SECOND READING. (Hansard, 12 February 1861)

§ LORD MONTEAGLE

said, that their Lordships were aware that the savings-bank system, established in 1817, had progressed year by year until it had reached enormous magnitude, the amount of deposits extending to £40,000,000. Before 1817 such banks were entirely voluntary in their institution and character, but in that year Parliament thought it unwise to allow them to remain without Government connection, and Parliamentary organization. They were, therefore, required to conform to certain rules for the safety of depositors, and various Acts had since been 329 passed for their regulation. The Acts, however, had produced a very complicated state of law, which he hoped to see revised and amended in the present Session. Of late years, however, banks had been established altogether exempted from the salutary safeguards required by Parliament for the management and control of the original institutions; for there was no necessity imposed upon them of investing their deposits in Government securities, of having their rules certified, or making returns to Parliament; nevertheless, they assumed the name of savings banks, and deposits were made in them under the impression that they were real savings banks established in conformity with the law. So great was their number that in Glasgow alone, in 1857, there were sixteen of these spurious banks established entirely free from the operation of all the enactments which were calculated to ensure the security of deposits made in them. In 1858 a Select Committee of the other House, presided over by Mr. Sotheron Estcourt, a Gentleman perfectly familiar with this subject, inquired into the subject. Sir Alexander Spearman stated before the Committee that it was essential that measures should be adopted for preventing persons being deceived by the pretensions of these so-called "Savings Banks," and the Committee came to the conclusion that no banking concerns should be permitted to assume the name of savings banks except such as had their rules duly certified. He proposed to meet the abuse in question by enacting that if any person should Establish, continue, or carry on any bank, institution, or society of whatsoever kind for receipt of deposits of money at interest or otherwise, assuming or using for such bank, institution, or society, the name, title, or description of a savings bank of whatsoever kind, except in respect of savings banks established under Acts in force for the creation, support, and management thereof, or in respect of any penny savings bank by which the moneys are deposited in any savings banks established under any Act or Acts of Parliament relating thereto, such person or persons shall be held guilty of a misdemeanour. He had endeavoured last year to accomplish the same object, there being then a Savings' Banks Bill going through Parliament; but the noble Earl (Earl Granville) who had charge of that Bill said that, though he had nothing to urge against the clause, but that it was not consistent with the scope and character of the measure then being discussed, and it could not, therefore be adopted. The system was no longer applicable. He (Lord Monteagle) now understood 330 that in a Bill on the subject of Post-office savings banks lately introduced in the other House a similar clause was inserted. He was ignorant of the intentions of the Government in this respect when he brought forward this Bill; but the Goverment measure was a complicated one, and its provisions might give rise to delay, or they might not meet the assent of Parliament, so that he should persevere with his own proposal until he saw whether the Government were successful in carrying theirs. Until security had been obtained against the evil attendant on these Fictitious Savings Banks, and a real remedy provided for it, he should not cease to urge upon their Lordships, respectfully but firmly, the necessity of adopting some measure like the present. He now moved the second reading of this Bill. He did not propose to go into Committee on the Bill for some time, because the noble Lord the Chairman of Committees, who had always taken a very great interest in savings banks, was likely to be absent from town. He would, therefore, propose to defer going into Committee on the Bill for some weeks.