CHAPTER IX.. On the Development of the Post Office Savings Bank System.

ON THE DEVELOPMENT OF THE POST OFFICE SAVINGS BANK SYSTEM.

"Should the Post Office Savings Bank bill become law, and should it also answer, we shall then possess an institution the convenience and value of which it will be impossible to over-estimate, and this author will deserve the thanks of the country. The country will recognise at once the universal boon of a bank maintained at the public expense, secured by the public responsibility, with the whole empire for its capital, with a branch in every town, open at almost all hours, and, more than all, giving a fair amount of interest."--Times, March 20, 1861.

"I have been asked," says Mr. Edwin Chadwick, "by several M.P.'s and others, what I thought of Post Office Savings Banks. I have answered them, that I know no measure of late years affecting the condition of the working and the lower middle classes which appeared to me so excellent in principle. I am disposed to say, as Sir Robert Peel said with reference to the Encumbered Estates Act, that it is 'so thoroughly good a measure, he wondered how ever it passed.'"

We have already seen that the Post Office Savings Bank bill was rapidly and successfully passed through Parliament, and did become the law of the land. The Act "to grant additional facilities for the depositing small savings at interest with the security of Government for the due repayment thereof," received the Royal Assent on the 17th of May, 1861. The author of the bill has the best claims on the thanks and gratitude of the country. The press and the people of this land have, almost with one accord, been loud in their praise; and the three-quarters of a million of depositors, most of them attracted to saving habits by the facilities he then for the first time offered them, joined in silent thanks. The scheme for working this measure, organized in the Post Office after repeated requests from Mr. Gladstone, accomplished to a great extent under his oversight, and then carried through Parliament by his administrative ability and convincing eloquence, will ever cause his name to be most prominently associated with the new system; and among the many triumphs of his skill, this one will stand out with distinct prominence on the page of history.

The Post Office Savings Banks have not only "answered," to use the phraseology of the "leading journal," but they have attained a marked position, and have been, in every respect, an eminent success. Not nearly so much, however, with regard to their present condition, as to their manifest and inevitable destiny in the future, the Postal Banks are entitled to a high place amongst the social institutions of the country. In every department of labour, the new banks have become, and must yet become to a far greater extent, most effective agents in the social and moral improvement of the people, and will give tenfold effect to the endeavours which have been made, in so many directions, to better the condition of the masses. Next, perhaps, to the repeal of the Corn Laws, this is the greatest boon ever conferred on the working classes of this country; and next to the scheme of Penny Postage itself, the scheme of Post Office Banks is the greatest and most important work ever undertaken by the Government for the benefit of the nation. Whatever differences of opinion may exist as to the claims of the present Ministry to public gratitude, there can, we should imagine, be but one opinion now as to the vast advantages conferred upon the bulk of the people by the measure of 1861.

The success of the Post Office Banks has been of the most complete kind. Whether we consider, as we shall now proceed to do in proper order, the amount of the business done; the nature of the business done; the influence of these banks on the provident habits of the community; the results upon those small banks which more especially have partaken of the character of eleemosynary institutions; and the manner in which the business of the Postal Banks has been organized and performed, the scheme has far more than realized the anticipations under which it came into existence.

As to the Amount of Business done. The interval between the passing of the Act and the 16th of September, 1861, was occupied, it appears, in completing the arrangements for the conduct of the measure, including the appointment of Mr. Chetwynd to control the scheme he had originated, and a staff of superior and subordinate officers with which to begin the business; and on that date operations were commenced by the opening, in England and Wales, of 301 Money Order Offices as Savings Banks. The grounds upon which the first places were chosen were unquestionably the best that could have been adopted to test the feeling of the country with regard to the scheme itself. They were, (1) Avoidance of all collision with existing banks which supplied a fair amount of accommodation; (2) The selection of important and thickly-populated districts, making that selection embrace the widest possible area, and leaving no inconsiderable tract of country without the required accommodation; (3) To meet the wishes of the public, so far as these wishes were indicated by memorials or requisitions to the authorities; and (4) To take care that the postmasters of selected places were trustworthy, and capable of transacting the business efficiently. Had the scheme failed under such conditions as thus seem to have been imposed, little hope could have been held out that it would ever have been successful: as it happened, however, the banks were found at once to supply a great public want. The authorities seem to have been so far encouraged, that in six weeks an enormous addition was made to the number of banks. 254 were opened in the month of October following, 338 in November, and 784 in December, making the entire number of 1,629 new banks open to the public at the end of the year.

On the 3rd of February, 1862, the benefits of the measure were extended to Ireland, by the opening of 300 banks; on the 17th of the same month, 299 banks were opened in Scotland; and by the end of six months from the original commencement of the plan, there were in the United Kingdom no fewer than 2,532 Post Office Banks in existence. 400 additional banks were opened in 1863; and at the end of 1864 the total number of banks was increased to 3,219. Up to the present time (March, 1866), the number of Post Office Banks is 3,369, of which,

2,469 are in England and Wales, 525 are in Ireland, and 375 are in Scotland.

There is now a Government Savings Bank not only in every town in the United Kingdom, but in every large village; and over and above this already ubiquitous and comprehensive arrangement, the large towns of the country have each a number of new depositories for savings proportionate to their size and population. Thus, in the metropolis, at the present moment of writing (April, 1866), there have been provided the extraordinary number of 452 Post Office Banks; in Manchester, there are 26; in Liverpool, 25; in Birmingham, 22; in Edinburgh, 18; in Glasgow, 18; in Dublin, 15.

In the three months of 1861 during which the 1,600 banks were in operation for portions of the period, 25,729 persons opened accounts with them, and deposited money to the extent of 167,530l. in deposits of the average amount of 3l. 11s. 10d. At the end of the next year (1862) 180,199 persons had opened accounts in these banks, depositing 1,947,139l., and withdrawing less than a quarter of that sum. Year by year, up to the present time, as appears by the accompanying table, the increase of deposits, and the increasing number of new accounts, are far more than proportionate to the increase of facilities; and, as showing the firmer hold that these banks have taken on the community, this fact is most satisfactory and gratifying. Equally so, and a most convincing proof of their success, is the account of the total amount of business shown to have been transacted up to the 31st of December last. Up to that date these banks have received from no less than 857,701 depositors, in 3,895,135 deposits, a sum of money amounting to 11,834,896l.; the withdrawals during the same period of four years numbering 1,011,379, and amounting to 5,619,251l. There were in December last, 611,819 open accounts, the amount standing to the credit of these accounts being 6,526,400l.

