that great number who were inclined to provident habits, or those who might have become so had these facilities been within reach.
So much for the counties in the length and breadth of which no bank for savings could be found. Applying the same test to towns and villages already applied to counties, we find that of places above the position of hamlets there were, in 1861, no less than 3,500 without banks; and not only so, but 150 of this number were towns of more than 10,000 inhabitants, and 500 of the places which had no Savings Bank accommodation had each one or more private or joint-stock banks.
But we have another consideration to urge here; and thatis, the insufficiency in the number of Savings Banks in many counties where their extent and population required them. No one will say that Berkshire, Dorsetshire, and Cheshire required as many banks as did Middlesex, Lancashire, and Yorkshire—the vast centres of population and the busy hives of industry—and yet the facilities of which we are speaking happened to a great extent to be so arranged. In 1861 we find the relative number of the population and the depositors in Savings Banks in our English counties to vary very considerably—a difference ranging from one in eight to one in thirty-six. In the county of Berks, there was one Savings Bank for every 17,000 persons; in Dorsetshire one for 18,500 of the population. On the other hand, to take the rich and thriving county of Lancashire, which had the lowest relative number of banks, we find there was only one to every 68,000 persons, and in the West Riding of Yorkshire only one to every 66,000 persons. From a careful calculation which we have made from these and similar facts, it would appear that of the two and a half millions of persons for whom Savings Banks were specially designed, and who in 1861 were not depositors, at least half of them were the breadth of an English county distant from any place where they could place their money had they been desirous to save it, and the rest were distant from six to twenty miles from any such repository.
Nor were those who were much nearer these banks,i.e.the denizens of our large towns, much better circumstanced. Of the existing establishments in 1861 there was a large proportion of them open for so short a time, and at such inconvenient hours, as practically to make them closed banks to our working population. That they did little business isnot to be wondered at; though we think our readers must be astonished to know that of the entire number of Savings Banks much more than half of them only received, on the average, a dozen deposits a week! Astonishing as this is, all wonder may well cease when it is found that of the whole 638 Savings Banks of the United Kingdom only twenty were open daily, while 355 were open once a week, and fifty-four butonce a fortnight, and ten butonce a month! Of the remainder a considerable number were open two and three times a week, and the rest did business at various periods. Investigating the matter a little more closely still, we find that, in 1861, fifty Savings Banks were open butfour hours monthly; 124 were open onlyone hour each week; and 150 openbut two hours per week. In England the 498 banks were open in the aggregate 1,988 hours a week, giving an average of about four hours per week for each bank, or, if we leave the metropolitan banks out of the consideration, an average of about two hours and a half per week. Further, taking three English counties, solely chosen on account of their alphabetical order, Bedfordshire, with five Savings Banks, had seventeen and a half hours per week of Saving Bank accommodation; Berkshire, withten banks, had only twenty-one hours; and Buckinghamshire, with six banks, but an aggregate of eight hours each week, during which its population could resort to the banks with their savings. After these facts, let no one wonder that the odd savings of the poor burnt holes in their pockets, and led them to resort to the“house of call”open within a stone's-throw almost at all hours.
A statement was made before the Committee of 1858, that twenty-five out of every hundred persons properly designated as of the industrial classes were debarred from saving theirmoney, even if inclined to do so, from the want of convenient places of deposit; and the reader may, we think, with the help of the above statistics, judge whether that statement was at all an exaggerated one.“Is nothing to be said of the inherent disposition of so many of the poorer classes to spend their money, and the utter repugnance they feel to habits of frugality?”says a doubting reader. Certainly. But how do the facts bear on this matter? Let us take the returns of the four different counties already alluded to as containing relatively the largest and the smallest number of Savings Banks. In Berkshire, for every thousand persons an amount equal to 2,479l.was accumulated in 1856; in Dorsetshire the amount was 2,550l.: on the other hand, in Lancashire, which we described as most insufficiently served with banks, the amount per thousand persons was only 1,562l., and in the West Riding of Yorkshire but 1,266l.But we will take the case of a single bank to show that the want of facilities was a most important element in the want of progress; and to make the fact still plainer, we will go to Lancashire itself. The Manchester Savings Bank has for long been one of the best managed institutions in the kingdom, whilst elsewhere there had been, as we have seen, the slowest growth, if not complete stagnation in Savings Banks generally. The depositors in the Manchester bank were nearly quadrupled in the twenty years now under consideration, and no better test is required that these depositors were of the right sort than the fact that, in 1860, 200,000l.lodged at Manchester belonged to persons who could not even sign their names.[140]Thesefacts did not fail to strike the members of the Committee of 1858, and Mr. J. Hope Nield, the eminent actuary of the Manchester Savings Bank, was asked how he accounted for the fact of this bank advancing so much more rapidly than any other. Mr. Nield succinctly replied,“Only from the constantly increasing facilities which it has been our constant endeavour to give.”Mr. Nield afterwards explained the facilities to which he referred. In many banks, depositors had only a very short time for business, and then perhaps they were restricted to one kind of business for one day, another kind of business for another day. In the Manchester bank depositors could go and do any kind of business whenever it was open. There lay the distinction between“free”banks, and what were known as banks on the“restrictive principle.”In a restrictive principle bank, of which there were an enormous number, withdrawals were made on one day, deposits on another; new accounts could only be opened on a certain day, additions could only be made to accounts on another certain day. Then there was the notice to be given for withdrawing money. The more“free”the bank, the less notice: generally a week was required; more often a fortnight was wanted; in many cases a month's notice had to be given.“Whenever,”said Mr. Nield,“a free bank could be pitted against one on the restrictive principle, the increase in the number of depositors in the former case would be found to be four or five times as much as in the latter.”This was shown in a clear light by a striking illustration—also a somewhat amusing one:“Up to 1847,”said Mr. Nield,“the late Venerable Archdeacon Brooks, of Liverpool, would insist to the day of his death upon paying everything himself in the Liverpool Savings Bank, and, as aconsequence, the bank was only open two days a month for the repayment of money. Deposits were completely stationary there for many years, and cases were known where persons went to the Manchester bank to open an account there, and remitted money by post.”
