§ The CHANCELLOR OF THE EXCHEQUER
rose, in pursuance of the notice he had given, to move for leave to introduce a Bill to amend the laws relating to savings banks. He was very sorry that any delay had taken place in the introduction of this Bill. He had given notice as early as the first night of the Session of his intention to bring the subject under the consideration of the House; but the indisposition under which he had laboured, and the state of the public business, had hitherto prevented him from bringing it forward. 895 Any one who had turned his attention to the subject would agree in its exceeding importance, and would agree in the difficulty of effecting any alteration of the laws by which these institutions were at present regulated. He believed that few hon. Gentlemen were fully aware of the mode in which the system had grown up from small beginnings to its present dimensions—a remarkable growth, when it was remembered that it was not much more than forty years ago since the first voluntary associations were formed for the purpose of affording to the poor the means of depositing their savings, and paying interest thereon. Now, that the amount of the deposits had reached the sum of 28,000,000l., it was not surprising that new regulations should be called for, or that a scheme which had answered when the transactions of these establishments were of small amount, should be found to require further adjustment when they had attained their present gigantic extent. Much of the necessity of legislation arose, in his opinion, from these causes; but there was another circumstance which he thought had contributed to the same result in these institutions, and he believed that the same cause operated in all voluntary establishments. Although, in the formation of benevolent and other institutions like these, the zeal of philanthropic individuals might be successful in founding and starting the infant institution, he was afraid that after the warmth of this first feeling had cooled, parties were not willing to give that constant and regular attention to the working of the system which was indispensably necessary to its continued usefulness and prosperity. He must observe, with regard to all persons who had taken part in the management of the affairs of those institutions, that however active and energetic might have been the zeal of individuals in forming the establishment, it was exceedingly difficult to ensure their regular attention to its concerns for any length of time. Without being disposed to attribute blame to individual trustees for the management of savings banks—for if he were to do that, he believed he should himself come in for a fair share of it—he was afraid that, with some exceptions, the general practice was, that no very regular attendance was given, and that the affairs of the bank were left very much to the management of the secretary, treasurer, clerk, or by whatever other name the person left in charge was called, and 896 that salutary check was not exercised by the trustees or the manager, which was perfectly indispensable to the proper management of the establishment. For example, in the recent lamentable case at Rochdale, a person of higher character for honour and integrity in the estimation of the whole district than the defaulting manager could not be found; and the case was just the same with reference to the defaulter at Scarborough. Even in some establishments which had the reputation of being by no means ill-managed, he had reason to believe that the trustees had been in the habit of signing blank forms and even checks to be filled up by the acting manager, at his sole discretion; and, in point of fact, the check exercised according to the existing practice was much more nominal than real. He proposed, at a later period of the evening, to move the reappointment of the Committee which sat last Session, whose first business would be to receive a report on the affairs of the bank of Dublin. The question now before them was, however, only as to a prospective measure. He wished entirely to avoid any reference to the past, except in as far as experience of the past was a guide in future legislation; and, if he might be permitted to make such a suggestion, he thought it would only encumber the discussion with respect to the future, if they went at length into past transactions. This was a question in which he was quite convinced the House would take the most benevolent interest, as involving the improvement of the poorer classes. He would refer very shortly to the history and progress of these societies; for those who had not attended to their past history were hardly aware of their real nature, and how they had grown up to their present dimensions. It was not much more than thirty years ago since these societies had been recognised by the Legislature, and little more than forty years ago since they were formed. He believed the first society of this kind, a benelent institution not differing much from the savings banks, was formed at Wendover, in 1799; in 1804 another was formed at Tottenham; in 1808 another at Bath; and in 1810 another was established in Dumfries-shire. Till that year there were not, he believed, half a dozen institutions bearing the character of the present savings banks, or at all resembling them. The society established at Tottenham offered a fair specimen of these institutions. In that case six benevolent individuals undertook 897 to receive the savings of the labouring classes, and to pay 5 per cent for them, each person being responsible for 100l.; if more were deposited than 600l., they were to add another trustee for every 100l. They appointed the trustees as they pleased, and invested the deposits as they pleased, on condition of paying the interest on them. In 1817, when the first legislation on the subject took place, there had been formed by voluntary associations by benevolent persons for this purpose not less than seventy societies in England, four in Wales, and four in Ireland. In 1817 a Bill was passed, of which the object was to prohibit the trustees from receiving any profits, and to allow the investment of the deposits in the public funds, up to that time the parties responsible for the safe custody of these either employed the money themselves, or put it in a bank, or invested it exactly as they pleased, under no security whatever, except the credit of the trustees and their honourable dealing. In 1817, they were for the first time allowed to deposit their money in the public funds; that was. Government undertook to receive the money they deposited, to be responsible for