Chapter VII (1)

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

"Were greater facilities provided for saving, and greater
encouragement given by the intelligent classes to the
formation of provident habits, we believe the habit of
economy would spring up in many quarters where at present
it is altogether unknown. The working man, though he may
not like to be patronised, likes to be helped; and those
who help to provide him with convenient places in which to
deposit his spare earnings, will not fail to be regarded
by him as among his best friends."--MR. S. SMILES.

In the fourth chapter we endeavoured to trace the progress of Savings Banks up to the year 1841, or after they had had a legalized existence of twenty-five years. We there tried to show that, for some years prior to that period, a manifest improvement had set in, and was rapidly proceeding, in all that related to the social condition of those classes for whose benefit such institutions as Savings Banks are mainly intended; and we think we succeeded in proving that the progress of these banks was commensurate with the gradual national advancement. Except in the years marked by financial or political embarrassment, the number of Savings Banks increased in a fair and regular proportion each year; and not only so, but the first table we gave (page 91) showed conclusively that the amounts deposited increased in the different years in the same proportion. We would now take up the statistics where we left them, and present the reader with a continuation of the same, in a slightly different form.

TABLE 4.[134]

Showing the amount of Deposits and Withdrawals, and the Capital,
of Savings Banks, at the end of each year from 1841 to 1861
inclusive.

+-------------+-----------+-------------+--------------------+
| | | | Capital of Savings |
| Year ending | Deposits. | Withdrawals.| Banks in the |
| 20th Nov. | | | United Kingdom. |
--------------+-----------+-------------+--------------------+
| | £ | £ | £ |
| 1841 | 5,694,908 | 5,487,723 | 24,536,971 |
| 1842 | 5,789,203 | 5,656,160 | 25,406,642 |
| 1843 | 6,327,125 | 5,333,015 | 27,244,266 |
| 1844 | 7,166,465 | 5,716,275 | 29,653,180 |
| 1845 | 7,153,176 | 6,697,042 | 30,950,983 |
| 1846 | 7,300,367 | 7,255,654 | 31,851,238 |
| 1847 | 6,649,008 | 9,060,075 | 30,236,632 |
| 1848 | 5,862,742 | 8,653,108 | 28,114,136 |
| 1849 | 6,196,883 | 6,522,760 | 28,537,010 |
| 1850 | 6,363,690 | 6,760,328 | 28,930,982 |
| 1851 | 6,782,059 | 6,305,566 | 30,277,654 |
| 1852 | 7,281,177 | 6,684,906 | 31,754,261 |
| 1853 | 7,653,520 | 7,116,330 | 33,362,260 |
| 1854 | 7,400,141 | 7,956,347 | 33,736,080 |
| 1855 | 7,188,211 | 7,654,133 | 34,263,135 |
| 1856 | 7,741,453 | 8,023,583 | 34,946,012 |
| 1857 | 7,581,415 | 8,375,095 | 35,145,567 |
| 1858 | 7,901,925 | 7,839,903 | 36,220,362 |
| 1859 | 9,021,907 | 7,335,349 | 38,995,876 |
| 1860 | 9,478,585 | 8,258,421 | 41,258,368 |
| 1861 | 8,764,870 | 9,621,539 | 41,546,475 |
+-------------+-----------+-------------+--------------------+

