HC Deb 29 August 1848 vol 101 cc659-68

On the Motion that the House resolve itself into Committee,

SIR H. WILLOUGHBY

said, he had on a previous occasion presented a petition, signed by 41,000 depositors in various provident societies, representing a sum of 762,000l.; and he had now to present another petition, signed by 38,000 depositors in savings banks, representing a sum of 1,080,000l. against this Bill. They believed that its provisions would, when carried out, prove most dangerous to the interests of these institutions. And he must say, that they had not had the usual courtesy shown to them in reference to the intention of the Government to introduce this Bill, great as were their interests. They had not been favoured with such a notice as was invariably given even with respect to the commonest turnpike-road Bill. If the managers of some of the savings banks in Ireland had acted wrongfully, that was no reason why the management of English and Scotch savings banks should be interfered with. Although twenty-four witnesses were examined before the Committee with respect to the Irish savings banks, yet the Committee positively refused to hoar a single witness with regard to the English and Scotch savings banks. Was it fair, then, at so advanced a period of the Session, to press this obnoxious measure forward without having given the English and Scotch depositors any notice of the intended alterations? The Chancellor of the Exchequer would recollect, that when leave was asked to introduce this Bill, he asked him whether it was intended to make any alteration in the existing law with regard to the liability of trustees and managers; to which the right hon. Gentleman's answer was, that it was intended to render them liable only to the extent of 100l. each, unless they expressed their willingness to extend their liability. But when the Bill came before the House, he found in it no such provision. He could assure the right hon. Gentleman that this question of the liability of trustees and managers was a most delicate and difficult one. These parties represented stock to the amount of nearly 30,000,000l., and the number of depositors was immense. It was, therefore, of the utmost importance that their interests should not be lightly interfered with.

The CHANCELLOR OF THE EXCHEQUER

proposed to make an alteration in the first clause of the Bill; he proposed to strike out the whole of the words in the 7th line after the word "at," and the whole of the 8th, 9th, and 10th lines, as well as the words in the 11th line, as far as the word "Act." The effect of this alteration would he to place the trustees of savings banks in exactly the same position as that in which they were before the passing of the Act of 1844. He then proposed to insert such words as would limit the liability of a trustee to 100l.

SIR H. WILLOUGHBY

said, the proposed amendments of his right hon. Friend entirely altered the nature of the opposition which he should offer to the first clause of the Bill. A trustee, by the proposed alteration, would only be liable for such losses, &c., as should happen through his wilful neglect or default. His right hon. Friend simply proposed to repeal the 7th and 8th Vic, cap. 83, sec. 6. [The CHANCELLOR of the EXCHEQUER: Exactly.] So that to that extent the trustees and managers of savings hanks in this country would be restored to the same condition as they were in before 1844. [The CHANCELLOR of the EXCHEQUER: They will be exactly in their former condition in that respect.] The change of 1844 was made in the teeth of the expressed declarations and wishes of all parties interested in English and Scotch savings banks. But there was another great objection to the Bill, which, if not removed, would prove most fatal to the whole working of the Bill. He perceived that, by the third clause, auditors were to be appointed. Now, it was a very important matter to know how these auditors were to be paid. For his own part, he thought that the auditors were an excellent body of officers; but he was quite certain that, in consequence of the reduction of the rate of interest now payable on moneys in saving banks, he knew that small banks had no funds out of which they could be paid. With regard to the fifth clause, which was the most objectionable of all, it was quite impossible to ascertain in two days what were the feelings of the immense body of depositors who were scattered throughout the whole of this country, and many of them abroad. Many of them were servants. He felt persuaded that rather than run the risk which this Bill would entail upon the trustees, they would resign their trusteeship. He believed that the third clause could not be worked as it stood. He should really like to know what had occurred in the working of English and Scotch savings banks to induce the Go- vernment at this late period of the Session to interfere so objectionably with such large interests. He thought that the parties who were interested in this question had a right to complain of the manner in which the proceedings of these banks had been watched by the Commissioners for the Reduction of the National Debt. An impression had gone abroad—and he believed it was perfectly true—that the savings bank money had been used for other purposes than those which related to the savings banks. He would not say whether or not the money had been used advantageously for national purposes; but, under the administration of those Commissioners, very great and serious losses had occurred. If any question was to arise as to any deficiency, they might feel assured that the trustees and managers in England and Scotland would not consider themselves responsible for any act done in relation to these trust moneys after they had passed out of their hands. He was glad to find that the right hen. Gentleman admitted that they ought not to be responsible after the money had got out of their hands; but still there was this obvious conclusion to be drawn, that the savings banks of this kingdom would have been in a much more flourishing condition in every respect had greater facilities been given by Parliament for their efficient management.