such money as was transmitted to the Commissioners for the Reduction of the National Debt, and to allow certain interest thereon. In 1824 that system was changed, and it was rendered imperative on the trustees to transmit to the Commissioners for the Reduction of the National Debt the money which they received for the purpose of investment in the public funds, and the trustees were debarred from placing it out at interest elsewhere. From that time, therefore, the Government became responsible for all the money transmitted to them, but for nothing else; a certain rate of interest was paid to the trustees, a certain charge deducted for management, and the remainder was paid to the depositors. In 1828 the preceding Acts were consolidated into one statute; it was then enacted that the rules should be laid before a certain barrister appointed for the purpose, who was to examine them, and certify that they were in conformity with the law (they were subjected also, at that time, to the revision of justices of the peace at the quarter-sessions); the trustees were exempted from liability except for their own acts or deeds, and only where guilty of wilful neglect or fraud. To show to what extent the investment was voluntary, a clause was introduced to enable the trustees of the savings 898 banks to receive from any depositors any sum of money to be invested in any other way the depositors chose, provided it were not contrary to law. The amount of deposits, which in the first instance had been perfectly ad libitum, was reduced, and the rate of interest also reduced. In 1844 another Act was passed, which exempted the trustees from all liability whatever, and again reduced the rate of interest. The whole duties and powers, therefore, of the Government, or rather of the National Debt Commissioners, consisted at present in this—that before any savings bank could be established, the rules must be transmitted to a barrister appointed for the purpose, who certified that they were in conformity with the existing law; the trustees being perfectly competent to make what rules they pleased, provided they were in conformity with law. It was the duty of the National Debt Commissioners to receive any sums which might be transmitted to them, to invest them in the funds, to pay interest thereon, and to pay again, upon certain documents transmitted by the trustees, the sums for which they were called upon. Monthly accounts were transmitted, in point of fact, but by law annual accounts only were required to be transmitted, and they were checked by the books of the Commissioners of the National Debt, from which the moneys invested with them could be ascertained. The Commissioners had the power of closing the accounts of the bank, provided the trustees did not observe the directions which the Act required; they could refuse to receive more moneys from them, but they had no power whatsoever of saying that the depositors should deposit no more money with them. With respect to all other matters, the trustees of the savings banks had complete authority and control; they appointed and controlled all the officers. The Commissioners of the National Debt had no power whatsoever to interfere with their management of the bank. Those institutions had been from the first voluntary associations, conducted by persons who acted gratuitously for the benefit of their poor neighbours, and the principle on which the Commissioners had acted from the first formation of the society up to the present time was to interfere as little as possible with persons placed in that situation, unless they appeared to be acting contrary to law; and as they had voluntarily undertaken duties for the benefit of the poor, it was thought right to leave them as much 899 discretion as was consistent with the requirements of the law. As he had said, considerable evils had arisen from the undefined position of the law; and he trusted that, by the Bill which he was about to introduce, the greater part at least of these evils would be met. The first question was that which had been raised in the recent discussions upon this subject, and in various applications made to himself as chief of the National Debt Commissioners relating to the responsibility of Government, whether the trustees were responsible for the losses which might be incurred through the neglect of themselves or their officers. The Government from the year 1817 had made themselves responsible for the safe custody of such moneys as were transmitted to the National Debt Commissioners, and no more. The Government could not make themselves responsible, and had never made themselves responsible, for any losses which might be incurred by the misconduct or neglect of parties over whom they had no control. In 1828 the liability of the trustees was by Act of Parliament confined to instances of neglect or omission on their part; and by the Act of 1844, their liabity was entirely removed. He was bound to say that he thought this was the great defect of the law. Hon. Gentlemen seemed entirely to have lost sight of the origin of these bodies, which were at first voluntary associations not connected with the Government at all, and only so far connected with Government, even to the present moment, in as far as Government were appointed to be their bankers, and be responsible for such sums as they had received. Up to very lately there was no instance whatever of an application having been made to Government to make good any loss which might have occurred from the failure of savings banks. With the exception of the case of the Caernarvon Bank, in 1824, the whole of such losses, or very nearly so, had been made good by the trustees. He believed that in the Caernarvon case the lord lieutenant of the county came forward, and paid the small depositors, but the large ones lost considerably. In that case no application was made to Government, nor had such a thing been heard of until within the last two years. Till the application had been made on the part of the three Irish savings banks, nobody ever advanced the doctrine that Government was bound to make good the losses incurred by the conduct of persons whom they had not appointed, 900 and could not control. He did not think it was fair or reasonable to say that Government should be responsible for losses incurred through the misconduct of persons whom they did not appoint; and if he were to place on Government the responsibility of appointing the officers, it must be obvious that they would cease to bear the character of benevolent institutions founded by the rich for the benefit of their poorer neighbours, and