From the above table, many important facts may be gathered. Speaking of the yearly proceeds, in 1847, 1848, 1849, and 1850, the withdrawals of money exceeded the deposits by amounts respectively of 2,411,067_l._, 2,790,366_l._, 325,877_l._, and 396,638_l._ This extraordinary state of things is partly accounted for by the panic which set in about this time among Savings Bank depositors, owing to the discovery of numerous frauds, and, as a matter of course, the knowledge of the divided and defective responsibility under which the system was worked; but more especially was it owing to the commercial crisis of 1847-8. In the three following years, 1851-2-3, the crisis quite over, and a general examination of Savings Bank accounts tending to reassure the public mind, the deposits again gained their natural ascendency, when, in 1854-5-6-7, the excess paid was at least equal to the excess received in the three previous years. There can be little doubt but that this result again was owing in some measure to the Crimean war, and the scarcity of money during the period, but principally to the agitation which generally prevailed among depositors at the constant failures in the Legislature when attempts were made to place Savings Banks on a proper footing; these failures leading to repeated petitions for a Select Committee to go over the whole subject. In 1858 there was a slight improvement; in 1859 a considerable increase in the deposits, clearly the result of the investigations of the Select Committee of the previous year, which Committee, though it had done little towards a final settlement, had certainly dispelled a cloud of misapprehensions that had gathered round the concerns of Savings Banks. That improvement continued, though in a less degree, in 1860; when the Returns for 1861 show another large decrease of deposits and an increase of withdrawals, which we would not be wrong were we to attribute to the frequent discussions in Parliament, and in the country, relative to a new system of Government Banks.

Having to some extent accounted for the variations observable in the above table, let us proceed to compare the progress made during the period of twenty years now under consideration with that shown during the previous quarter of a century and described in a previous chapter. Between the years 1825 and 1835 the increase in the aggregate amount of deposits in the Savings Banks of the United Kingdom was at the rate of exactly fifty per cent. Between the years 1835 and 1845, the returns show an increase in deposits in this decennial period of ninety-eight per cent. Comparing the returns for 1845 and 1855, the progress made, if indeed progress is the right word to use here, was at the rate of _only five per cent._

Were we to take the first five years of this last decennial period, we should find that there had absolutely been a _decrease_ in the business of Savings Banks to the extent of _twelve per cent._, but this unsatisfactory result admits, as we have just shown, of partial explanation. To continue our survey, however, up to the latest period, viz. including the Returns for 1864, we find that the deposits for 1854 amounted to 7,400,141_l._, and the deposits for 1864 to 8,174,679_l._, showing an increase during ten of the most prosperous years this country has known since the establishment of Savings Banks at the rate of only about eight per cent.

It is almost unnecessary to say that as regards all the material elements of prosperity the progress of the country between 1841 and 1861 was most marked. Taking England and Wales only, we find the amount deposited in Savings Banks in 1841 was 4,440,379_l._; in 1861, the amount deposited was 7,188,034_l._ Now the population of England and Wales was in 1841 15,929,000; in 1861 it was 20,119,496. The declared value of our exports was in 1841, 51,545,116_l._; in 1861 it had increased to the enormous sum of 125,102,814_l._, and last year (1865) it stood at over 165 millions sterling. What the increase in the amount paid as _wages_ was likely to be, we leave our readers to estimate from these sums. In nothing is the national prosperity more manifest than in the relative number of paupers in receipt of relief. Though the population increased during the twenty-two years in question several millions, the total number receiving in and out-door relief, was, in 1849 (this being the first year the return was made) 934,419; in 1861, the number was 890,423, or an actual decrease of forty-four thousand persons. Such statistics as the above might be multiplied indefinitely, especially those relating to the wonderful progress of the Money Order Office at the Post-Office, but it may suffice just to make a reference to the increase of wages during the period.[135] Mr. David Chadwick, an eminent authority in Lancashire, states that between 1840 and 1860 the wages of the operatives employed in the different departments of the cotton trade had increased from 12 to 28 per cent.; in the silk trade the increase had been 10 per cent. In the building trade the increase throughout the country had averaged from 10 to 30 per cent.; in the iron trade from 8 to 20 per cent. It would scarcely, therefore, be too much to say that within the period, _and up to_ 1861, while the price of most kinds of food had decreased, the wage for almost every description of labour had increased in at least an equal proportion.