TABLE showing the Amount and Nature of the Business done in the POST OFFICE SAVINGS BANKS from their opening in September, 1861, to December, 1865.

Table column headings: Col. A: Date. Col. B: Number of Deposits. Col. C: Amount of Deposits. Col. D: Average amount of each Deposit during the period. Col. E: Number of Withdrawals. Col. F: Amount of Withdrawal. Col. G: Average amount standing to the credit of each Account.

+---------+---------+----------+--------+---------+---------+---------+ | A | B | C | D | E | F | G | +---------+---------+----------+--------+---------+---------+---------+ | | £ | £ |£ s. d. | | £ | £ s. d. | |From 16 }| | | | | | | |Sept. to}| 46,643| 167,530|3 11 10 | 1,702| 6,759| 6 9 9 | |31 Dec. }| | | | | | | |1861. }| | | | | | | |Year 1862| 592,573| 1,947,139|3 5 9 | 95,592| 431,878| 9 10 3 | |Year 1863| 842,848| 2,651,209|3 2 11 | 197,431|1,027,154|10 11 4 | |Year 1864|1,110,762| 3,350,000|3 0 3 | 309,242|1,834,849|10 12 1 | |Year 1865|1,302,309| 3,719,018|2 17 1 | 407,412|2,318,611|10 13 4 | +---------+---------+----------+--------+---------+---------+---------+ |Total |3,895,135|11,834,896|3 0 9 |1,011,379|5,619,251| 9 11 4 | +---------+---------+----------+--------+---------+---------+---------+

In the ten years ending November, 1861, the annual average increase in the total number of Savings Bank depositors was at the rate of 3-4/5 per cent. In one year from this date the increase in the number of depositors--taking the depositors of the old banks and the Post Office Banks together--was at the rate of 6-3/4 per cent. That this increase was altogether owing to the introduction of the new system, scarcely requires proof: a few of the old Savings Banks, Edinburgh, Glasgow, Liverpool, and Birmingham for example, increased their business during 1862; but the aggregate of the old Savings Banks lost more business than the few gained. Again, in all cases, the gain of the Post Office Banks was far greater than the loss of the old banks. Throughout the entire kingdom the old banks lost 55,000, and the Post Office Banks gained 160,000 depositors.

The rate of increase shown in the first year has been continued with inconsiderable variations up to the present time, and, in his last Report, the Postmaster-General, in view of all the facts of the case, states: "On the whole, it seems reasonable to expect that the annual increase in the business of the Post Office Banks will for some time be from 130,000 to 140,000 in the number of depositors, and from 1,400,000l. to 1,500,000l. in the capital of depositors." The correctness of these calculations will not depend to any appreciable extent on the increase of facilities, such as the opening of new banks: the Post Office Banks have already been so widely established that little additional accommodation will be required for some time to come. It is made to depend, we should imagine, on the principles of Post Office Banks becoming more and more widely known, and their facilities more and more appreciated. This has clearly been the experience of the last two years. In 1864, 161 new banks were opened, and the increase of depositors was at the rate of 42 per cent.; in 1865, only 73 new banks were opened, and yet the increase in the number of depositors was at the rate of 40 per cent.

As to the Nature of the business done. Some idea of the nature of the increased business done may be gathered in several ways. First and foremost the number of Post Office Savings Bank depositors represents an enormous number of accessions to the list of frugal people who have perhaps for the first time begun to save, and of those who, more prudent and less confiding in their fellows, seek the security of the State for the safe custody and prompt repayment of their savings. It is a somewhat remarkable fact, that of the total amount which had up to the end of last year been deposited in Post Office Banks, not much more than a million and a half (allowing for money transferred otherwise than by means of the regular transfer certificate) had been withdrawn from the old Savings Banks. Moreover, out of this large sum more than half seems to have come to the Post Office Banks through the voluntary closing of Savings Banks on the old principle,--the Birmingham Savings Bank contributing a third of the whole amount.

From these facts, it seems quite clear that the business acquired by the Post Office Banks, at any rate up to this time, is almost entirely newly-created business, and that the older Savings Banks have only been interfered with to a trifling extent. Besides the amount already referred to, other sums might undoubtedly have been placed with the older institutions, had there been no competition; but by far the greatest proportion is plainly derived from sources hitherto unreached, and consists of money which no amount of persuasion could divert from the hundred forms of indulgence to the older channels of economic hoarding.

The Post Office Banks, further, seem not only to have attracted a public of their own, but to have created, as it were, a fresh race of provident people. All kinds of Savings Banks have been established to give, in some form or other, facilities for the deposit of small savings. When the new banks commenced, the average amount of a single deposit in the existing banks was, and had been for some time, 4l. 6s. 5d.; during the first year of the existence of the Post Office Banks, the average amount was only 3l. 1s. 9d. But this average has been still further reduced. The Post Office authorities, describing more recent operations, state, that as the nature and advantages of these banks became known to the poorer classes, and as new banks were opened from time to time in rural districts, and densely populated portions of our large towns inhabited by those classes, a gradual reduction in the average amount of each deposit has taken place, and that that amount has for some time ranged between 2l. and 3l., whilst the average amount of each sum deposited in the old Savings Banks has not undergone any marked alteration. The conclusion which has been arrived at is the only one possible, viz., either that the Post Office Banks have reached a poorer class of depositors than the old banks have been able to attract, or that in increasing so many fold, as we shall have to describe, the facilities for the more frequent deposit of small sums, they have at the same time, and proportionately, increased the inducements to frugality, and removed the temptations to wastefulness.