become mere Government establishments. It would be impossible for the Government to decide whether a savings bank should be established in a particular locality or not. That was a matter on which individuals residing in the place could best come to a correct decision, and by depriving them of the power of determining this and similar points, the House would be destroying one of the most valuable features of these institutions, namely, their local management, and rendering them altogether Government institutions. He thought, therefore, that without impairing this valuable principle, he (the Chancellor of the Exchequer) should meet the fair necessities of the case if he took on the Government pretty nearly the whole responsibility as regarded the receipt and payment of money. He found that in many savings banks throughout the country the practice existed of appointing a neighbouring banker, as treasurer to the institution, whose duty it was to attend during the hours of business, and to receive and pay all money passing through the savings bank. Now, the course which he proposed was, to alter the enactment that the treasurer shall receive no emolument, and to invest the appointment of treasurer of the savings bank in the Commissioners for the Reduction of the National Debt. They might appoint the existing treasurer, or any one else. If they appointed a banker, he would either have to attend himself, or to send a clerk to be present at the appointed hours on which the savings bank would be open, and all money should be paid directly to him by the depositors, or by him to the depositors, and the receipt of any money by any other person, or at any other house, should be illegal. The truth was, that nearly all the fraud and all the loss had occurred through the actuary or secretary receiving money from depositors irregularly, sometimes at his own house and out of the ordinary hours, and contrary to the proper rules and regulations, and this, he was sorry to say, with the knowledge, though he would not state with the 901 approval, of the trustees. He believed that if they put an end to that practice, and also to the system of allowing any money to pass through other hands than those of the treasurer, they would, in a very great degree, guard against the possibility of fraud. The better to carry out this object, he proposed to make it a misdemeanor in any officer of the savings bank, other than the treasurer, to receive money from any person proposing to deposit it in that savings bank. He found on inquiry that there were in point of fact very few towns in England having savings banks wherein other banks did not exist, and in those cases where a savings bank was in a town so small as to be unprovided with a bank, he believed there would be practically no difficulty found in procuring some of the nearest banks in other places to accept the office of treasurer. [An Hon. MEMBER: Must the treasurer be a banker?] He did not mean that the treasurer should necessarily be a banker, and in many cases he believed that very little difficulty would be experienced in finding such a person to take the office voluntarily, without putting the country to any charge, and when such assistance should be offered; they (the Government) would be happy to avail themselves of it; but should it not be offered, they took power in the Bill of appointing a paid treasurer in the way he had stated. In many country towns, the country banker was the treasurer of the savings bank; and he thought that this practice might generally be followed if there was not any person willing to act as treasurer. The appointment of the treasurer he proposed should be given to the Commissioners for the Reduction of the National Debt; and in that case, of course, the Government should be responsible for all the money paid to the treasurer. While placing this responsibility on the Government, he proposed at the same time to repeal that clause of the Act of 1844 which entirely did away with the responsibility of the trustees. He thought the trustees ought to be held responsible for any neglect or act of their own, as they had been under the Act of 1828. Now, the first clause provided that the treasurer should be appointed in the manner he had described; that he should attend during the hours on which the savings bank was appointed to be open—that he should receive personally all moneys paid in by depositors, and pay away all money withdrawn by depositors—that he should send up every day to the 902 Commissioners for the Reduction of the National Debt, an account of the transactions, and not at the end of every month, or every year as formerly, and also that any officer of the institution except the treasurer receiving money should be guilty of a misdemeanor. The next object to be kept in view was an efficient audit of the accounts. He proposed that the trustees of each savings bank should appoint an auditor, and that the passbooks should be brought in annually for examination. The only really effective check that could be kept on the accounts was by a comparison of the depositors' pass-books with the ledger. When he first proposed introducing this Bill, he was told that it would be nearly impossible, particularly in seaport towns, that an examination of the books could take place, in consequence of the frequent absence of a large proportion of the depositors. The production of the books for purposes of inquiry was provided for in the Act of 1844, in Ireland; and it was not extraordinary if he should now seek to make the arrangement more general. But he found that practically there was no difficulty in instituting such an extent of comparison as would be sufficient to test the general accuracy of the accounts, even in the case of seaport towns. Two of these cases had recently come under his notice. He found that in the Cork savings bank, which was a remarkably well-managed one, at a recent examination of the accounts, 6,623 pass-books had been examined, and there were only 1,164 pass-books that had not been brought in for examination. Thus at this large seaport town five-sixths of the depositors came forward with their books; and as no error had been discovered in that number, the probability was that no material error could have taken place. The other case was the Portsmouth savings bank. Here the whole number of pass-books was 4,236, and of this number 3,753 had been brought in and compared, leaving only 483 that had not been produced for examination. This was a very strong case, as it showed that in a great seaport town more than six-sevenths of the depositors' pass-books had been produced when an examination was called for. Again, in the Macclesfield savings bank, since November last, 3,769 pass-books had been examined, and only 88 books remained, which had not been brought in for examination. He believed, therefore, that this comparison could be carried out under proper arrangements. 