In view of such facts, and before we attempt to describe the different plans which were produced in order to make these useful institutions once more progressive ones, let us try to ascertain why more of the money thus gained did not reach the Savings Bank. A careful examination of the Returns of Savings Banks will show beyond the possibility of doubt that the first and greatest check received by these institutions was when it became apparent that they did not possess within themselves that absolute security which they were thought almost universally to offer. We could not well exaggerate the result; this is the fountain from which all the ills have proceeded. The evil did not confine itself to the banks where the depredations had been carried on; it was not confined to the banks already established; but it extended to quarters where before there had been a manifest disposition to increase the facilities and to meet the wants of an advancing population, and this feeling was destroyed. The first effect of the frauds was, of course, to stop the deposit of money; in a smaller degree and among less educated people they even tended, as we have seen, to destroy the habit of laying by any money at all; but among all they produced a decided conviction that the financial arrangements of the system, especially with reference to the anomalous connexion between Savings Banks and the Government, were unsound.

We have several times referred to the state of the law as to the exact nature of this connexion, but it is necessary to return to it again as entering very largely into the consideration of the slow progress of Savings Banks. There can be no question that the great bulk of the British people, and not simply the lower and middle classes, imagined--up at least to the time of the great frauds of 1845-48--that Government was fully responsible for all the money placed in Savings Banks. In 1851 we find Mr. Bright saying in Parliament: "Nine out of every ten depositors believed that they had the security of Government for whatever money they invested, and that in placing that money in the local Savings Bank they were securing it better than if they lodged it in the hands of the wealthiest private banks in the country."[136] Mr. Hume said the same on several occasions. Mr. H. A. Herbert, an Irish member, whose name deserves to be associated very intimately with legislative attempts to put Savings Banks on a proper footing, testified over and over again to this impression being the prevailing and universal belief. General Thompson told the House in 1848 that he "was struck with profound astonishment to learn that Savings Banks were not what in common parlance was called 'as good as the bank.'" He had advised servants on numerous occasions to put their money into such banks in the belief that they had complete Government security for their money. Such expressions of opinion from men who, though they had never penetrated into the mysteries of official life, could scarcely be thought ignorant in financial questions of this kind, show how wide-spread must have been the misapprehension, and are of themselves almost a sufficient justification of the ignorance of the bulk of the poorer classes.

Nor were there wanting excellent and numerous authorities who must have contributed to this improper impression. Mr. Scratchley, in his _Practical Treatise on Savings Banks_, pp. 72-4, has taken great pains[137] to string together a formidable list of those whom he finds inculcating the same view as that already expressed by prominent members of Parliament during debate. Suffice it to say, that when such books as McCulloch's _Commercial Dictionary_, Porter's _Progress of the Nation_, _The Quarterly Review_, _Chambers's Information for the People_, _Chambers's Magazine_, _The Penny Magazine_, and the Irish school books, laid it down that depositors had perfect security from Government for the money paid into Savings Banks, those of the class which relies to such a great extent on the intelligence of those above them may well be excused for falling into error, and may well be pitied when called upon to bear loss. Government took up the subject of Savings Banks at an early stage in their history, with the object of "protecting" them,[138] and to that end they made it an imperative duty on the part of the trustees of these banks to deposit their money with the State; unfortunately, however, no steps were taken to enforce this provision. Here lay the fatal mistake, and the source of all the trouble. "The whole success of Savings Banks," says Mr. McCulloch in his _Statistics of the British Empire_, "depends upon the security the depositors have for their money. No one was accustomed to speak of Savings Banks without commenting on the increase in the stability of the country by giving the poorer classes a direct interest in the preservation of public credit; but it requires no great amount of penetration to see that so much entirely depends upon the fact that faith is kept with such depositors." To all intents and purposes proper faith was _not_ kept by the banks, and a proper knowledge of the real amount of risk the poor were running was wrongly withheld from them: hence the undoing of a great part of the good work accomplished in the first quarter of the present century by the establishment of Savings Banks. "What was the use," indignantly asked a member of the House of Commons of the Government in 1851, "of preaching to the poor the duty of being honest, industrious, and self-dependent, if the fruits of their hard earnings were thus to be swept away?"