Still dealing with the peculiar nature of the new business, it is very important that one fact should not be lost sight of. In our opinion, it completes the evidence as to further accommodation being urgently required by the poorer classes. In those towns and districts which before 1861 were considered to be well supplied with sufficient and well-managed institutions, the success of the Post Office Banks has been most marked. Thus in Edinburgh, the rate of increase in the number of depositors rose in one year from 3-1/2 to 5-3/4 per cent.; in Dublin, from 4-1/2 to 7 per cent.; whilst in the county of Middlesex, where, before the Post Office Banks were established, there were "forty-one prosperous and excellently managed banks, which seemed to hold out all needful inducements to prudence and frugality," no less than 30,000 persons were added to the roll of Savings Bank depositors in the year following the introduction of the new banks into that county. The rate of increase before 1861 was 2-1/2 per cent.; in 1861 and 1862, it was at the rate of 10 per cent.

The average amount standing to the credit of each depositor in the Post Office Banks has for some time ranged between 10l. and 11l., and is not expected to exceed that sum for some time to come. Of the whole number of depositors, about four per cent. have balances due to them of 50l. and upwards. A general idea of the mass of depositors may be gathered from the above facts, and they may be supplemented by the following table, which, though only the result of an estimate, is near enough for our purpose. In March, 1865, a certain proportion of the open accounts in the Post Office Banks was examined, in order that some idea might be obtained of the occupation of the entire number,--from which it seemed probable that the 524,340 depositors were made up pretty much as follows:--

Females, Male Minors, and Trustees 285,769 Mechanics and Artisans, Domestic and Farm Servants, Porters, Policemen, Labourers, Boatmen, Fishermen and Seamen 140,518 Tradesmen and their Male Assistants, Farmers and Clerks of all kinds except those mentioned below 53,756 Males of no stated occupation, Professional Men and their Clerks or Assistants 31,353 Males engaged in education 5,692 Persons in the Army and Navy 4,682 Persons employed in the Revenue Departments 2,570 ------- Total 524,340 -------

Of the entire number of Post Office Savings Banks, ninety-one out of the 3,369 have failed to obtain depositors. Of this number,

23 are in England and Wales, 5 are in Scotland, and 63 are in Ireland.

It is impossible satisfactorily to account for the failure in so many cases, or, in the absence of information as to the particular localities to which facilities have been offered in vain, to say whether there may not be some special reasons, other than indisposition to save, which may have operated against the transaction of business. Among the great number of banks established in England, there must unquestionably be some poor and sparsely populated districts to which they have penetrated; whilst in Ireland, which contributes nearly three-fourths of the non-effective banks, these districts must be still more numerous, and the population still less able to save. Add to this, the fact that in more than one large district in the sister country the grievous frauds in the old class of banks have left an indelible impression on the minds of the people,--if they have not, as one authority states, destroyed all thoughts of provident habits,--and that this impression is not likely to be effaced in the chronic agitation which has for so long prevailed in Ireland, and the only wonder is, that more of its 525 Post Office Banks are not non-effective.

* * * * *

As to the Results of the New Banks on the Old ones. Before the Post Office Banks were established, 638 ordinary Savings Banks were open in the United Kingdom for the receipt of small savings. Of their distribution throughout the country and the accommodation which they gave, including the number of hours the bulk of them were open, we have already spoken in a previous chapter. The Post Office Banks were no sooner established and business fairly commenced than two very important results followed in banks on the old establishment. The first was, that some of the more important Savings Banks increased their accommodation to the public,--the duration and frequency of the time allowed for doing business being extended: the second was, that the trustees of many of the old banks came to the resolution to close their institutions, on the ground that their time and benevolence were misspent in competing with the new banks, which enormously increased the accommodation they had been powerless to afford.

The best possible test, not only of the influence of the new banks, but of their marked superiority and adaptability to the wants of the country, is found in the fact, that since 1861, no Savings Bank on the old principle has been established. If it be not desirable to establish new banks, it cannot be a matter of much concern to the country how soon the bulk of the existing banks on that principle give up their charitable business. We say bulk advisedly, for many of these banks do not partake, in the ordinary sense of the word, of the character of charitable institutions. From a careful and impartial view of the whole subject, it seems to us, that no measure short of the abolition of the Post Office Banks can keep alive those of the old Savings Banks which cannot compete with the former in the quality and the amount of their accommodation. On the other hand, no one who has at heart the interests of those classes which Savings Banks seek to benefit would wish to see the existence of any institution shortened, which, while profitably ministering to a great public want, is neither subsidized by the State, nor conducted so as to leave an impression on the depositor's mind that it is charitably ministering to his necessities. Those which cannot give the necessary facilities, must succumb sooner or later; those which answer to the latter requirements, may still have a long course of honour and usefulness before them. Before 1861, there might be no option or alternative to the existing order of things; the institution of Post Office Banks has supplied both.

Twelve months after the organization of the Post Office Banks the trustees of thirty-five of the old Savings Banks had closed their banks. Up to the present period (March, 1866), sixty additional banks have followed the example thus set them; this making a total of--exclusive of Penny Banks--ninety-five banks which have transferred their business to the Post Office. The least important of these institutions was that of Dumbarton, established in 1846, and which had but 83l. of capital. The most important bank on the list is Birmingham, originally established in 1827, and which had, on the 20th of November preceding the date of closing, a capital of 583,461l. The fact of the Birmingham Savings Bank coming over, formed the one necessary assurance that the new system had obtained, not only the confidence of the country, but the tacit acquiescence of those who managed large businesses of the same nature. It was very properly argued at the time, that if a majority of such trustees as those of Birmingham could come to the conclusion to hand over their well-managed and flourishing bank to the Government, any bank might do so.

The following Return, which has been carefully compiled, is of sufficient interest and importance to occupy the prominent place we assign it.

RETURN containing the Names of SAVINGS BANKS CLOSED during the years 1861 to 1865 inclusive, together with the Date of Establishment, the Number of Hours open per Week, and the Capital on the 20th November preceding the date of closing of each Bank.