903 so that there would be no great difficulty hi having such an examination of the books as would practically ensure the detection of any material fraud. He held in his hand a sheet issued by the trustees of the Barnsley savings bank, in which the number of each depositor's book was set forth, with the balance standing in the accounts to his name. Every depositor could therefore see at a glance whether his own balance was correct or not, without any necessity being created for a publication of the depositors' names, to which a strong objection seemed to be entertained. This, he thought, was an excellent arrangement, which might be further carried out. He proposed to take a power to the Commissioners for the Reduction of the National Debt, to send down, should they see occasion for so doing, an inspector to test the accuracy of the accounts of any particular bank, by an examination of such a number of the pass-books with the ledger as might be brought in to him for the purpose. He believed that the mode which he proposed for receiving and paying deposits, together with those other precautions to which he had referred, would provide against the possibility of any fraud taking place, or at least any fraud to a serious extent, while the depositors would be protected by the responsibility of the Government being extended. The next clause was intended for the purpose of providing against any further loss being sustained by the Government, on account of savings banks. He believed that at the original formation of these institutions it never was intended that any loss should fall on the Government or the country, through their working. It was intended that the rate of interest allowed in them should be such as the public funds would allow the Government to pay, but that no loss was to be incurred. The reverse of this, however, had been the fact; from a higher rate of interest being allowed to savings banks than the interest on the amount of the deposits invested in the public funds enabled the Commissioners for the Reduction of the National Debt to pay. In 1817 the rate of interest allowed was 4l. 11s. 3d. per cent; in 1838, it was fixed at 3l. 16s.; and in 1844, at 3l. 5s. The result of these arrangements was a considerable loss to the Government. In like manner, a loss resulted to Government from the necessity which existed of carrying out the arrangement—as he thought a very proper one— 904 of repaying to the depositor the precise sum which he had deposited, no matter what the prices of the public funds might be. Thus, if the amount were invested when the funds were at 99, and if they had to be sold out when the funds were at 80, it was obvious that the Government must lose considerably by the transaction. Thus there were two kinds of loss—first, the loss on capital; and, secondly, the loss on interest. It had been proposed by some parties that the Government should act merely as a broker, to enable parties to invest small sums in the funds, which should then be subject to all the fluctuations that took place in the price of the funds. But, from all the communications that had reached him on this subject, he was inclined to believe that one of the great inducements which persons of small means had to deposit their savings in these institutions, was the certainty of getting the entire sum back again; and that they looked to the amount of interest as a matter of very secondary consideration. He believed it would be a source of great anxiety to them; and a subject of constant complaint and discouragement, if the investments of these small depositors were to be liable to the fluctuations which took place in the public funds. He did not, therefore, propose to alter the law in this respect, but what he should propose was to limit still further the amount of the deposits. He did this because he did not consider it at all necessary to extend to the large depositors the advantages of these institutions. It was remarkable to how large an extent the larger depositors had taken advantage of this power to withdraw the full amount deposited, in order to invest it more profitably for themselves while the funds were low. He held in his hand a return for the year included between November, 1846, and November, 1847, a year when, as hon. Gentlemen would remember, the funds had fallen very low, and afforded strong temptations for investment. It was remarkable also that while the depression in the funds was at its height, in October, 1847, the sales were all in very large sums, while the purchases were almost invariably in very small amounts, showing that the public thought it a good time to come in and buy; and no doubt a great number of the depositors of the larger amounts in savings banks had withdrawn their deposits at that period with a view to their more profitable investments in the funds. In the year, 905 between November, 1846, and November, 1847, the total number of depositors in the savings banks had decreased by upwards of 12,000. But the whole of this decrease was in the larger sums, because the number of depositors under 20l. actually increased more than 12,000; so that the number of depositors in sums above 20l. must have actually decreased 24,000. The whole increase was in the poorer class of depositors, and the decrease in the higher class. He proposed, therefore, to limit the amount of deposits to be received from any one depositor to 100l. He had been urged to limit the amount still more; but, on the whole, he thought that 100l. was the best limit that could be fixed. He proposed, when the deposits amounted to 100l., to give the parties facilities for investing it in the funds, should they so think proper. When the deposits reached 100l., he proposed that the interest should cease; but they would, if the parties wished it, invest the amount in the funds, and receive the dividends afterwards and pay it to them, or else give them a power of attorney to allow another party to receive it for them. The depositors would be thus converted, free of expense, into fundholders, and they could get a power of attorney, either to sell the amount, or to enable another person to receive the interest for them. He did not propose to compel any existing depositor to take advantage of these provisions. A strong confirmation of these views, he found contained