Whilst speaking of the Committee of 1858, we may here give the opinion on this point of another gentleman, of whose career as an ardent and laborious Savings Bank reformer we shall presently speak. Referring to the absence of what he considered reasonable facilities in Savings Banks, Mr. Charles William Sikes, of Huddersfield, expressed his decided conviction that the present system“was inadequate to meet the wants and wishes of the working classes of this country.”When asked (2,715) if he had made any calculation as to the extent to which the savings of the working classes might reasonably be expected to amount if the Savings Banks were thoroughly popular with them and were felt to be perfectly safe, Mr. Sikes answered:“I think that if a knowledge of Savings Banks becomes widely diffused (and the process is going on), and if the reorganization of them receives the confidence of the country, the average annual deposit, which now amounts to seven millions, is so small a proportion of the aggregate income of the working classes of this country, that instead of being, as it had been, stationary,with scarcely a fluctuation of two per cent. for twenty years, there will be a probable increase in the course of three or four years, or perhaps a longer time than that, of two, three, or five millions of money;—in other words, that the annual deposit, instead of being seven millions, will get to eight, nine, or eleven millions, in ten years. The income of the working classes is fully 200 millions a year, and, with anything likeprovident and sensible habits, thirty millions a year might be deposited in Savings Banks.”
* * * * *
And now that we have at considerable length described the defects and inequalities of the Savings Bank system, we cannot perhaps do better than offer some account, first, of different banks of a supplemental character which have been started within recent years, and afterwards speak of some of the various proposals made, out of Parliament, to render the general system more efficient.
For many years prior to their actual establishment it was felt by those best conversant with the habits and feelings of our British soldiers, that the Savings Bank institution did not meet their wants and requirements, and that supplementary banks were needed. This project was frequently urged,[141]and in 1842 Lord Hill gave his consent to the plan of Military Savings Banks proposed by Sir James McGregor and approved by Lord Howick, the then Secretary-at-War.An Act of Parliament was obtained (5 and 6 Vict. c. 71), and immediately afterwards the authorities at the different barracks commenced operations, under regulations made by the Secretary for War. In 1847 this Act was amended. In 1849 the Regimental Benefit Societies were dissolved, and incorporated with the Military Savings Banks by a new Act; and in 1859 the whole of the Acts relating to the Savings Banks of the soldiers were consolidated into one (22 and 23 Vict. c. 20). The amount which any one in the service can deposit is unlimited, though interest is not allowed on any excess over 30l.in one year, except in the case of gratuities given for good conduct. When the sum of 200l.is reached, no further interest is paid. The interest allowed must not exceed 3l.15s.per cent. The whole of the money raised in Regimental Savings Banks is remitted to the War Secretary, who holds an account with the National Debt Commissioners, which is kept separately from other Savings Bank accounts, being entitled“The Fund for the Military Savings Banks.”Returns of all transactions made in these banks are laid annually before Parliament. The Returns almost from their commencement have been most satisfactory, and produce sufficient evidence that these supplementary banks were required. The total amount up to this time (1865), standing to the credit of our soldiers in Military Banks alone, exceeds the sum of a quarter of a million sterling, and amounts on the average to nearly 20l.for each depositor. This sum, however, though large and eminently satisfactory, as indicative of providence and forethought among a class which cannot be called highly paid, does not represent the whole of their savings. It is well known that many go beyond their barracks to deposit such sums as they can spare,acting on the feeling, which may be well understood, that it is not always advisable that the authoritiesshould know the extentof their savings.
* * * * *
What was done for soldiers in 1842 was accomplished for seamen, another class whose interests everybody cares for, in 1854. The Act 19 and 20 Vict. c. 41, regulates Seamen's Savings Banks, established at all our principal seaports under the direction of the Board of Trade. According to this Act the Board of Trade has power to constitute any shipping office established under the Merchants' Shipping Act (1854) a branch bank under its control, and to require any shipping master belonging to that office to act as agent. The money invested in these banks is paid through the Board of Trade to the National Debt Office; and interest similar to that given by the ordinary Savings Banks is paid to those who so invest their money. As in ordinary Savings Bank management, the expenses incurred in carrying on the business through the Board of Trade (a department of which is constituted as a sort of central bank) and the shipping offices are paid by the surplus interest obtained from Government, with whom the funds are invested. As in the case of Military Banks, an annual account must be rendered to both Houses of Parliament of all transactions; but we are sorry to say that these transactions have never been large. Some forty thousand pounds represent the entire capital of the Supplementary Seamen's Banks.[142]All who know what Jack is ashore—and who does not?—will wonder little atthis result; he is universally pointed to as an embodiment of Improvidence itself: but when it is known that the machinery in question is applicable to married sailors, their wives and families, the picture of want of thrift and inclination to save presents several deplorable aspects.