+------------------+----------+-------------+-----------+-----------------+ | | | Number | Capital on| | | | Date of | of Hours | 20th Nov. | | | Name of Bank. |Establish-| open per | preceding | Remarks. | | | ment. | Week. |the date of| | | | | | closing. | | +------------------+----------+-------------+-----------+-----------------+ | England. | | | £ | | |Ambleside | 1857 | 1 | 2,503 | | |Andover | 1827 | 2 | 4,121 | | |Baldock | 1816 | 4 | 17,573 | | |Bermondsey | 1856 | 1 | 3,131 | | |Biggleswade | 1816 | 7 | 10,496 | | |Billericay | 1860 | 1 | 2,290 | | |Birmingham | 1827 | 12 | 583,461 |This Bank ranked | |Bishop's Castle | 1861 | 1 | 1,988 | fifth or sixth | |Blackpool | 1859 | 1 | 2,197 | in the Empire. | |Bodmin | 1839 | 2-1/2 | 54,638 | | |Bowdon/Altrincham | 1823 | 4 | 49,183 | | |Braintree | 1859 | 1 | 7,510 | | |Brixton | 1860 | 1-1/2 | 2,300 | | |Bromley | 1816 | 2 to 3 | 22,496 | | |Buntingford | 1845 | 2 monthly | 5,127 | | |Burford | 1826 | 1 | 11,100 | | |Canterbury | 1816 | 8 | 149,572 |Closed on account| |Carshalton | 1817 | 1-1/2 | 11,198 | of the fraud | |Chesham | 1854 | 1 | 3,379 | previously | |Cheshunt | 1850 | 2 | 1,535 | spoken of. | |Chipping Norton | 1860 | 5 | 5,694 |20 Nov. 1863. | |Chipping Ongar | 1858 |2 fortnightly| 3,476 | | |Clapham | 1816 | 1 to 2 | 28,411 | | |Clayton West | 1861 | 1 | 494 | | |Cleobury Mortimer | 1859 | 1 | 2,580 | | |Coddenham | 1818 | 4 | 15,729 | | |Covent Garden | 1816 | 2 | 18,125 | | |Cuckfield | 1836 | 1 | 7,191 | | |Dartford | 1816 | 2 | 26,549 | | |Deptford | 1816 | 2 | 30,712 | | |East Dereham | 1854 | 1 | 8,840 | | |Enfield | 1839 | 1 | 132 | | |Epping | 1817 | 3 monthly | 16,023 | | |Evesham | 1839 | 2 | 24,516 | | |Finchley | 1859 | 3 | 1,428 | | |Fleetwood | 1852 | 1 | 5,033 | | |Halstead | 1816 | 1 | 20,742 | | |Hartlepool | 1844 | 2 | 6,617 | | |Holloway | 1856 | 1-1/2 | 10,632 | | |Holt | 1861 | 1 | 1,448 | | |Hornsey | 1819 | 1 | 101 | | |Hoxton | 1843 | 8 | 494 |This was the | | | | | | first Bank | |Kirby Stephen | 1846 | 1 | 6,957 | which | |Leatherhead | 1860 | 1 | 592 | transferred its| |Lechlade | 1844 | 1 | 4,636 | business to the| |Lutterworth | 1822 | 6 | 36,332 | Post Office. | |Lymington | 1818 | 2 | 1,394 | | |Mansfield | 1818 | 5 | 64,671 | | |Market Harboro' | 1838 | 1 | 24,659 | | |Melbourne | 1855 | 1 | 2,552 | | |Old Kent Road | 1859 | 2 | 3,538 | | |Over Darwen | 1860 | 2 | 1,071 | | |Pimlico | 1860 | 5 | 1,900 | | |Poulton-le-Fylde | 1822 | 1 | 30,822 | | |Rawtenstall | 1836 | 2 | 240 | | |Rochford | 1818 | 2 | 9,887 | | |Romsey, New Hall | 1859 | 1 | 408 | | |Rugby | 1818 | 2 | 46,839 | | |Saddleworth | 1824 | 4 | 6,601 | | |St. Alban's | 1859 | 1 | 4,140 | | |Sedbergh | 1859 | 3 monthly | 856 | | |Sheerness | 1818 | 1 | 4,128 | | |Shiffnal | 1819 | 11 monthly | 15,851 | | |Southwold | 1858 | 2 monthly | 1,248 | | |Stavely | 1854 | 1 | 1,457 | | |Tredegar | 1855 | 2 | 1,726 | | |Wallasey | 1843 | 1 | 3,229 | | |Walsall | 1825 | 2 | 48,492 | | |Wandsworth | 1816 | 1 | 1,269 | | |Watford | 1817 |4 fortnightly| 38,968 | | |West Bromwich | 1846 | 7 | 27,491 | | |West Ham | 1819 | 2 | 17,739 | | |Weston-super-Mare | 1830 | 3-1/2 | 3,644 | | | | | | | | | Wales. | | | | | |Bala | 1849 | 1 | 14,386 | | |Carnarvon | 1854 | 2 | 159 | | |Dolgelley | 1819 | 36 to 48 | 30,291 | | |Llangollen | 1852 | 6 monthly | 3,841 | | |Machynlleth | 1834 | 36 | 10,166 | | |Merthyr Tydvil | 1853 | 2 | 3,745 | | |Narberth | 1857 | 2 | 2,242 | | |Newtown | 1856 | 1 | 2,960 | | |Portmadoc | 1846 | 11 | 2,732 | | | | | | | | | Scotland. | | | | | |Dumbarton | 1846 | 10 | 83 | | |Fort William | 1859 | 6 | 2,023 | | |Glencoe | 1859 | 2 | 396 | | |Leith | | | 195 |Date and hours | |Oban | 1840 | 12 | 106 | not given in | |Stranraer | 1860 | 4 | 1,533 | Return for | | | | | | 1861. | | Ireland. | | | | | |Ballymena | 1860 | 2 | 1,455 | | |Bray | 1819 | 2 | 4,512 | | |Carndonagh | 1860 | 4 | 906 | | |Gorey | 1822 | 1 | 2,550 | | |Lisburn | 1838 | 2 | 2,674 | | |Strabane | 1821 | 2 | 16,081 | | +------------------+----------+-------------+-----------+-----------------+

It ought to be stated that the Act of 1863, for amending the Post Office Savings Bank bill, offered considerable inducements to the winding up of the then existing banks. Its principal objects were to relieve those trustees who were desirous to close, from liability with regard to the accounts of depositors who had not applied for repayment of their money, or for certificates to enable them to transfer their deposits to Post Office Banks, and also to make the transfer of the accounts of minors compulsory on the authorities of either class of banks on the application of the proper parties concerned. More important than either, however, was an addition made to the bill before it was allowed to pass. This addition consisted of a clause empowering the trustees of any old Savings Bank who should desire to close their bank, to compensate their paid officers out of the Separate Surplus Fund. This was a welcome and very proper addition to the bill, and tended materially to mitigate the inconveniences likely to arise from the officials, perhaps of many years' standing, being thrown out of employment. The Birmingham Bank, when it transferred its business, took advantage of this clause to compensate its officers accordingly; and this course has subsequently been followed by other banks.