in a letter which had been addressed to him by a gentleman who had been treasurer for fourteen years, and manager for thirty years of the Croydon savings bank. He had also received various other letters from persons in all parts of the country; but he should not detain the House with reading any, except the letter to which he had first alluded. This gentleman stated that—I have had occasion to remark that the chief inducement to deposit money by those for whom savings banks are intended, consists in having a safe place for deposit, and that the amount of interest for the most part forms but a secondary consideration; whereas those persons whose means are greater, and who do not actually require savings banks, use them to suit their convenience when the fund" are high, and take their money out of the savings bank to invest in the funds when low, just at the time that the withdrawal from the savings bank is attended with loss to the country. This cause operated far more extensively in our bank in 1847 and 1848 in reducing our capital than the stagnation of trade did. 20l. would be quite enough for a depositor to be allowed 906 to be put into the hank in one year, and when the sum invested reaches 100l. there is no necessity to allow further deposits to be made. Our secretaries are secretaries alone; their province is book-keeping; they have nothing to do with money; and no officer of the bank is permitted to transact business but at the bank, and in banking hours, so far as money is in the question; and thus the accounts are confined to the secretary, trustees, and manager, and the money to the treasurer, trustees, and manager.The proposal which he submitted was, it would be seen, very much the same as that suggested in the letter, as he proposed a separate management altogether with regard to the office of treasurer, and that the receipt and payment of all money should be exclusively confined to that officer. He begged to remind the House that the funds with which they were dealing were of no trifling amount. It appeared that the gross amount of interest paid since the establishment of savings banks, in 1817, to the Commissioners for the Reduction of the National Debt, on account of deposits invested by them, was 18,014,000l., while the total amount of interest paid and credited by them to depositors, was 20,455,000l., leaving a deficit of 2,441,000l. The annual excess of interest paid to savings banks above that received by the Commissioners was 42,670l. per annum. He did not consider that this loss should be continued, and he proposed, therefore, that the rate of interest paid by the Government on these deposits should be reduced from 3l. 5s. per cent to 3l. per cent. and that the maximum amount of interest paid to depositors should be fixed at 2l. 15s. per cent. The loss would be very small indeed to each depositor. The present average rate of interest paid to depositors was 2l. 18s. 4d. per each 100l., He proposed, therefore, a diminution of 3s. 1d. per each 100l., which was equivalent to 4d. a year on 10l., 8d. a year on 20l., 1s. 8d. a year on 50l., and so on. This would be a very small consideration to each depositor, while, at the same time, the saving on the whole would protect the country from loss, and would also enable them to meet the payment to the treasurers and the other expenses of management. The arrangement would, of course, on the other hand, relieve the savings banks to a certain extent from their expenses of management. It had frequently been said in debate that, besides the loss on interest, the savings bank system would entail a great loss upon the country; but that would depend upon the amount the stock could be sold for. The question would not arise till all the money 907 deposited in savings banks was required to be paid off, and the books closed; which was not a very probable event. Even then, it depended on the price of the funds at the time. If the whole of the banks were wound up when the funds were low, there might be a considerable loss; but if the funds were high, there would be no loss to the country at all. He believed he had now gone through the principal points with regard to this portion of his plan, namely, the conferring on the Commissioners for the Reduction of the National Debt the power to appoint the treasurers, the payment of all money to and by the treasurer alone, the limitation of the deposits to 100l, the power of converting deposits to that amount into stock, the reduction of the interest to be paid by Government to 3l. per cent. and that to the depositors to 2l. 15s. per cent. He next came to the question of friendly societies. With regard to these societies, he proposed that no further money should be invested by them directly with the Commissioners for the Reduction of the National Debt, except so much as should be received on account of insurances entered into previously to the passing of the Act. Hon. Gentlemen might be aware that these societies were formed for the purpose of granting assurances to parties; and the rates at which the assurances were given, depended on the rate of interest which they themselves received. Now, it might be unjust to make any alteration with regard to the old assurances, but he proposed that, in the ease of new assurances, the investments should only take place through the means of the savings banks, as had been the rule for some time as to all new societies. The loss to the public on the existing societies was about 20,000l. a year; but as the faith of the Government might be considered as pledged to the arrangement entered into, it would be an injustice if any alteration were now made, as far as the insurances already contracted for by the old societies. In the next place, he proposed to limit the privilege of investing in the name of trustees. That privilege had been grossly abused by parties who had invested money that was practically their own in the names of children and others. He proposed, therefore, that in future no person should be allowed to invest money as a trustee except on behalf of parties afflicted with lunacy, idiocy, or unsoundness of mind. Money could, of course, be invested on behalf of 908 minors, but then it should be in the name of the minor, and not in the name of the trustee. The only other main provision which he should propose was the extension of a power on which great stress was laid by his hon. Friend behind him, the Member for Stroud, and others, namely, the power of granting annuities. At present, under the Act of 1833, a person could purchase an annuity not under 4l., and if he died within a fixed time the money