* * * * *
Still more useful and interesting has been the Penny Bank movement, and some account, which must necessarily be brief, will not be out of place here. Before the year 1850, there seem to have been at least four Penny Banks established with a view to attract a poorer class of depositors, or it might be ayoungerclass, than the existing Savings Banks had reached; and, as“stepping-stones to greater things,”Penny Banks succeeded admirably from the very first. The first bank was started, with this very laudable object, in Greenock, in 1857, by a Mr. Scott of that town. The Greenock Savings Bank having, like all the other Savings Banks, restricted the amount which could be received to a shilling, and very few of them receiving that amount pleasantly, Mr. Scott thought that the very poor had no safe place in which to deposit their little surplus earnings. Poor people were often enough urged to“take care of the pence, and the pounds would take care of themselves;”but little had been done to help them to care for their pennies, which proverbially and very quickly burnt holes in their pockets when they were compelled to keep them in their own possession. A bank for such sums was started in this town; and to show how much it was needed, and how ready the poor were to avail themselves of advantages when they were placed within their reach, we have only to state that 5,000 depositors in the first year of the existence of the Greenock Penny Bank, placed the sum of 1,580l.in it.
The success of this bank soon began to tell all around; many private establishments and charitable institutions were not long in following the example that had here been set. In the following year Mr. Queckett, a benevolent and painstaking clergyman, in the east of London, established a Penny Bank in connexion with Christ's Church, St. George's in the East, and the success attending the venture was still more encouraging and remarkable; nearly 15,000 deposits were made in this parish Penny Bank in the first year of its existence. It seems that the number of depositors, for some reason or other—probably because that number was enough for one person to control; the whole of the repayments, at any rate, passed through Mr. Queckett's own hands—was limited to 2,000; and so great was the demand, that there were always several applicants for any vacancy that might occur among the favoured two thousand. Two“Penny Banks”were next established about the same period—one at Hull, in August, 1849, and the other at Selby, in the East Riding of Yorkshire, in July of the same year. The clergymen and gentry of both towns joined together to form an institution,“which should create and foster habits of regularity and frugal economy among the poorest people, and which should afford an opportunity for the deposit and safe keeping of the smallest sums of money, repayable with interest when required.”The Birmingham Penny Bank was established in 1851, and in six years from its commencement had received the enormous sum of 52,354l.in amounts from one penny to one pound. Many of our readers will be aware of the unfortunate end of this bank, under circumstances which, deeply to be regretted, have had a prejudicial effect on the usefulness of other banks of the same description. Were it not that a new class ofbanks, since established, offers considerable inducements to the poorest classes, and thus supersedes, though only to a limited extent, the necessity even for Penny Banks, such an effect could not but have been considered irremediable, as well as most deplorable. Of the remaining Penny Banks, the principal ones in England are those of York,[143]established in 1854, and excellently managed throughout, and very successful in attracting depositors; the Halifax bank, commenced in 1856, and equally successful; the Derby bank, established in 1857, under the auspices of the Rev. J. E. Clarke, one of the most earnest of the promoters of the principles of Penny Banks; and the Southampton and Plymouth banks, established in 1858. There are no means of obtaining statistics as to the number of Penny Banks in existence, but there cannot be less than eighty or ninety in English towns alone. Over and above the regular public Penny Banks, however, there are an enormous number connected with and doing an incalculable amount of good in private establishments, ragged and other schools, and different religious bodies.
In Scotland the movement has progressed even more rapidly than in England. Dr. Chalmers always held, and often urged during his lifetime, that far too little was done to tempt the poor, and especially the families of working people, to save their little surplus cash: in commencing his“Territorial Savings Banks,”as he called them, in Edinburgh, he was actuated by exactly the same view and the same spirit which afterwards influenced the promoters of Penny Banks. The Penny Bank system flourishes in Glasgow to an extentunknown in any other neighbourhood. In and around that city there were, at the close of 1864, no fewer than sixty-eight Penny Banks in active operation, all of which deposited with the Savings Bank of that place. The total amount of deposits in these sixty-eight banks during the year 1864 was 9,386l., and withdrawals to about half that amount. The number of depositors exceeds, at the present time, 24,000.
That these auxiliary banks are effecting a great amount of good can well be believed.“The saving of pence,”says the report from which these extremely interesting facts are taken,“proves a training to habits whereby ultimately larger sums are saved, and the virtues of industry and providence are cultivated and confirmed,”and there cannot exist a doubt on the matter. The principles upon which they and all other banks of the kind were started, and have been throughout conducted, make them peculiarly institutions of a preliminary character for the poorer class of workmen; emphatically they are, as they have been called,“the poor man's purse.”In their operations they are so simple, that few could possibly get perplexed in dealing with them; and they are best adapted to working populations, because they are open at such hours, generally on Saturday nights, as are known to suit these classes. As the most salutary change is made in a man's habit, perhaps in his character, when hebeginsto save, the Penny Bank deserves every countenance and encouragement.[144]
It only remains to add, that the Legislature took the matter up in August, 1859, when it passed the Act 22 and 23 Vict. c. 53, legalizing, as it were, these institutions, by enabling them to invest the whole of their proceeds in Savings Banks.