MR. HENLEY

concurred in the greater part of what had fallen from the hon. Baronet who had just sat down, and thought the measure had not been well digested, and could not at this late period of the Session, be well considered. The only complaint he had ever heard of the English savings banks was, the low rate of interest, arising from the expenses of audit. The Bill would cause panic and alarm, and he entreated the Government not to persevere with it.

COLONEL THOMPSON

desired to know the amount of tendency in this Bill to increase the security of the depositors in the savings banks. He supposed nothing was clearer than that if there were final defalcations, they must be made good out of the public purse. It would justify a jacquerie if they were not, and if after all the preaching to the industrious classes, exhorting them to confide their savings to the care of their aristocratic betters, it was found their money had been left to be run away with without resource. Things were better managed in France, where institutions of this kind had government security, as everybody believed to have been the case here. If the Government were wise, they would engage at an early period next Session, to bring in a Bill to give Government security to the savings banks.

LORD G. BENTINCK

Sir, as the Government seem determined to persevere, and to have no regard for the just remonstrances of the independent Members of this House, I am necessitated to act in a manner which will at all events mark my disapproval of their conduct, and of the provisions of this most crude and undigested measure. Sir, I move that this Bill be committed this day three months. The evidence upon which this most important Bill is founded is that of four or five witnesses—men connected with Ireland exclusively, with the exception of Mr. Tidd Pratt, who is the Registrar General of Savings Banks. Their evidence is not published—the Committee sat but nine days—and yet it is upon such a foundation as this that a Bill, affecting an immense number of the people of this country, and dealing with no less a sum than 26,000,000l, is brought before Parliament at the end of August. The report itself is the most extraordinary that ever was presented to Parliament. It is as remarkable for its brevity as for its vacuity—as brief as it is worthless. But then. Sir, this Bill is meant to apply to England. There was not a single Engligh witness examined, with the exception I have stated, nor is there a syllable about England in the report. The report is styled "The Report of the Select Committee appointed to inquire into Savings Banks in Ireland." All the evidence is kept back. Yet the Chancellor of the Exchequer asks the House of Commons to sanction this Bill. The report says— Your Committee has proceeded with the inquiry entrusted to them by the House; but owing to the late period of the Session they have found themselves unable to bring it to a satisfactory conclusion; and they are of opinion that it is advisable that a further inquiry should take place, either during the recess or in the next Session of Parliament, into the existing system of savings banks. They are of opinion, however, that it is expedient that a Bill should be introduced in the present Session of Parliament, regulating the liability of trustees of savings banks, and providing for the appointment of auditors of savings banks. The Committee make no recommendation that the depositors should be subjected to any new regulations on the production of their books. But the Bill which the right hon. Gentleman brings in has the following provision:— And be it enacted, That the rules of every savings bank shall specify a number of days, not loss than two in every year, ending on the 20th of November, on which the book of each depositor shall be produced at the office of the said savings bank for the purpose of being inspected, examined, and verified with the books of the institution by the auditor; and in case the said book shall not be produced on the second of the days mentioned in any one year ending as aforesaid, the said account shall be closed, and all interest shall cease to accrue on the sums deposited from the last day on which the said book should have been so produced; provided, nevertheless, that the trustees or managers shall have the power to reopen the said account, but only to allow interest thereon from the time when the same shall have been reopened; and an extract of this provision shall be enrolled as one of the rules of every savings bank. The Chancellor of the Exchequer comes down with this little-considered and ill-prepared Bill, and which he has shown he does not understand himself. The clause I have just read allots two days in each year for the production of depositors' hooks, that they may be inspected and verified, and awards as a penalty for their non-production the cessation of interest and the closing of their accounts. I have no hesitation in saying that the Chancellor of the Exchequer must he ignorant—perfectly ignorant—of the nature of this provision. In the parish in which I reside, Marylebone, there is a savings hank in which there are no less than 18,700 depositors. The actuary waited upon me in reference to this most absurd Bill, and said that if 18,700 depositors were seen hurrying to the hank in two days it would cause a run upon the hank. The investigation into the present system of savings banks was, as far as England is concerned, a perfect Star Chamber business. Both the secrecretary of the Marylebone savings bank, and the secretary of the Bishopsgate savings bank, in which there is no less than one million sterling deposited, applied to the Committee for leave to watch its proceedings, but that leave was refused. Is the Government really serious in forcing on a measure like this almost on the last day of August—a measure of great importance—a measure not sought for and not needed, at least in England, upon half-a-dozen lines of a report of a Committee who examined four or five witnesses. The First Minister of the Grown is not present—this Bill ought not to be discussed in his absence. But the Chancellor of the Exchequer assured us on Friday night that he would bring in another measure next year, and which would effect a radical change in savings hanks. What is the use of bringing in a Bill which is to have a four months' application? But let us see the practical working of the Bill. One of these savings banks has 48,000 depositors. How are all the hooks of the depositors to be verified and inspected in two days? I have been informed that the ordinary staff of a savings bank cannot, even if doubled, inspect and verify more than 500 in a day: they get through 1,000 in two days. What is to be done with the remainder? But the right hon. Gentleman may say let the hanks increase their staff of clerks. Well, but that will occasion increased expense, and by consequence diminish the interest of the depositors. Is it wise to do so? When, in 1844, an additional expense was imposed upon those savings hanks of 11s. in the 100l. it caused a sensible falling-off in the depositors, who, seeing the interest lessened, invested their money in other modes, or kept it. It is all very well for the Government to say that they can carry this measure—they will he supported by their sleeping myrmidons who, aroused from sleep, and knowing nothing about the Bill, and hearing nothing of the discussion, instinctively find their way into the same lobby with the Government. Well, but then there will be another disadvantage entailed upon depositors in those banks by this meddling legislation—the fees will be increased. With the new "radical reform" of the Chancellor of the Exchequer will come new rules, which must be paid for. Surely a Government which has proposed so much and which has done so little, can refrain from doing harm, since they cannot do good, and will not press this most discreditable Bill through the House of Commons at the end of August, without necessity, and against the opinions of those best calculated to form a judgment on the subject. I move. Sir, that this Bill be committed this day three months.