was to be returned. But the rate of premium was so high that no great amount of annuities had been applied for or granted under that Act. He did not propose to disturb the existing arrangements, but he wished to give power under other conditions with regard to new arrangements. He did not intend to continue in these cases the power of purchasing by means of instalments; but, on the other hand, he proposed to reduce the amount of the annuity to be purchased to 1l. The mode in which he hoped his proposal would work was, that parties would accumulate such a sum of money in the savings bank as would enable them to purchase an annuity of 1l. at least, which would thus be secured to them, and then they might go on accumulating more money in the savings bank, until they could purchase another 1l. annuity, and so on, until the whole amount reached the limit of 30l. Another object which it was most desirable to effect, but which he had for a long time thought almost impossible, was to provide for the payment of sums of money in case of death. In cases where a person desired to purchase the right of leaving a sum of money to his relatives after his death, a great difficulty existed from the danger of those deferred annuities being purchased on bad lives, and its being almost impossible for the Government to obtain any accurate knowledge as to the soundness of the health of the party purchasing. On this point, also, he hoped the details which would be found in the Bill, would provide a practical remedy. He proposed also, if a party wished, instead of having a sum payable at death, to provide an annuity to be paid to his children after death, to give power to have such a fixed payment converted into an annuity at death. He did not think it necessary to trouble the House with further details, which the Bill he proposed to bring in would supply; and, in the meantime, he would be happy to furnish information on all points that he might not have already sufficiently explained. But, having already trespassed 909 upon their attention so long, he did not think it necessary now to go into further detail upon these points. He believed that, according to all the information he had received, the clauses which he had drawn in the Bill would be found to meet most of the difficulties which had been put to him; and he had only to say, that on a question like this, which involved no party feeling, and where he was convinced that every Member was actuated by an anxious desire to pro mote the interests of those for whose benefits these banks were instituted, he relied upon receiving the aid and assistance of every Gentleman in the House; and he could assure them that such assistance he would be most happy to receive, in order to promote this great national interest—the interest of that class of society to whom, he believed, savings banks were invaluable, and the system of annuities which, if possible, were more invaluable still. He hoped he had done his best to meet the difficulties which had already occurred with regard to these institutions; and he would only again say, that he should be most happy to receive suggestions from any quarter, in order to render this Bill as perfect as possible, in order to promote the interest of that class of society whose interest he was sure every Gentleman had sincerely at heart.
§ MR. HUME
said, it was not his intention then to follow the right hon. Gentleman through all the details of this measure, the more proper time for which would be when the Bill was printed and brought before them; but there were one or two points which he wished to bring under the notice of the House. Having directed his attention for the last thirty years to the question of savings banks, and having for the last ten or twelve years called the attention of Government to the faulty system on which they were instituted, by which loss accrued to the Government, and a risk to the individual depositors, he was not at all surprised at what had lately taken place. He had very great doubts whether the right hon. Gentleman would be able to carry out his mixed plan, which he had now proposed. He thought the public had a right to complain of the Government in this matter, because it was always under stood that the Government were pledged to the depositors, and thus the public were deluded. ["Hear, hear!"] He said deliberately, the public were deluded, because they had been led to believe that their money was safe from the moment it was 910 paid into the bank; whereas it appeared that the Act of Parliament only enabled the Government to receive the money from the trustees, and they were only responsible for that sum which was received. Now, this was a matter which the unfortunate depositors did not know, and they believed that all the money deposited was placed under the control of the Government from the moment it was placed in the bank. It appeared to him that the Government ought to undertake one of two things—either to leave savings banks altogether alone, or else to ensure perfect security to the depositors, which he saw no difficulty in doing. He had always regretted that the Government departed from the course adopted in 1813, on the first institution of savings banks. When the Western Provident Institution, which was the first savings bank of any extent established in the metropolis was commenced, it proceeded on the principle that so soon as the depositor paid 14s. into the bank, the managers were bound to invest it in the funds, and the depositor became proprietor of 1l. in the 3 per cent stocks, which were then selling at 14s. Now, he contended that that was exactly the function which Government should discharge in this matter—that they should undertake for the depositor the trouble of buying in and selling out of the funds, and save him the expense of employing a broker. One reason why he wished that course to be adopted was, to avoid the possibility of loss to the Government; for, as the system was managed at present, the Government lost to a large extent, while the depositors did not gain. The right hon. Gentleman had stated that in the course of the last thirty-two years the Government had paid 2,000,000l. more in interest than they had received. He believed the greater portion of that was spent in the management of the banks, some of which were carried on very extra vagantly, though others were managed very economically. He objected in 1844 to the Act which was passed in that year taking away from the trustees of savings banks the responsibility which was formerly imposed upon them, because the depositors no longer had that security which formerly