* * * * *

We have left ourselves little space to describe what remains to be told of the manner in which the business has been organized and performed. Happily, however, those parts of the system with which the public have more especially to do, have not wanted numerous and faithful exponents; by means of the newspaper press, shoals of official and non-official tractates, handy-books, magazine articles, and public lectures, the public have been made fully aware of all the practical details of a scheme which is at once so simple and so satisfactory in its working, and which is at the same time as capable of indefinite expansion as it is of infinite power for good. It is indispensable, notwithstanding that these details are now so well known, that we should rapidly glance at some of them, prior to speaking of the special advantages which these arrangements have made possible.

With regard to Depositing Money. By the Post Office Savings Bank bill any person who will subscribe the requisite declaration that he is not a depositor in any other Savings Bank may now, on every working day of from six to ten hours' duration, deposit any sum not less than one shilling, and not more than 30l. in one year, in any of the 3,300 places in the United Kingdom where the Post Office has been opened as a Savings Bank; also, that for every pound so deposited for a month or more, interest at the rate of 2l. 10s. per cent. per annum shall be paid, and that while the money remains in the hands of the Post Office the credit of the British Government shall be staked for its due repayment when asked for.

Any person wishing to become a depositor in a Post Office Bank has only to go to that Money Order Office which is most convenient to him, subscribe the statutory declaration, and pay in to the postmaster or receiver the amount he wishes to deposit, and a bank book will be handed to him, properly numbered, and on which his name, address, and occupation will be written. The amount handed to the postmaster will be found entered as a first deposit in the proper column of the book, and this entry will be attested by the signature of the postmaster, and stamped with the official stamp of his office. From the moment the depositor gets his book handed to him he possesses, for all practical purposes, a sufficient guarantee for the absolute safety of his money.

This is, however, not the only security he has; and to explain the further process it is necessary to follow the money after it leaves the depositor's hands. The postmaster before giving up the book is required to enter the full particulars of the transaction in a single line on a Form of daily Savings Bank account supplied to him for the purpose. At the close of each day the local postmaster adds up the total amount received by him during that day on Savings Bank account, and, adding that sum to the account of Money Orders issued during the same day, sends the entire account to the chief Money Order Office in London. On its arrival at this office the account undergoes a primary check, and is then sent to the Savings Bank department, where it is thoroughly examined in all its details. In the first place, an acknowledgment is filled up and addressed to every depositor named in the account. The account is then sent to the ledger branch, where its particulars are copied into the books of the department; and subsequently, but on the same day, to ensure accuracy and afford a check, each acknowledgment is compared by different officers with the entries made in the ledgers, and then despatched by the same night's post to the address furnished by the depositor.

The receipt of this acknowledgment completes the depositor's parliamentary title to repayment in full of principal and interest. Should the depositor not receive his acknowledgment within ten days of making the deposit, application must be made (and it may always be made free of postage) to the Postmaster-General for it. Experience has shown that no depositor has been put to the trouble to write twice for an acknowledgment, and but a very small modicum indeed have written at all. Practically three days would suffice for the operations required in England, and four for the greater part of Ireland and Scotland; but in some few cases the longer period of ten days is necessary. Were it not for the check, moreover, which the department thus obtains upon its own officials, and the confidence which the arrangement gives to depositors, the acknowledgment might perhaps be dispensed with, inasmuch as the postmaster's entry in the depositor's book is not bad evidence that the money has reached the hands of a Government official,--a fact which, if it could not be disputed, would not, we should imagine, be set aside.

In every subsequent case where a person adds to his first deposit, exactly the same routine is followed. He may, however, if he desires it, or requires it, continue his deposits in another bank from that in which he originally opened his account; nay, if he chooses, he need not make two deposits in any one bank, but may take a tour throughout the country, or, if he lives in London, may go all round the metropolis to the 450 banks there, and see which he likes best, and no one will interfere with his freedom of choice. And though a depositor of this curious description would give additional trouble, the routine of the work is so simple that he would not embarrass the department in any way.

With regard to Withdrawing Money. A person having once run up a score in the Post Office Banks, may withdraw it with great readiness and with extraordinary and unexampled facilities. A depositor who requires some, or all, of his money, has only to go to whichever Post Office Bank he likes best, in whatever part of the country he may happen to be at the time, and ask for the usual printed Form. He must fill up this Form with the number of his deposit-book, the name of the office where he commenced to make his deposits, the amount he wants, and the place where he wants it paid, and adding his name, address, and occupation, send the Form (which needs not to be post-paid, is addressed on the back, and provided with an adhesive seal,) to the Postmaster-General and wait the result.

Following the fortunes of this notice, we find that it arrives in proper course at the chief Savings Bank. The signature attached to it is there compared with the signature of the original declaration, and if, on comparison, there be no grounds for suspecting anything amiss, the notice is sent to the ledger keeper in charge of the account of the particular depositor. If it be found that he has a proper balance in the bank to meet his claim upon it, a warrant for payment is at once prepared. This warrant is an order to the postmaster named to pay the amount wanted; and after the amount of the warrant has been entered in the ledger, and checked by a superior officer, who certifies its correctness, it is at once sent off by post to the address furnished by the person withdrawing. At the same time, and by an admirable system of manifold writing,--suggested by Mr. West of the Mail Office for the use of other branches of the Post Office, and which has been with great advantage applied to Savings Bank operations,--the postmaster himself is furnished in fac-simile with a copy of the warrant sent to him in the nature of an advice.