* * * * *
Much that remains to be told of Savings Bank reforms, and of other proposals to supplement the system by fresh provisions, may be told in connexion with the life of a gentleman to whom reference has already been made. Amongst those who have devoted much time and immense labour to bring about a better state of things in Savings Banks, the foremost place is undoubtedly due to Mr. Charles William Sikes, of Huddersfield. Mr. Sikes, the son of a private banker of that town, was born in 1818. We will pass over his early years, only remarking that he received a commercial education, and, in 1833, entered the employ of the Huddersfield Banking Company, the third or fourth joint stock bank established in this country. Subsequently cashier, Mr. Sikes now holds the position of deputy manager of the bank in question. We mention this, because it has an immediate bearing on the subject: it was while Mr. Sikes was cashier of this bank,—which, like other private banks, received deposits above 10l., and allowed interest at the current rate,—that his attention was arrested to the question of banks for the people. He witnessed a considerable number of instances of workmen, who, beginning with a few pounds, had silently amassed what was to them a little fortune, of one, two, and even three hundred pounds; and he became deeply impressed, as he himself informs us, not only with the idea that the number of these provident working people was far less than it ought to be, or might be, but that the social and domestic results forgood that would ensue would be absolutely incalculable, if bank depositors among the working classes became the rule, instead of the rare exception. About this time—the era of the Free Trade agitation—there was great distress in the manufacturing districts, and Huddersfield, like the rest of the West Riding towns, was heavily visited. In the neighbourhood where Mr. Sikes resided, the population was chiefly engaged in the weaving of fancy waistcoatings, and that trade was almost suspended.“Privation and suffering,”says Mr. Sikes,“prevailed on every hand, and was frequently borne with silent and noble heroism.”He seems to have entered freely into discussion with working men as to the various remedies for such a state of things, and in this practical way to have penetrated into their thoughts, and to have got at their wants, wishes, and feelings. And for such objects as Mr. Sikes had in view, the end amply justified the means. There seemed to him only one remedy, to which they might possibly be assisted, but which they themselves must adopt; whatever was suggested, Mr. Sikes's thoughts would always recur to the comparative comfort of those who had to some extent lived for the future—who had had the wisdom in their better times to remember that rainy days must come at some time or other; that
"Into each life some rain must fall,Some days must be dark and dreary;"
and that the difference between those who had a little store laid by and those who had none, was the difference between hopeful expectancy and comfort, and helpless misery and want.
Mr. Sikes tells us that he had already begun to feel, that though much might be done for the working classes by kindly and temperate advice, the greatest share of the workof their social elevation would have to be achieved by their own individual efforts; this feeling, moreover, was strongly confirmed by reading a passage in the late Bishop of Chester's (Archbishop Sumner's)Records of Creation:“The only true secret of assisting the poor is to make them agents in bettering their own condition;”and on this maxim, as a principle, he resolved solely to act. Mr. Sikes came to the conclusion that his work might well lay in endeavouring to stimulate the poor to more provident habits; and that, if there was anything in the constitution of such societies as were formed expressly to foster these habits which stood in the way of the poor man, the obstacles ought either to be quickly removed, or some new organization must be planned to effect this purpose. Though Mr. Sikes never seems to have had anything to do with the Huddersfield Savings Bank—having abstained, through motives of delicacy, owing to his connexion with an ordinary bank in the same town—he was thoroughly conversant with the system, and therefore fully appreciated the difficulties in the way. He was not long in finding out how utterly impossible it was to adapt the system, as it then stood, to the well-known wants and requirements of the workman; and he early turned his attention to some auxiliary machinery which he thought would meet the case of the younger people, if of no other. He truly held, that if he could do anything to inculcate the growth of frugality in young people, their habits would increase with their years and grow, in spite of the many inconveniences, amounting as they did to absolute discouragements, which they might meet with afterwards in their connexion with the majority of the old class of Savings Banks.
With this end in view, Mr. Sikes addressed a long letterto the editor of theLeeds Mercury, in 1850, which was subsequently republished in the form of a pamphlet, and widely circulated, recommending the formation of what he called“Preliminary Savings Banks.”There was nothing particularly new in the character of the banks proposed; the novelty was in their adaptation to the machinery of Mechanics' Institutions. Mr. Sikes took up the Penny Bank movement, and showed, with an energy and devotion to the subject which made his exertions quite impressive, how, by the already existing institute, that useful scheme for saving small sums might be propagated far and wide. His proposal, to give it in brief, was, that a few leading members of each Mechanics' Institute should form themselves into a“Savings Bank Committee,”attending, say, an evening weekly, in one of the class-rooms, to receive the trifling deposits of any member who should choose to“transact a little business”with them. They would only have to appoint a treasurer, provide a few inexpensive books, and with the exercise of just a little patience and self-denial they might succeed in bringing many round to saving habits. The excellent organisation, especially in Lancashire and Yorkshire, of Mechanics' Institutes, would thus wonderfully augment the number of agencies for receiving the savings of the people, and they would thus augment the number most where more facilities were most needed. The“Preliminary”banks were meant to be merely feeders to the larger banks: so soon as the money of any one depositor reached a guinea, or two guineas, the sum was to be paid into the nearest Government bank, as often as necessary.“If the committee of each institution,”concluded Mr. Sikes, in his very interesting letter,“were to adopt this course, taking an interest intheir humble circumstances, and in a sympathising and friendly spirit, suggest, invite, nay win them over, not only to reading the lesson, but forming the habit of true economy and self-reliance, how cheering would be the result! Once established in better habits, their feet firmly set in the path of self-reliance, how generally would young men grow up with the practical conviction that to their own advancing intelligence and virtues must they mainly look to work out their own social welfare!”It is very satisfactory to find that this advice and such considerations had their proper weight with the committees of many of these institutions: Penny Banks were added to their other educational and social schemes; and Mr. Sikes was further encouraged by the Committee of the Yorkshire Union of Mechanics' Institutes, who more than once alluded to his proposals, and expressed their cordial approval of his plan, and their pleasure that it had been adopted in several places included in their sphere of operations. In the country generally the proposals attracted for some time considerable attention, and led to Mr. Sikes being largely consulted by gentlemen who were desirous of establishing“feeders”to the existing Savings Banks, either in the form of the Penny Bank, or the Mechanics' Institute“Preliminary”bank. He soon came to be regarded as an authority on the subject, and justly so; many different banks were at this early stage formed as the results of his advice and assistance, and Mr. Sikes seems to have had many gratifying assurances that his labours have been far from fruitless, a result in which the philanthropist finds his best reward.[145]
Mr. Sikes's next exertion on behalf of the working population around him was to help them to a proper estimate of the value of provident habits, by the publication, in 1854, of apamphlet entitledGood Times; or, the Savings Bank and the Fireside;[146]an admirable little manual for the class for which it was written, and which deservedly obtained a large sale. Mr. Sikes himself described how he was led to write his pamphlet by hearing, in an extensive intercourse with working men, the most crude ideas as to the utility and virtue of habits of economy and frugality; and we know no better corrective than a perusal of this little“compendium of practical wisdom”now before us.