MR. MONSELL

understood that the argument of the noble Lord and the hon. Baronet against the Bill was founded upon the want of confidence which any change in the law would produce on the English depositors. Well, then, he could tell them that unless they produced some such Bill as the present, the want of confidence which at present existed with regard to the Irish savings banks would be continued, and the most injurious consequences would follow. He had no objections that it should not extend to England and Scotland, but he entreated the noble Lord not to refuse it to Ireland.

The CHANCELLOR OF THE EXCHEQUER

said, this was another instance of the difficulty of legislation in the present Parliament, for he had imagined that this Bill would excite no opposition, and yet here was the noble Lord charging them with legislating on this subject merely for the sake of extorting additional foes. [Lord G. BENTINCK imputed no sinister motives to the promoters of the Bill. He merely stated, as one of the inconveniences of this legislation, the undoubted fact that additional fees would be charged upon the alteration of the rules that this Bill would render necessary.] He was glad to find he had misunderstood the noble Lord. The sole object of the Bill was to insure a better management of the savings banks, for the benefit of the depositors; and with that view he proposed to make trustees liable to that extent which the hon. Baronet opposite himself proposed in 1844. At present there was no liability of trustees, and consequently no inducement to them to perform their duty. It had been proved that in one or two cases in Ireland they had neglected their duty; and in England, where the noble Lord said there was no complaint, it was a fact that one trustee had paid 7,000l, out of his own pocket to atone for his previous neglect. The hon. Member for Bradford (Colonel Thompson) had said that Government ought to make good the losses of the depositors; but he would ask whether it was fair that the Government should be answerable for the conduct of officers, secretary, treasurer, &c., whom they did not appoint, and over whom they had no control. They were at present under the appointment of the trustees; and the object of the Bill was by rendering these trustees liable for a moderate amount, to give them an inducement to attend to their duty, and yet not to frighten them into resigning their office altogether. Then with regard to the production of the books of the depositors. It had been correctly stated by the hon. Member for Oxfordshire, that the only possible check on the accounts of the savings banks were the books of the depositors. That was perfectly true; and the object of the Bill was to require depositors to produce their books once a year, that they might be compared with the accounts in the bank. He was perfectly aware there would be difficulties in this course; but he thought they might be overcome, and the alternative was that the bank accounts would go without check altogether. He therefore trusted that hon. Members would allow this Bill to go into Committee.

MR. H. A. HERBERT

contended that the Government was alone responsible for the late period at which this measure had come under the consideration of the House, and urged that the depositors who had lost money by the failure of Irish savings banks were entitled to the favourable consideration of Parliament; because, whatever might be the effect of the law rigidly interpreted, 99 persons out of 100 who deposited their money in savings banks, believed that the Government was responsible for the deposits.

MR. BROTHERTON

said, it appeared to him that the opposition to this Bill was founded upon the wish some Gentlemen entertained to vest in local authorities the power of appointing unworthy managers of savings banks, and then to come to Parliament and demand compensation for the losses sustained by depositors on account of their misconduct. It was true that the Government were answerable for the money placed in the savings banks which they received, but they were not answerable for the faults of managers. The savings banks in England were well managed; but the managers of Irish savings banks, instead of transmitting to Government the money which they received, put it into their own pockets. The managers of the Manchester savings bank, in which there were 20,000 depositors, caused the book of every depositor to be exhibited once a year as a precaution against fraud.