When the postmaster is applied to for the money in question he carefully compares the warrant with the advice to pay, in the same way as he deals with the familiar money order; he also compares the signature to the receipt on the warrant with the signature in the depositor's book; and if he be satisfied with the scrutiny, he pays the money, entering the transaction in the withdrawal part of the depositor's book, and signing and stamping the book accordingly. When the paid warrants are returned to the chief office, and when the postmaster sends up an account of the day's transactions, the accounts and entries are checked in the chief Money Order Office and the chief Savings Bank, in much the same way as described in the case of deposits; the whole being arranged to provide an admirable system of check in which two branches of the Post Office,--viz., the chief Money Order Office and the Receiver and Accountant-General's Office,--as well as the chief Savings Bank, are immediately concerned.

When the Post Office Savings Bank bill was introduced into the House of Commons, the proviso that the scheme to be founded upon it should be self-supporting, formed an important consideration in the statements of the Chancellor of the Exchequer, and was strongly urged by other members. It appears that from the first the operations have not only been self-supporting, but exhibit each year an additional amount of assets over liabilities, as the balance-sheet for last year (given in the Appendix) will show. According to the Parliamentary Paper No. 523, it was estimated that the cost of each transaction in the Post Office Banks would be 7d.; the actual average cost of each transaction up to the present time has been 6-7/8d. We have no doubt, as bearing on the point of the cost of the Postal Banks, the following estimate (which, as proved by the actual result, has been so accurate) will possess an interest to the general reader. It is an estimate of the cost of One Hundred Thousand transactions under the Post Office Savings Bank bill, assuming the proportion of deposits to withdrawals and of transactions to accounts to be the same in the Post Office Banks as in the existing Savings Banks, when the former shall be in full operation:--

£ s. d. Estimated cost of receipts and payments by Postmasters 210 0 0

Estimated cost of transmission to central office, including check on receipts and payments, &c. 690 0 0

Estimated cost of keeping accounts with depositors, including calculation and entry of interest, periodical comparison of depositors' books, check on withdrawals, preparation of general accounts, stationery, and other miscellaneous items and general management 1,750 0 0 ------------ 2,650 0 0 To which may be added, 10 per cent. as a margin for omissions or errors of computation 265 0 0 ------------- Total cost of 100,000 transactions £2,915 0 0 -------------

We will now conclude this chapter with a rapid survey of the peculiar advantages of the system of Post Office Banks, with some remarks on what may be called the deficiencies of the system.

The system of Government banks seems exactly to meet the points most required by those whom the older kind of banks had no power to attract, as well as of that considerable class who, rather than not save at all, would save under inconveniences which they were powerless to remove. For years it was impossible to provide the conditions and meet the wants of the poor in these respects, but there can be no doubt that they have now been met. These conditions, these wants, were absolute and unquestioned security for their money; despatch, both as to depositing and withdrawing money; and secrecy in the transactions in which they should engage.

With regard to Security. The Post Office Banks being part of the machinery of Government itself, offer the highest possible security,--the whole credit and solvency of the British Government being guarantee for the perfect safety of the deposits.

As to Despatch. To the poorer classes, as much, and perhaps more than to any others, time is money. Their time is not their own, and now a few minutes may be stolen from the dinner-hour, or an opportunity may be snatched as the labourer passes to and from his work, to do that which before was no ordinary or agreeable task to him. The unparalleled convenience which attends the transaction of his business contributes to this despatch and this saving of his time. Should misfortune overtake him, he may withdraw the whole of his deposits within two or three days; should his occupation compel him, or his tastes incline him, to move frequently about from place to place, he has only to carry his bank-book about with him, and he may withdraw sums at his convenience at any Money Order Office in the kingdom; and thus, though he may have originally deposited his money at the Land's End, he may draw it out when at John o'Groat's, or in some remote nook of Ireland. This arrangement is, we understand, taken advantage of to a large extent. The advantages offered in the quick withdrawal of money is also a most important feature. Enormous sums of money are wasted by the poor in borrowing for an emergency; there can be no doubt that much money has been and is wasted even in waiting till the time arrives to get the money out of the ordinary Savings Bank. "If a poor person," says an intelligent writer, "wants 4l. immediately, he would give 25 per cent. for it." Few could lose in having to wait a couple of days for their money.

Then as to secrecy. None are more jealous of their little savings being known than the poorer classes: a large number of operatives have cogent reasons for secrecy, or, at any rate, privacy. Indeed, it seems to have been agreed upon that, if these classes cannot keep their savings quiet, many will not save at all. The wage-receiving class are naturally and properly averse to bringing their savings under the notice of their masters or their masters' friends. Savings Bank managers, even when not masters of workmen themselves, are generally local dignitaries well known to such. In the Postal Banks there is, or need be, no occasion for particular observation; the officials are required to conciliate confidence; to observe the strictest secrecy; and it is our conviction, gathered after no inconsiderable experience, that nowhere so much as in Government offices is the work conducted without distinctions of class.

Next to the advantages of which we have just spoken, is that secured by the arrangement to undertake the receipt and accumulation of small sums. A working man may now take his shilling to the Savings Bank as readily as his master may take his pounds, and the former will have no occasion to feel that he is made the object of a charitable clause. In seeking to bring a working man to put by a shilling in its bank, the Government hopes to induce a habit of saving, and may fairly expect to take his larger sums when saving habits have been induced. Mr. Gladstone's decision to take sums as low as a shilling was almost universally accepted as a wise one. Mr. Gladstone had long interested himself in the condition of the workman, and no one knew better than he that the labouring classes are not suddenly masters of whole pounds, and that, when they are in the act of accumulating it, the temptations to break in upon the little stock laid by are ever present, and are often too strong to resist.

So far the principles of this important measure are admirable ones, scarcely admitting of question, almost beyond criticism: they have rendered the action of the banks simple, facile, all-comprehensive, and ubiquitous. The rate of interest given is, however, perhaps on the border-land, as it were, between unquestionable and questionable policy. The interest given to depositors in Post Office Banks is at the rate of two pounds ten shillings per cent. per annum, or one halfpenny per pound per month. That this rate is satisfactory to a large section of the people of this country, or that the other attractions of the Post Office Banks amply counterbalance the disadvantage of the low rate, is evident from the enormous sum--twelve millions sterling--deposited in those banks in little more than four years; at a time, too, when the old Savings Banks, which are enabled to pay ten shillings per cent. more than the others, have put forth their best efforts to keep the business in their hands, when all kinds of allurements have been held out to those who have surplus funds to dispose of, and when the rate of interest ruling in the Money-market has been, as it still is, exceptionally high. These facts ought perhaps to close the case, and make the interest rate, if not one of the recommendations of the measure, at any rate a part of the scheme which does not detract from its merits as a whole. As, however, this is a point upon which some little soreness is felt and expressed in different quarters, we may be excused for here urging a consideration or two.