Up to this time we find that Mr. Sikes laboured very earnestly to spread the knowledge of Savings Banks among the people, and to obtain more appreciation for these institutions. He also, as we have seen, proposed his“Preliminary Banks”on the principle that, as the existing institution did not sufficiently recognise the small attempts at saving habits, this supplementary class of banks would supply the deficiency. He seems, however, to have carefully abstained from saying anything that would tend to lessen the influence or usefulness of the existing Savings Banks; but in 1855, the time would appear to have arrived when it became necessary to attempt some reforms in their constitution and management. It is not at all difficult to comprehend the steps by which Mr. Sikes, with his practical knowledge of SavingsBank business, would arrive at the conclusion that if these banks were to continue to be in any sense the depositories of the money of the poor, they must undergo almost a transformation, and further, that reform must come from within. That this was the conclusion to which he came is evident from the able and exhaustive letter which Mr. Sikes addressed, in 1856, to the Chancellor of the Exchequer, the late Sir G. Cornewall Lewis, on“Savings Bank Reforms.”
Mr. Sikes first sought an interview with Sir George C. Lewis, and obtained one, in company with Mr. Wickham, M.P.; and the letter which followed was the result of a request on the part of the Chancellor of the Exchequer, that the different points should be fully and clearly set before him. So far as we have been able to find, Mr. Sikes deserves the credit of having been the first to point out the inherent defects in all parts of the Savings Bank system, and the first to suggest an entirely fresh form of management.[147]Almost all the previousbrochuresrelating to Savings Banks had exclusive reference to the matter of the frauds which had occurred, and the security which depositors possessed in such cases. On this subject, Dr. Hancock, of Dublin, had published two very able pamphlets, which had originally been read as papers before the Dublin Statistical Society, ofwhich Dr. Hancock was secretary. Mr. Edward Taylor of Rochdale had, at a still prior period, written a pamphlet on the same subject. Mr. Sikes, in theLetterwe are now considering, adverted at length to the same point, but by no means confined his attention to it. He, on the contrary, dwelt on the dormant state into which many of the banks had sunk; the extremely unequal way in which they were furnished to the people; the limited time for which the majority of banks were open; the various rates of interest allowed; the inequalities in the contributions to the“separate surplus fund;”the non-establishment, for many years, of new Savings Banks; and generally, the unsatisfactory state of the law with regard to them.
Mr. Sikes, after thus recapitulating in his able pamphlet the imperfections in the organization and management of Savings Banks, advocated the following improvements,viz.:—That the State should give a perfect guarantee; that there should be a central bank in London to control the whole system, in the same way that the central Money Order Office controlled all money-order operations at the Post Office; that there should be a vigilant and general audit of all accounts; that there should be a great extension of the hours during which Savings Banks were open; a great increase in the number of such banks—the services of private and joint-stock banks to be called into requisition in cases where such arrangement was likely to prove economical and advantageous; that there should be an increase in the facilities for the deposit and withdrawal of money; that one-fourth of the capital of Savings Banks should be employed in first-class landed securities and railway mortgage bonds, yielding four per cent. Mr. Sikesfurther proposed that the rate of interest on sums up to 100l.should be three per cent., and two and a half per cent. on all sums beyond. Mr. Sikes felt the difficulty of providing that essential Government guarantee for every deposit, without which any reform in Savings Banks was scarcely worth the name; but he strongly insisted on the point that if a Savings Bank department was established in London, which should, on its part, insist upon weekly returns, a good and uniform system of book-keeping, and a liability to unapprised visits by inspectors from the London office, the entire staff of Savings Bank officials in the country might, to a great extent, be kept honest. Bearing in mind, however, that errors and losses would occur to the best regulated department, he further proposed that the treasury might be made safe by the establishment of a“General Guarantee Fund,”[148]to which contributions should be made from the“Separate Surplus Fund.”These suggestions, if carried out, Mr. Sikes believed would help to form the basis of a system that would restore Savings Banks to the estimation in which they were held during the first twenty years of their existence; and there can be no doubt of it. The difficulty was, however, in getting such recommendations adopted—either because the then Chancellor of the Exchequer (Sir G. C. Lewis) did not bring his extraordinary powers to bear upon the subject, or else there was still something lacking to give a more practical turn to the questions at issue. As subsequent events have proved, it is more likely to have been for the latter reason that the matter was not persevered in.
Everything that an ingenious marshalling of figures, an array of argument, and even eloquence could do, Mr. Sikes did; but all appears to have been equally unavailing. The Chancellor of the Exchequer made attempts, as we have before seen, in the House of Commons, to improve the organization of Savings Banks, but without success.