MR. REYNOLDS

felt called upon to say that there was not the least ground for the hon. Member for Salford's assertion. It was too much the practice of hon. Members representing English constituencies to look only at the dark side of Irish character. There was scarcely any act, however discreditable, which was not at once imputed to the Irish. The instances of mismanagement which occurred in Ireland, he believed would, on inquiry, be found to have proceeded from local unskilfulness; and he did not conceive that either the present or any other Administration was to blame for the unfortunate events that had occurred.

MR. KEOGH

opposed the Bill because it was calculated to do harm. It was proposed to repeal the 9th George IV., and the provisions it substituted would make trustees resign their trusts, and this would cause a run upon the banks. He recommended that the matter should be left over for further inquiry.

MR. J. A. SMITH

believed that a responsibility limited to the extent of 100l., however small, would be sufficient to secure the attention of the trustees to their duty; and he hoped that those who opposed the Bill would not lightly do what he believed would cause a most serious injury in Ireland.

MR. NEWDEGATE

said, no case had been made out for an interference which would only create alarm.

On the question that the words proposed to be left out stand part of the question, the House divided:—Ayes 49; Noes 21: Majority 28.

List of the AYES.
Abdy, T. N. Parker, J.
Adair, R. A. S. Pinney, W.
Anson, hon. Col. Price, Sir R.
Bellew, R. M. Raphael, A.
Berkeley, hon. Capt. Reynolds, J.
Berkeley, hon. H. F. Rich, H.
Bernal, R. Romilly, Sir J.
Bowring, Dr. Sheil, rt. hon. R. L.
Boyle, hon. Col. Somerville, rt. hn. Sir W.
Craig, W. G. Spearman, H. J.
Douglas, Sir C. E. Stanton, W. H.
Dundas, Adm. Stuart, Lord D.
Dunne, F. P. Talfourd, Serj.
Ebrington, Visct. Tancred, H. W.
Grey, R. W. Tenison, E. K.
Hawes, B. Tufnell, H.
Hayter, W. G. Ward, H. G.
Henry, A. Watkins, Col.
Hill, Lord M. Williams, J.
Hobhouse, rt. hon. Sir J. Wilson, J.
Mitchell, T. A. Wilson, M.
Monsell, W. Wood, rt. hon. Sir C.
Morpeth, Visct. Wyld, J.
Morris, D. TELLERS.
Paget, Lord C. Brotherton, J.
Palmerston, Visct. Smith, J. A.
List of the NOES.
Anstey, T. C. Newdegate, C. N.
Clay, J. O'Connor, F.
Currie, H. Renton, G. C.
Dodd, G. Sibthorp, Col.
Goring, C. Spooner, R.
Henley, J. W. Thompson, Col.
Herbert, H. A. Urquhart, D.
Hobhouse, T. B. Vesey, hon. T.
Keogh, W. Wodehouse, E.
Lacy, H. C. TELLERS.
Mullings, J. R. Bentinck, Lord G.
Muntz, G. F. Willoughby, Sir H.

House in Committee.

On Clause 7,

MR. WODEHOUSE

moved that the operation of the Bill be limited to Ireland, and that the words "Great Britain" be left out of the clause.

The Committee divided on the question that the words stand part of the clause:—Ayes 30; Noes 11: Majority 19.

List of the AYES.
Abdy, T. N. Rich, H.
Adair, R. A. S. Romilly, Sir J.
Brotherton, J. Sheil, rt. hon. R. L.
Buller, C. Smith, J. A.
Craig, W. G. Somerville, rt. hn. Sir W.
Dundas, A. Stanton, W. H.
Ebrington, Visct. Tancred, H. W.
Grey, R. W. Thompson, Col.
Hawes, B. Williams, J.
Hobhouse, rt. hon. Sir J. Wilson, J.
Mitchell, T. A. Wilson, M.
Morpeth, Visct. Wood, rt. hon. Sir C.
Palmerston, Visct. Wyld, J.
Parker, J.
Price, Sir R. TELLERS.
Raphael, A. Tufnell, H.
Reynolds, J. Bellew, R. M.
List of the NOES.
Anstey, T. C. Spooner, R.
Bentinck, Lord G. Tenison, E. K.
Henley, J. W. Urquhart, D.
Herbert, H. A. Willoughby, Sir H.
Keogh, W. TELLERS.
Mullings, J. R. Newdegate, C. N.
Renton, J. C. Wodehouse, E.

House resumed.

House adjourned at half-past Three o'clock.