Ten years afterwards a more powerful voice than Mr. Herbert's asked the same question, and appealed to the country for a reply. "If ever," said the _Times_ newspaper, speaking of Savings Bank money in a leading article, 17th January, 1862, "there was a sacred fund, this is one; if ever there was a class and a fund which deserved the protection of wise laws and stringent responsibilities, surely this is the class and this the fund." Says an objector: "Irregularities will creep into the management of the best of funds, and frauds are as old as the world." Says the _Times_: "How can people treat such cases as a matter of course! How can we look on while the poor commit their all to such institutions as these! It is useless to tell us that nine out of ten, or ninety-nine out of a hundred of these Savings Banks, are conducted with scrupulous care and constant supervision." Referring, then, to the recent case at Bilston, it continued, "How can the depositors of a few hoarded shillings know where the Fletchers hold sway, and where the managers do their duty? The only sound advice to give the working classes under such circumstances is, to have nothing to do with institutions _where such things can occur_." The argument was irrefutable; nor was the advice given hastily. The Postal Banks had then been introduced to the country, and the article thus winds up: "This advice would have been difficult to give some years ago; it is not so now. The Post Office Savings Banks offer an escape from danger, and at the same time remove the necessity of taxing the time and attention of philanthropic men in offices where negligence may occasion such wide-spread ruin. We confess that, in the face of such occurrences as those of Bilston, we hope the day will speedily arrive when these 531 fallible Savings Banks will all cease to exist."[139]

We have said that the frauds in some of the Savings Banks led not only to their stoppage, but to the closing of others in the neighbourhood. Nothing can be clearer on this point than a reference to Ireland. In 1846, there were 74 Savings Banks in Ireland; in 1851, no fewer than 21 of them had ceased to exist. In 1846 there were eight in county Down; in 1851 only two remained. In county Kerry there were almost an equal number; in 1851 not one remained. Doubtless other causes besides the breaking of faith with the people led to this, partly and indirectly,--such, for example, as the failure of crops,--though still there was the fact, significant enough, that in the districts least visited by famine, and where the people were most industrious and frugal, there had been the greatest diminution of these banks. Bearing in mind such facts, and also that it can be proved that the frauds to which Savings Banks have been so liable have led directly or indirectly to the breaking up of no less than fifty of these institutions in the United Kingdom, let us proceed to some inquiries as to how far the banks, uncertain and insecure as they were in 1861, met the requirements of the country in other respects.

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, entirely without Savings Bank accommodation. The following is a list of those thirteen counties:--

SCOTLAND.

Ayr, with a population of 189,858
Clackmannan " " " 22,951
Haddington " " " 36,386
Kinross " " " 8,924
Linlithgow " " " 30,135
Orkney & Shetland " " " 62,533
Peebles " " " 10,738
Sutherland " " " 25,793
Wigtown " " " 43,389

IRELAND.

Carlow, with a population of 68,078
Kerry " " " 238,254
Leitrim " " " 111,897
Longford " " " 82,348

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 that is, 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 is not 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 but _once a fortnight_, and ten but _once 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 but _four hours monthly_; 124 were open only _one hour each week_; and 150 open _but 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, with _ten 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 their money, 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 2,479_l._ was accumulated in 1856; in Dorsetshire the amount was 2,550_l._: on the other hand, in Lancashire, which we described as most insufficiently served with banks, the amount per thousand persons was only 1,562_l._, and in the West Riding of Yorkshire but 1,266_l._ 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, 200,000_l._ lodged at Manchester belonged to persons who could not even sign their names.[140] These facts 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 a consequence, 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 like provident 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 30_l._ in one year, except in the case of gratuities given for good conduct. When the sum of 200_l._ is reached, no further interest is paid. The interest allowed must not exceed 3_l._ 15_s._ 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 20_l._ 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 authorities _should know the extent_ of 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 at this 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 a _younger_ class, 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 1,580_l._ 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 52,354_l._ 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 of banks, 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 extent unknown 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 9,386_l._, 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 he _begins_ to 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 10_l._, 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 for good 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 work of 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 letter to the editor of the _Leeds 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 in their 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 a pamphlet entitled _Good 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 Savings Bank 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 previous _brochures_ relating 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, of which 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 the _Letter_ we 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.