When the Committee on Savings Banks was appointed, in 1858, Mr. Sikes was called as a witness. He again described the plans which he had suggested in 1856, and which had undergone little or no modification since that time, and urged the adoption of some of them,—with what success is already known. And here it will be best to dispose of the Committee of 1858, and to show how little it effected, and how little it was calculated to effect. So far as the providing of additional and much required facilities was concerned, it is necessary to describe with minuteness the Committee's deliberations. The Report itself, to which the Committee put their names, has been given. It provided, as our readers will remember, for a new Government management of Savings Banks, advised that increased power should be given to the Commission, and provided actual security for the deposits. This Report was not acted upon; but even had it been, the reform would only have been partial. So far as relates to the increase of facilities, it left the question almost untouched. Indeed, with the conflicting evidence given, the Committee acted wisely in confining their labours to the rectification of existing abuses, and in making as perfect as possible, without increasing, the existing accommodation. The witnesses examined before the Committee were by far the most prominent authorities on Savings Bank management in the kingdom,and yet on no single point could they all agree. This is, we think, no unimportant phase of the subject; on the contrary, it is highly important, as showing how very little could be effected for the body of Savings Banks in the absence of any thing like unanimity amongst those who best understood the subject. On the question of Government security and Government supervision, we have already spoken. With regard to the necessity for a uniform system of management, and of course a uniform system of accounts, there was certainly an appearance of general agreement; but little attempt to bring it about.Mr. Hope Nield“thought it would be very advisable to assimilate the practice of the different banks more than at present exists (1,895).”Mr. MaitlandandMr. Wortleywould like uniformity, and would give the Commissioners power to enforce it;“nothing less would remedy the loose system of so many of the banks.”“The system of keeping the books,”saidMr. Craig, of Cork,“in some of the country banks, is most abominable. I speak of the vast majority of banks; some are exceedingly well managed; but I say, that from the way they make out their accounts for the National Debt Office, not one in ten is honestly or fairly made out (3,759).”Had the Committee deliberated upon a uniform system, which they did not, for all the banks, and had they decided—(a very difficult matter, seeing that each of the seven largest banks in the kingdom had different systems of book-keeping)—to recommend some one system, the difficulty would only be half over. Each Savings Bank was independent, and completely irresponsible to any one in such matters as these; but supposing, which was very unlikely, that the trustees could be got to look upon thematter with favour, all would not yet be smooth sailing. The difficulty of introducing real improvements into Saving Bank management was more than once spoken of and illustrated. Thus,Mr. Boodletold how he encountered great opposition from his own subordinates, in introducing something new into the excellent establishment at St. Martin's Lane. For six months after he started a new system of book-keeping, a conspiracy lasted among the clerks to prevent any change; wilful mistakes were constantly made, to show that the work under any new system could not be done; and this continued till a great number of clerks were dismissed, and new officials appointed in their place. Much to the same point was the evidence ofMr. Craig, who described in a vigorous and amusing way, which must have done much to relieve the tedium and heaviness of the investigation, the introduction of his system into the Cork bank, and the necessity for it:—
“I saw at once,”said he,“that there was nothing for it but sweeping every book out of the bank, and I did so. They (the trustees) gave me authority to do what I liked, and I did. It was all done by me without any interference; and I managed it in such a way that if the clerks stuck in the middle of it they would have lost their salaries; they had either to go on with it, or stick fast. I went there myself, with a Mr. Ballard on the opposite side of me, and a manager with each, determined to start them fairly. I remained there for a month. I saw that the clerks were very anxious that it should miscarry. I immediately saw what they were about; I observed that all the books were coming to my side, and few to the other; they thought to smother me with books. The moment I saw this, I said to little Mr. Abel (who is now dead), 'Do not chatter; work away; they are playing a trick upon us.' We dashed through the work; and, one of the book-keepers coming down after he thought he had well supplied us with a wheelbarrowful of books, expecting to find them all in arrear, I said to him: 'Why the deuce don't you send us books!' When they found they were all done, that stopped all further opposition; and thus I taught them to do it, just as you would teach a puppy to swim—if you tumble him into the water, never fear that he will get out.”
Granting that Savings Bank clerks may be subdued after Mr. Craig's or some other fashion, it would still appear that the indispensable requisites to a complete uniformity of accounts must be something like uniformity in the distinctive principles and practices of Savings Banks. We refer to such matters as the limitation in the amount of deposits, the rate of interest, notices of withdrawal,&c.The question of the limit of deposits was discussed before the Committee.Mr. MeikleandMr. Sturrockobjected to any alteration in the limit of deposits which for many years had stood at 30l.for any one year, and 150l.in all.Mr. Boodlethought the annual limit should be increased to 50l., and the total deposits to 250l.Mr. Finneywished it to be at 50l.and 200l.respectively.Mr. SaintsburyandMr. Maitlandagreed with Mr. Boodle, provided the rate of interest were reduced, and there were ready access to the public funds. Then as to the rate of interest itself,Mr. Maitlandsaid that the highest rate of interest that can safely be offered should be given for small savings,“though,”he said,“loweringthe rate would bring Savings Banks back more to what they were intended to be.”He also thought the rate should vary according to the market rate of interest.Mr. Boodleobjected to a fluctuating rate.Mr. Meiklewas of opinion that a fixed rate of three per cent. should be given.Mr. Craigsaid a rate of 2l.17s.or 2l.18s.was satisfactory to depositors.Mr. Wortleythought three per cent. a fair rate of interest.Mr. C. W. Sikessuggested that the interest to depositors should be three per cent. on sums up to 100l., and two per cent. over that sum. He thought a low rate of interest would not deter the working man from Savings Banks. If we turn from this theorizing to what was the practice of different Savings Banks in this and other particulars, we shall finddiversities of operation which not only account for so much difference of opinion, but which rendered unanimity of action almost impossible. It was then, and is still, a very popular notion, that the Savings Banks proper pay a uniform rate of interest of three per cent. per annum; nothing can be more mistaken. When the enactment was passed establishing the still existing rate, it was generally considered in Parliament that five shillings per cent. was ample enough to pay all expenses of management; but the fact is, double that amount has not sufficed in some cases. In 1857 there were, according to a Parliamentary Return, no less than thirty-two different rates of interest paid by Savings Banks managers, and had the Return embraced a much more recent period the same diversity would have been shown. Thus, in that year—
added to which smaller numbers paid other rates, making thirty-two separate rates.[149]In accordance with the above table the average cost of management per cent. was, in 1857,—in Scotland 7s.8d., in Ireland 9s., and in England 6s.7d.; in Middlesex, however, it was as much as 9s.2d.Confining ourselves to individual banks, we find that the Manchester Savings Bank cost at the same period, in expenses, an averagesum of 1s.3¾d.per account, the Bloomfield bank 1s.9d., the St. Martin's Place 2s.0-½d., the Liverpool bank 2s.5¼d., and the Cork bank 3s.2d.per account.