This soreness has originated, to no little extent, from the consideration of the inequality of the rate allowed in the ordinary Savings Banks and the Post Office Banks; this feeling is kept up by the consideration of the fact, that that inequality still exists and is likely to exist. The old Savings Banks deposit their funds with Government, and are allowed interest on their money at the rate of 3l. 5s. per cent.; the Post Office Banks, of course, deposit their money with Government, and are allowed interest at the rate of 2l. 10s. per cent. Out of the fifteen shillings per cent. difference between the two rates, an average of half of it is given by the old banks to their depositors. Now it is well known that the average cost of each transaction in the Post Office Banks is little more than half the average cost of a transaction in the ordinary Savings Banks. If Government can still afford to pay the old Savings Banks the higher rate of interest, it might afford, at the lowest computation, to give ten shillings per cent. more to depositors in the Post Office Banks. If Government cannot afford to pay the higher rate, it ought to discontinue its charity, which, like all other charitable doles, excites discontent amongst those who think they have, and really have, the right de facto, if not de jure, to share it. That the rate should be equalized in one way or the other admits, we think, of little question; but that the Government should pay no more than it can pay without loss admits of less.

Reverting to the consideration of the actual Post Office Bank rate, it is perhaps unlikely that the small tradesmen class--except where such persons lodge their money at the Post Office merely for security--feels satisfied with it. Happily, however, this is a class which does not need to be considered, and which scarcely will be considered. The Government offers no factitious allurements or inducements to any class of the population; and if it did, would be certain to confine the inducements to those portions of the poorer classes who stand most in need of encouragement. And as for the rest, the Post Office Banks do not in any way interfere, as Mr. Gladstone has recently said, "with the labouring man's liberty of choice, or the liberty of choice enjoyed by anybody else; if he thinks he can do better with his money than by carrying it to the Government Savings Bank, by all means let him do better with it." A low rate of interest is given for the principal deposited; but then that principal is guarded with uncommon security, and can be moved, added to, or withdrawn from, with the greatest possible convenience. And these terms, theoretically and practically, suit the industrious classes, whoever else they do not suit. Practically they meet the wants and satisfy the demands of a large section of depositors, or the banks would not have shown such an extraordinary amount of success. Nor are we in want of authorities who assumed, theoretically, that this would be so. "If Government give security," said a shrewd witness before the Savings Bank Committee of 1858, "they should pay less interest, on the principle that Chubb's locks cost more than the ordinary ones."

Dr. Chalmers took great interest, as our readers must already know, in Savings Banks. His argument was, that the ready receipt and payment of small sums together with safe custody was everything, and the rate of interest quite unimportant; he more than once said, that "the result of high interest had been to swamp our Savings Banks as a national system." This question of interest was largely discussed in Mr. Slaney's Committee of 1850. In that Committee Mr. John Stuart Mill was asked whether perfect security or a high rate of profit was most sought after by the industrious classes; to which he replied: "In the case of the working classes no doubt security is the main object, and it is so in the case of all whose savings are small." In the same Committee, Mr. J. M. Ludlow, an eminent barrister, gave it as his opinion that "the poorer a man is, the more important to him is the safety of his investment, independently of the question of profits;" and in answer to a similar question addressed to him, the secretary of a working man's building society said, that "the certainty of security is the most powerful inducement to investments among the working population."

Thus, while it doubtless admits of question more than the other details, no serious fault need be found with that clause which provides the rate of interest to be given. Equalization in the rate of interest of all Savings Banks connected with the Government is far more necessary than that the standard of the one should be raised to the standard of the other. The days have gone by when any dole of charity should be held out to working men as an inducement to save: it is more than questionable whether those days should ever have arrived. The working classes do not want charity at the hands of the public; they long wanted security and reasonable facilities: and when these were provided, as they have been, they were willing that the rest should be left to themselves. All interest given more than the money actually produces or may fairly earn, is repugnant to them; or if it is not, it ought to be made repugnant to them.

The deficiencies, if we may so call them, of the Post Office Savings Bank system, to which we promised to allude in closing this chapter, are those features which have been inherited from the parent system, and consist, of restrictions which, we think, are now as unnecessary and undesirable as they are hampering and vexatious. By section 14 of the Post Office Savings Bank bill it was ordered that "All the provisions of the Acts now in force relating to Savings Banks as to matters for which no other provision is made by this Act, shall be deemed applicable to this Act so far as the same are not repugnant thereto." Under this legislation all the restrictions which were thought--especially during the earlier history of Savings Banks--to be necessary to confine these institutions to the poorer classes, have been continued down to the present time. The principal regulations to which we refer are, the Declaration which is required from any one opening an account, and the limitation of deposits to 30l. in any one year, and 150l. in all; and that when deposit and interest together reach 200l. all further interest shall cease. The reader who may have followed us through our account will be aware of the reasons which actuated the Legislature in making these arrangements. These reasons do not now obtain. No steps are taken (and we have never heard that it is intended ever to take such steps) to confine the benefits of the Post Office Banks to the labouring classes. Why, therefore, these classes, or any other class allowed to deposit in these banks, should be restricted to any amount--or, at any rate, such a small one--it is difficult to understand. To the poor this restriction forms a barrier to saving habits; with regard to any other class, the amount might be as unlimited as it is in the Funds. As a set-off against the unremunerative character, to say the least, of small deposits, no limit should be placed on large ones. It is obvious, that the larger the sums invested the greater will be the success and the profits of the scheme, the more remote will be any prospect of loss, and the more certain will be the creation of a permanent marketable stock of Two and a Half Per Cents.

We are glad to find that this restriction has not escaped the notice of many who are entitled to be heard on the subject.

