HISTORY OF SAVINGS BANKS.

A HISTORY

OF

BANKS FOR SAVINGS

In Great Britain and Ireland,

INCLUDING

A FULL ACCOUNT OF THE ORIGIN AND PROGRESS OF
MR. GLADSTONE'S FINANCIAL MEASURES FOR POST OFFICE BANKS,
GOVERNMENT ANNUITIES, AND GOVERNMENT
LIFE INSURANCE.

BY

WILLIAM LEWINS,

AUTHOR OF HER MAJESTY'S MAILS.

LONDON:
SAMPSON LOW, SON, AND MARSTON,
MILTON HOUSE, LUDGATE HILL, E.C.

[All Rights reserved]

LONDON:
PRINTED BY R. CLAY, SON, AND TAYLOR,
BREAD STREET HILL.

TO

THE RIGHT HONOURABLE

WILLIAM EWART GLADSTONE, M.P.

CHANCELLOR OF THE EXCHEQUER,

&c. &c. &c.

THE GREATEST LIVING AUTHORITY ON ALL MATTERS OF FINANCE,
WHOSE NAME IS NOW INTIMATELY AND DESERVEDLY
CONNECTED WITH ALL THAT RELATES TO
THE SUBJECT OF THESE PAGES,

This Work

IS BY PERMISSION
MOST RESPECTFULLY DEDICATED.

PREFACE.

The present volume is offered as a contribution to the history of a number of provident schemes, which, though quietly working in the country for many years, and affecting to no small extent the social condition of great masses of the people, can scarcely be said to have found an annalist. I think I may fairly consider that the ground covered by this work has not previously been occupied. In saying so much, I do not forget the only book which has hitherto emanated from the British press on Savings Banks. Mr. Scratchley's Practical Treatise on Savings Banks deals, however, with the question technically, and is meant avowedly as a text-book for actuaries and those employed about Savings Banks. The present volume, on the contrary, while it may be supposed to possess some interest even for this limited circle, is not meant to take the place of the above, but seeks its public amongst general readers, and amongst those who, either from inclination in that direction, or through connexion with them as employers, take an interest in the progress of the industrial classes of our country.

Treating as this volume does of useful practical schemes and matter-of-fact topics, I have sought to avoid all matters of speculation, to speak in very plain terms and without waste of words, and, whilst noticing in their proper order all the different proposals having to do with the subject, to refrain from venturing upon any myself. My aim has been to give a full and accurate account of the early history of Savings Banks; and as subsequently to their origin the discussions in Parliament with regard to them and kindred subjects were no incorrect reflex of the feeling in the country at different periods, I have also dealt fully with the parliamentary history of these institutions. In this way Savings Bank reformers, both in and out of Parliament, and their measures of reform—many of them ending in the establishment of different kinds of supplementary banks—are made to pass under review; and the names of those who framed the original schemes, as well as of those who tried to improve upon them, are rescued, for a brief space at any rate, from a state of obscurity, if not of oblivion.

With respect to the latest modification of the Savings Bank principle, as exhibited in the measures brought about within the past few years by Mr. Gladstone, great efforts have been made—as great efforts have been needed—to treat all the questions involved fully and impartially, and to accord these important and far-reaching measures their due place amongst the other wonderful provident schemes of the present century.

Great pains have also been taken to ensure perfect accuracy, both as to facts and figures, and my acknowledgments are due to many gentlemen who are acquainted with the subject in all its bearings, who sent me information, or answered my inquiries, with great readiness and cordiality. It is less necessary to mention any of these gentlemen in this place, inasmuch as reference is frequently made to their assistance at the proper place in the body of this work; but it would be wrong to omit to state that, with regard to Mr. Gladstone's recent measures, I have had every facility granted me by the Post Office authorities for obtaining the necessary and the most recent information respecting these schemes, and that this assistance has been rendered in a manner which calls for my heartiest thanks, as the only sufficient or fitting acknowledgment.

Dealing as I have done with what Mr. Carlyle will allow to be one of the side sources of history, I venture to hope that some of the facts now gathered together may not be without their interest to the student of human progress in some of its highest aspects; while to all those who are directly concerned in such schemes, and to masters of workmen, to whom the concluding parts especially are more particularly addressed, this volume is offered, with some confidence that they will find much new and original matter in it, and some old matter put in a new light.

An Appendix is added, giving the Acts, or clear abstracts of Acts, at present in force for all the different descriptions of Banks for Savings, together with some of the latest statistical information which may be thought of value.

W. L.

London, May 24, 1886.

* * * * *

*_** Two questions connected more or less with my subject have been brought into prominence by the action of Parliament since the present work was completed, and to these questions it may not unreasonably be expected that I should in some way refer. The first, or the Savings Bank qualification in the new Reform Bill, concerns Savings Banks and Savings Bank depositors very intimately; the second question, or the proposal of Mr. Gladstone to employ a portion of the money of Savings Banks in reducing the National Debt, can scarcely be said to have an immediate bearing upon either.