The greatest expense was shown to be incurred in those banks which dealt largely in small accounts; hence some of the actuaries openly sought to discourage the taking of small sums.Mr. Meiklethought it was the interest of the banks rather to discourage small depositors and encourage large ones.Mr. Finneyshowed that theywerediscouraged at the Marylebone bank, where a less interest was given to small amounts.Mr. Craig, however, went to great lengths on this point, and grounded his opinions on such facts as the following (3,752):—“The average cost of a transaction that enters a bank is more than a shilling; there is not a transaction entered in any Savings Bank that does not cost a shilling and a fraction. Now, if you allow a man to deposit a shilling, which costs the bank a shilling, it comes to this, that the manager might as well say to him, 'There is a shilling for you; pray do not come here again.' The Committee are about seeing whether Government can or not safely undertake to make itself responsible for the transactions of 600 Savings Banks scattered all over the country. If so, they must only take such sums and in such ways as will be safe for the public. It will not do to allow people's sympathies to run away with them by the mere clap-trap of saying, 'We will take a shilling.' I say that to take these small sums, instead of being a benefit to the people, is merely encouraging them to waste their time.”We need not here go out of our way to expose the fallacy of such an argument, further than to point out how entirely Mr. Craig overlooked the fact that he had previously advocated a system of uniformity of accounts, which would have made this andother reforms practicable. What was required of the Committee before which he gave evidence, was, the suggestion of such a change in the nature of the institution as that this shilling's worth of thrift should not be sent about its business in the very summary manner so graphically described by this gentleman. That the Savings Banks should give such rude discouragements to the budding of provident habits was nothing short of a defect; that it was perfectly possible as well as expedient to offer encouragements to the poorest classes has since been abundantly proved, as we shall soon have to show.
We have referred to the varying notices for the withdrawal of money required by different banks; some required a week, some a month, while in the great majority of banks a fortnight was required.Mr. Meikleexpressed himself strongly opposed to the English system of giving notice: he said, the Scotch banks required no notice at all, though they held a discretionary power in certain instances.Mr. Saintsburyurged“a reasonable period.”Mr. Wortleythought the notice was a protection against Savings Banks being used for other purposes than for accumulating savings.Mr. Sikesstrongly recommended that deposits should not be repayable“except after sufficient notice,”the extent of which neither he nor Mr. Saintsbury ventured to state.
Once more the attention of the Committee was called to the necessity of opening out new banks in localities not well supplied with them. No one, however, was prepared with any scheme for giving extra facilities of this kind, and those hints which were thrown out by members of the Committee themselves were either not taken up, or if noticed, only in such a way as to attest the difficulty, rather than the ease orexpediency with which any movement towards this end would be attended.Mr. Wortleysaid small banks were exceedingly unsafe; branch banks under the cognizance of a head officemightanswer.Mr. Meikleagreed, and said that at first new banks were seldom self-supporting.Mr. Nieldsaid it would be impossible that the agency system of Exeter (the only scheme recommended) could be introduced into Lancashire; the branch banks under the Manchester Savings Bank could not support themselves except they had gratuitous service.
Finally, we think the difference of opinion and the diversities of operation in the larger and best managed banks[150]of the kingdom could not be better shown than by the following Return.[151]If anything could demonstrate the want of some uniform and inexpensive system of Savings Banks, we think a careful examination of the inequalities of every sort shown there might have that effect.
Thus we have, we hope, succeeded in showing that at the stage to which we have arrived (and, indeed, much later,) the existing Savings Bank system, as a system, laboured under three or four essential and almost incurable and irremoveable defects: 1, They professed and were expected to give a Government guarantee for all the money deposited with them, and yet they did not. The real distinction in the matter, to which we need only allude, was and is well enough understood by educated people; but it was not, we may almost say cannot, be mastered by the poor who were depositors. A depositor paying in his money to the Savings Bank had no means ofknowing what was done with it. 2, The country was most inadequately and most disproportionately supplied with banks, and the facilities given by existing banks were also most inadequate and disproportionate. Farther, and most important,the number could not be increased on the same footing, and no attempt was made to increase the number. Such increase presupposed a certain amount of local philanthropy and even assuming that this sort of philanthropy is an unmixed good, an adequate provision of Savings Banks presupposes an equal amount of philanthropic zeal in every quarter of the country. And 3, Savings Banks were a serious loss to the country.“Taking the average price,”said Sir A. Spearman,“of Government Securities for each year since 1817, the only years in which prices appear to have been such as to produce a rate of interest equal to that paid were 1847 and 1848.”Government, in relation to Savings Bank money, had necessarily to invest when money was most plentiful, and therefore when securities were dear, and to sell out when they were cheap. To make up for such loss, it is true, Government took to using Savings Bank money to aid it in its own financial operations, to save borrowing or to postpone borrowing; but though care was always had to keep a sufficient banking reserve in an available shape, this set-off was not allowed, as we have already seen, without many complaints on the part of the managers of Savings Banks.
Returnrelating to the Ten principal Savings Banks of the Country. (1861.)
[134]Compiled from Returns presented by the Statistical Department of the Board of Trade.
[135]It is very difficult to obtain correct and complete statistics on this subject. It is to be regretted that a valuable suggestion which Dr. Farr made before the last Census was not acted upon. He recommended that facts connected with the rate of wages should be collected during the Census. Had it been attended to, much might have been stated here with precision which will only admit of approximation.