existed, and which, unfortunately, they still believed did exist. He was glad, therefore, that the right hon. Gentleman proposed to repeal that Act; but he was very anxious to hear what the right hon. Gentleman meant to do with regard to the losses that had been sustained by 911 depositors in the various banks where failures had already occurred. He was a member of the Committee that sat on Irish savings banks, and no man who heard that evidence could doubt that the depositors believed their money was placed in the banks on the security of Government; and he had no doubt that in Rochdale and the other English banks the same feeling existed. But yet none of these cases had been taken up by the Government. In attempting to provide for the future, it appeared to him that the right hon. Gentleman had proceeded altogether on a wrong principle in having a mixed management, and that as they had gone so far as to appoint a treasurer and exact penalties for violation of their arrangements, they had only one step further to take, and appoint a clerk for the management of the bank, and then the institution would be altogether under the control of the Government, who would be responsible to the depositors for the security of their money. He would also call the attention of the right hon. Gentleman to the fact, that in Scotland every depositor of 5l. in the ordinary banks received interest upon his deposit, and could draw it out when he pleased, so that in point of fact all the joint-stock banks in Scotland were savings banks, and were extensively used for that purpose—about 30,000,000l. being invested with them, which formed a fund that enabled these banks to give great accommodation to merchants and commercial men. He did not see why the same sys tem should not be adopted in England, which would relieve the Government of the trouble of interfering with savings banks altogether. He had also strong doubts as to the propriety of the Government becoming insurers. That might have been very necessary at a time when there were no insurers; but now that there were so many, he thought that Government might leave the matter in their hands, if they would only do one thing, which was to take the duty of all life insurances and all arrangements connected with these companies up to the amount of 100l. Such an arrangement would save the Government all further trouble on the question; and the loss to the revenue would not be equal to that which was now caused by the payment of a larger amount of interest than they received. He agreed with the right hon. Gentleman as to the limitation of the sums deposited, and he knew cases in which these savings banks had been taken advantage 912 of by parties for whom they were never intended, in a way that, he was about to say, was quite unworthy of them; but let no man say that anything was unworthy where profit was the object, for he found in all ranks and classes a tendency to avail themselves of the folly of the public. He agreed with the right hon. Gentleman in the desirableness of encouraging amongst the labouring population the habit of saving, for the moment a man had a nest-egg he desired to add to it, and thus habits of prudence and economy were fostered among the mass of the people.
§ SIR H. WILLOUGHBY
was anxious to call the attention of the House to a point which was in fact the main principle by which the new machinery was to be worked. The question he had to put was, who were the parties who were responsible for what had occurred, and for what might occur hereafter? The answer was, the Commissioners of the National Debt, as these were the parties to whom the deposits in savings banks were to be paid. But these Commissioners were all of them high officers of State, and therefore he doubted whether any of them could be responsible for the due carrying out of the Act. The right hon. Gentleman in the chair was one of those Commissioners; the others were the Master of the Rolls, the Chief Baron of the Exchequer, the Accountant General in the Court of Chancery, the Governor and Deputy Governor of the Bank of England, and the right hon. Baronet the Chancellor of the Exchequer; the latter, he believed, being of necessity the only working member of the Commission, though, if the House would reflect for a moment, they would see that cases might arise in which the Chancellor of the Exchequer would be the last person to be entrusted with the management of these funds. A return, which was moved for some time since by the right hon. Gentleman the Member for the university of Cambridge, gave information of a very important character. It appeared that these Commissioners had power to sell the savings bank stock, and to convert it into Exchequer-bills, and viceversâ, and that they had frequently exercised it. He would select from this return two epochs—one from 1833 to 1835, and the other from 1836 to 1840. In the one epoch, he found that 7¼ millions were sold in the Three and Three-and-a-Half per Cent. Stocks, and that 7½ millions were bought. These sales were made for no purposes of the savings banks; they were made entirely 913 for purposes of Government. In the next epoch, Exchequer-hills were at a discount, and 20,000,000 of Exchequer-hills were bought, and 13¼ were sold. There were 2,120 different transactions in the purchase of stock, and 1,300 different transactions in the purchase of Exchequerbills. From the best calculation he had been able to make, he believed that the savings hanks were losers to the extent of 2,000,000l. by these transactions, not including the amount of interest lost by investing in worse security than the funds. Now, he put it to the House whether this was not the real cause of the apparent deficit which the right hon. Gentleman had stated, and therefore he called upon the noble Lord at the head of the Government to consider whether it was not fit that some more efficient working Commissioners should be appointed than those who now held the office. He admitted that the present Government had had nothing to do with these transactions, the latest of which occurred in 1842, and he thought the country owed a great debt of gratitude to the right hon. Gentleman the Chancellor of the Exchequer for having put an end to them. He thought the proposal to reduce the amount of interest would be an extremely disagree able measure; but he did not wish to go into the question of details now, only calling the attention of the Government to the question he had put, whether any efficient check would be put upon the practice of selling and buying stock, which was contrary to the interests of the depositors.