With regard to the Savings Bank qualification, I may, perhaps, be permitted to say that, though received with hostility in some quarters and indifference in others, the balance appears to me to be in favour of the proposal. In most respects, if not in all, the qualification may be defended on the same grounds as the Forty Shilling Freeholds; the investment is about the same; the one is open to much the same objections as the other, and there are similar merits in each. Votes may be manufactured under the one equally as under the other, and it is not easy to understand why those who support the one Bye Franchise should oppose the other. Little trouble will accrue to Savings Banks under the Act; and the money forming the qualification may oftentimes be allowed to remain in the bank, whereas under other circumstances it might be squandered in unnecessary or unprofitable expenditure. The distinction may be hard on others quite as worthy of the franchise, but who may be in some way unfortunately circumstanced; and it may seem arbitrary to those who have an equal amount invested in some other shape: but these are the sort of arguments which may be brought against Fancy Franchises of any kind with quite as much reason as against this particular one. Working men who may claim the Franchise on the Savings Bank qualification will not be able to keep the fact secret that they are depositors, and that up to a certain amount; and they must submit, on misfortune overtaking them, to be deprived of a privilege which they may have learnt to prize: but, notwithstanding all these and some other minor considerations, I cannot help regarding the Clause as, on the whole, a fair and reasonable acknowledgment of the merits and claims of many of the best portions of the community, who were not influenced by the consideration of this electoral qualification when they originally commenced the practice of provident habits, and also of the claims of others who may not be unduly influenced by the prospect of citizenship which the Clause may henceforth hold out to them.

Mr. Gladstone's recent proposal to convert the 24,000,000l. of Consols, invested by the nation in Savings Banks, into Terminable Annuities concerns the Nation itself much more than Savings Banks. So far, indeed, as the matter affects the trustees of Savings Banks, or depositors in them, it was settled some years ago when the money was made a book debt, and the Government became the banker, as it were, for the sum in question. What the Government now does with the money is no concern of Savings Banks. This is put so plainly by Mr. Gladstone in his Budget speech, and is at the same time so indubitable, that to quote his words is to say all that can be said on this point. They (the trustees) have nothing to do with the money; that is a mere question of investing it with which we are alone concerned. If we lost every farthing of it, we should have to pay it to them; and if we made a profitable investment of it, it would be entirely our own affair. In one respect only is Mr. Gladstone's proposal specially satisfactory to Savings Bank officials and all who take an interest in Savings Banks. Under the operations described by the Chancellor of the Exchequer in his Financial Statement, and now familiar to every reader, the Balance estimated to be deficient, of over three millions sterling—a deficiency which has long been a bugbear in all considerations of the subject—will disappear as a separate item in the National Accounts in the process of redemption proposed. The entire scheme shows, especially and prominently, Mr. Gladstone's anxiety to reduce our enormous burden of debt. He here voluntarily proposes to cripple himself in no small degree in the matter of his resources. Should his proposals become law—and it is sincerely to be hoped they will—the process must go on, even when he or his successors may require to raise money at an obvious disadvantage; but if he be satisfied to throw the burden equally on years of prosperity and adversity, surely this is a matter on which the public generally should feel no fear.

CONTENTS.

  PAGE

CHAPTER I.

INTRODUCTORY CHAPTER 1

CHAPTER II.

ON THE ORIGIN OF SAVINGS BANKS 18

CHAPTER III.

EARLY LEGISLATION OF SAVINGS BANKS—1817 TO 1844 45

CHAPTER IV.

ON THE PROGRESS OF SAVINGS BANKS UP TO THE YEAR 1844 80

CHAPTER V.

LEGISLATION ON SAVINGS BANKS FROM 1844 TO THE PRESENT TIME 122

CHAPTER VI.

A CHAPTER ON SAVINGS BANK FRAUDS 183

CHAPTER VII.

ON THE DEFICIENCIES OF THE EXISTING SYSTEM, AND THE ESTABLISHMENT OF SUPPLEMENTARY SAVINGS BANKS 226

CHAPTER VIII.

ON PROPOSALS FOR GOVERNMENT SAVINGS BANKS 269

CHAPTER IX.

ON THE DEVELOPMENT OF THE POST OFFICE SAVINGS BANK SYSTEM 311

CHAPTER X.

ON GOVERNMENT INSURANCE AND GOVERNMENT LIFE ANNUITIES 345

CHAPTER XI.

CONCLUDING CHAPTER 377

APPENDIX 395

INDEX 437

HISTORY

OF

SAVINGS BANKS.

CHAPTER I.

INTRODUCTORY CHAPTER.

Archimedes was wont to say that he would remove the world out of its place, if he had elsewhere to set his foot, and truly I believe so far that otherwise he could not do it. I am sure that so much is evident in the architecture of fortunes, in the raising of which the best art or endeavour is able to do nothing, if it have not where to lay the first stone.—Sir Henry Wotton.

The habit of laying something by in a prosperous season for the wants of an adverse one is one of the very oldest customs in the world. All our laws, Divine and human, enjoin the exercise of providence and frugality as a social, and as a personal duty. These habits which are inculcated in Scripture