The Rev. G. H. Hamilton, who made, perhaps, the earliest modern proposals for Post Office Banks, suggested that the limit should be "from one shilling to ten pounds per day;" and since the passing of the Act he has made exertions, hitherto without success, to get the limitation extended to include those sums. Mr. Bullar, also equally entitled to respectful attention, has likewise made subsequent proposals having in view, to some extent, the granting of facilities for investing larger sums.

It is interesting to find that the Post Office Savings Bank system has just been introduced into our Australian colonies and not a little curious and instructive to find that some of the provisions go much further than we have yet ventured at home. The main feature of the "Post Office Statute, 1865," is an echo of the English Act, but in several of its provisions its scope far exceeds the latter in liberality. No declaration is needed; instead of 30l. in any one year, the colonial depositor in Victoria is only debarred from exceeding 50l. in a fortnight, and the interest given, which is at the rate of four per cent., is not withheld to any deposited amount under 1,000l. Liberal as are the colonial authorities in Victoria, those at Queensland far surpass them. In the Post Office Banks at Queensland there is no limit whatever to the amount which may be deposited; interest is allowed at the rate of five per cent.; and this rate of interest is paid on all deposits without limitation of any sort. Making all due allowances with respect to the relative position of our colonial possessions at the antipodes and the mother country, it seems clear that the former have advantages over us in the matter of their Government Banks, and we commend the example of the Victorian Legislature to our own, and trust that the only marked defect in our Act may soon be remedied.

Whenever the Post Office of a village or hamlet is advanced to the dignity of a Money Order Office, it will also be opened for Savings Bank business.

Up to the end of February last the total sum reached exceeded twelve millions sterling,--a sum which it took the original old banks, with no competition, eight years to realize.

Thus, as we learn from an authentic account, in Bristol the old Savings Banks lost 700 and the Post Office Banks gained 2000 depositors; in Dublin the same relative proportions were 400 loss and 1,400 gain; in the county of Kent there was a loss on the one hand of 3,500, and a gain on the other of 9,300 depositors; in Middlesex, the old banks lost 12,000, and the Post Office Banks gained 42,000 depositors.

Report on the Post Office, 1864.

Report on the Post Office, 1864, p. 13.

This Transfer was settled in November, 1863. The trustees and managers at a special meeting deliberated whether or not to carry on the Bank "under the increased responsibility imposed on trustee by the 11th clause of the Consolidation Act (1863), or to empower the managers to transfer the deposits to the Post Office Savings Banks." They resolved by a majority of two to take the latter step, and the transfer was made immediately afterwards.

Since this Return was completed, the trustees of two other banks have given notice to close. The one, a small bank at Castle Wellan, in Ireland, and the other, the Leighton Buzzard Savings Bank, make, with the Huntingdon Bank, a total of ninety-eight transfers.

The Huntingdon Savings Bank has given notice to close. The capital of the Hunts Saving Bank amounts to £60,000.

The fullest information on these matters may be gathered, in cases where the reader is not thoroughly familiar with them, from many sources. In addition to the Act, and the Regulations for the Post Office Banks, three little manuals may be specially mentioned to which reference may profitably be made. (1) Handy Book on Post Office Savings Banks. London: Stevenson, 1861. (2) Post Office Savings Banks: a few Plain Words concerning them. London: Faithfull and Co. (3) My Account with Her Majesty. Reprinted from All Year Round and the British Workman.

The well-known Form itself which in one piece of paper gives the acknowledgment, and folded, leaves room for the address, was designed and registered by Mr. Walshe, of the Post Office.

Acknowledgments are received in most parts of England by return of post, or within thirty-six hours; in some parts of Cornwall and Wales two days, and in some parts of Ireland and Scotland three days, are required.

The departmental arrangements for these cases, technically spoken of as "cross entries," need not be further explained.

The depositor's book must, of course, be invariably presented in every transaction, and when the depositor has obtained repayment of all his balance the book must be given up in order that the account may be closed.

We regret that we cannot find space to describe more minutely the system adopted, as also so much of the internal arrangements of the chief Savings Banks as have been permitted to be made public. We may say, briefly, however, that the Chief Savings Bank commenced operations in a part of the building at St. Martin's-le-Grand, but was soon driven to seek more accommodation. Its location is now in St. Paul's Churchyard, where, in spite of large premises, we believe, it once more became restricted as regards room, and has since acquired additional space. The office is presided over by a Controller, who is aided by an Assistant Controller and two principal clerks. The staff comprises a large number of permanent clerks of different grades, and an enormous number of temporary clerks employed upon the more routine work. The office itself is divided into four branches,--the Deposit Branch, the Withdrawal Branch, the Account Branch, and the Correspondence Branch. For the benefit of all those who are interested in Savings Bank management, we hope that an interesting paper, read by authority, by Mr. Chetwynd, the first Controller, before the Congrès International de Bienfaisance, in June, 1862, may soon be reprinted. It gives every detail which it is desirable to know.

The operations have not been carried on altogether without fraud. The cases, however, only serve to show how secure the depositors really are from loss. In 1863 the then Postmaster of Beverley embezzled Savings Bank money, when the authorities at once announced to the depositors that it should be made good. This instance, and another in which a clerk was concerned, are, we believe, the only cases of the kind; but if they were constantly occurring,--which it is now next to impossible they should be--it would not matter a pin-head to depositors, who, the moment they pay in their money into the Post Office, and obtain a deposit book, stake that money on the National credit.

The facilities existing for withdrawing accounts from one class of banks and placing them in the other tend also to despatch and convenience. By means of transfer certificates, to be had at any Savings Bank, a depositor may transfer his account without ever seeing his money.

The Secretary of a Workmen's Building Society was examined before Mr. Slaney's Committee (1850) on the Investments for the Savings of the Middle and Lower Classes, when the following evidence was elicited:--

"I think that one reason why the labouring man does not invest in the Savings Bank is, that the fact of his being able to save money is used as a pretence why his wages should be reduced, and he carefully excludes from the knowledge of his employer that he is able to save. I have found that the workmen of one district go to a distance to find a Savings Bank, and will not go to their own. Their names are called loudly and officially, and it becomes whispered about that so-and-so is a saving man, and may therefore work for less wages."--Vide Evidence of Mr. W. Cooper.

Vide p. 59.