[136]Subsequently Mr. Bright went the length of saying, that Savings Banks were“nothing less than traps for the people who subscribed to them. There was a universal belief that Government was responsible.”
[137]Since writing the above, it is only fair to say, that we find this writer has taken no pains at all over the matter, but has simply benefited by the industry of another, without in any way acknowledging his obligations. Mr. Edward Taylor of Rochdale, in a pamphlet now before us, published several years before Mr. Scratchley's book, entitled“Savings Bank: ought Government to make good past losses in Savings Banks?”supplies the whole of the quotations given, and even the setting for them.
[138]The preamble of the first Act (Act 57 GeorgeIII.c. 130, 1817) runs thus:“Whereas certain Provident Institutions or Banks for Savings have been established in England, for the safe custody and increase of small savings belonging to the industrious classes; and it is expedientto give protection to such institutions, and the funds established thereby,”&c.&c.The preamble of the Act of 1828 runs exactly to the same effect.
[139]Much to the same purpose a well-known writer in theLondon Reviewsays:“As long as Savings Banks are Savings Banks, based, on the one hand, on the confidence of the poor, and, on the other, on the benevolence of the local clergy and gentry, acting as trustees and managers without fee and reward, and therefore without such bounden obligations as men can be called to account upon, so long will frauds periodically arise, opening up great gulfs of deficits, strewing thorns upon the pillows of the poor, and driving sharp pangs of despair into their hearts.”Dr. Hancock, in one of his admirable pamphlets, alluding to the system of checks relied on by the managers of many banks, says:“It is impossible, in the nature of things, to devise a perfect system of checks. So long as the work has to be done by human agency there must always be some risk. To secure the performance of actions by human agents, three forces commonly operate: 1, A morel sense of duty; 2, A fear of large pecuniary loss from liability, in case of the non-performance of duty; and 3, A fear of judicial punishment, if non-performance be made a penal offence. The limit placed on the liability of the managers effectually took away or reduced to a minimum the fear of loss and of punishment, and the divided responsibility there has always been between Government and the trustees, by weakening the sense of duty, did the rest.”
[140]The case of the Edinburgh Savings Bank, another excellently managed institution, is still more to the point, where unusual facilities produced an unusual amount of depositors and deposits.
[141]According to an excellent authority, Mr. Smiles, to whose admirable article in theQuarterly Review(Oct.1859) we are indebted for some of our particulars of the history of this movement, it would appear that the first proposal for Regimental Savings Banks was made in 1816 by Paymaster Fairfowl, but allowed to drop; it was taken up again in 1827, when Colonel Oglander, commanding a regiment of Cameronians, brought the project under the notice of the Duke of Wellington. The Duke could not see any benefit to be derived from the proposal, and wrote the following characteristic memorandum upon the papers:“There is nothing that I know of to prevent a soldier, equally with others of his Majesty's subjects, from investing his money in Savings Banks. If there be any impediment, it should be taken away; but I doubt the expediency of going further.”He added something further, however, which, also eminently characteristic, opened up a new feature in the case, and closed the door to such proposals till after the Duke had left the service.“Has a soldier,”continued he,“more pay than he requires? If he has, it should be lowered, not to those now in the service, but to those enlisted hereafter.”Colonel Oglander had no idea that the soldier should have less than his“thirteen pence a day, and a penny beer money,”and therefore suffered his proposals to be simply negatived.
[142]The deposits in Seamen's Savings Banks—
[143]To the Honorary Secretary of this bank, Mr. W. W. Morrell, we are greatly indebted for much information on the Penny Bank movement; and, as an ardent Savings Bank reformer, for much information on our subject generally.
[144]Any of our readers who may desire fuller information on the subject of Penny Banks, or particulars as to their management—information which we should have been glad to have furnished, had our space permitted—could not do better than get an admirable little pamphlet on“Penny Banks,”by the Rev. J. E. Clarke, of Derby. (Bell and Daldy, 1859.) Mr. Smiles, in hisWorkmen's Earnings, Strikes, and Savings, also devotes a short chapter to describing, in his usually effective way, their results on the provident poor.
[145]The first Preliminary Savings Bank in Scotland was started at Annan, in Dumfriesshire, and Mr. Sikes was consulted about it. A correspondent writing to Mr. Sikes a few years ago, says:“It may gratify you to know that I some time since met with the Rev. James Mackenzie of Dunfermline, formerly of Annan, who told me that he had ten Penny Banks at work at Dunfermline! I believe the Annan one was father to them all, and you to the Annan one, so that your family is spreading rapidly, and becoming a great multitude throughout the entire kingdom!”
[146]Groombridge &Co.London.
[147]Reference is due to another gentleman, Mr. Maitland, actuary and subsequently treasurer of the Edinburgh Savings Bank, who now seems to have urged, even before Mr. Sikes did so, English Savings Bank managers to give to depositors more of the facilities granted by Savings Banks in Scotland. Speaking of 1843-5, Mr. Maitland says,“I met with no sympathy when I urged the duty of cultivating the small deposits of thereallylabouring classes. I was bitterly opposed in my advocacy of giving more hours weekly to the public, and was deemed almostmadwhen I insisted that we should all pay on demand,at all eventssums under 10l.”—Letter from Mr. Maitland to Mr. Sikes, February, 1857.
[148]This proposition was revised in 1862 by Mr. Scratchley in the last edition of hisPractical Treatise, but without in any way mentioning the name of Mr. Sikes as the original suggestor of the plan.
[149]The Marylebone bank up to 1860 only allowed two per cent. on sums below 30l., but this arrangement has since been modified.
[150]So well managed indeed, that we hope it may be long before they are superseded, however desirable it may be that bulk of the existing Savings Banks should become merged in a better system.
[151]See next page.