§ MR. S. CRAWFORD
said, he rose to express the great disappointment he felt that the right hon. Gentleman the Chancellor of the Exchequer had given no intimation of the course Government intended to take in the case of the unfortunate depositors. He was deeply interested in the question, as the constituency he represented had sustained a loss of 70,000l. from the dishonesty of the actuary of the Rochdale savings bank. To be sure the trustees, though not legally responsible, had made up the amount of 10s. in the pound among themselves, and it was likely there would be a further amount of 2s. in the pound forthcoming, so that the poor people would at all events get 12s. for every 20s. they had deposited; but still a very deep loss was likely to be sustained, which Government ought to make good. He did not mean to contend there was any legal responsibility on the part of the House or of the Government; but if there ever was 914 a case of moral responsibility, it was afforded by the circumstances under which these depositors had lost their money. The Act of 1844, which had been referred to by the Chancellor of the Exchequer, was unjust, because it took away the responsibility of the trustees, and gave no security in its place; and the very fact of repealing that Act, now proved it never ought to have been passed. The depositors still thought they had the security of the trustees, and behind that again the security of Government. They thought so, because they knew the money was to be paid to the Commissioners for the Reduction of the National Debt—that annual accounts were to be forwarded to the Government by each bank—and that the Government could close any bank if they pleased, and could select arbitrators in case of dispute. It was not extraordinary, then, if poor people who could not turn to Acts of Parliament, should think they had the security of Government. He therefore made a claim on their behalf. It would be a cruel act if the State refused to make good those deficiencies, particularly when it was considered that inaccurate and non-audited accounts had been received from several banks by Government, and that in some cases the arbitrators had made unjust awards between the trustees and depositors. The savings banks ought to be put into the hands of Government, or be abolished altogether. He thought now, as he had always thought, that poor people should never have been induced to place their savings in any establishment where they did not enjoy the advantage of Government security. That they had been so induced was a fact well known to almost every Member of that House. It was well known that nothing was more common for the higher and more educated classes of the community than to use every influence with their poorer brethren to induce them to invest their money in savings banks, the adviser in those cases and the recipient of the advice both believing that every savings bank had the guarantee of Government security. He trusted, then, that the right hon. Gentleman the Chancellor of the Exchequer would take these circumstances into his serious consideration, and not let the poor suffer for following the advice of the rich and the enlightened. Did any one suppose that the law or the Legislature would for one moment sanction the possibility of banks for the rich being maintained with irresponsible trustees? Surely not; then, let them suffer nothing of the 915 sort in the case of banks for the poor—let not the people get hold of the idea that there was one law for the poor, and another for the rich. He hoped, then, that the House and the Government would take the poor into their consideration, and give them that reparation which the justice of the case demanded.
§ MR. W. FAGAN
, independently of having been a member of both Committees on Savings Banks which sat in 1848 and 1849, was from other circumstances familar with the case of the three Irish banks, the failure of which was the principal cause of the Bill which the right hon. Gentleman the Chancellor of the Exchequer had that evening introduced. He (Mr. Fagan) would, therefore, ask the attention of the House while he made a few remarks on the important subject under consideration. The right hon. Gentleman told them that his was a prospective Bill, and he asked them to avoid all allusion to the past. Now he (Mr. Fagan) could not consent to this. He thought very great disappointment would be felt in Ireland that such a Bill should be introduced with reference to the future, without any provision for the unfortunate depositors, whose ruin was caused by the default of the Government. Therefore he felt it his duty to go into the past, notwithstanding the appeal of the Chancellor of the Exchequer; and as he had still hopes that justice would be done these depositors, he thought there would be no more appropriate time than the present to state their case. He would, however, in the first instance refer to the measure submitted to the House by the right hon. Baronet. He differed from his hon. Friend the Member for Montrose in his estimate of the Bill. He believed that consistently with the principle of voluntary association, on which savings banks were founded, there would be the greatest possible amount of security afforded the depositors, provided its provisions were attended to by the public, and vigorously enforced by the Government. But while the depositors might be thus safe, there would be no security for Government so long as the present system of keeping accounts in savings banks was persevered in. Of what use was it appointing auditors, if there was no possible means within a reasonable time of balancing and checking the numerous transactions of the bank? Of what use were auditors if there were no precise system of keeping the interest accounts, or of checking the interest paid 916 with the interest set down in these accounts? The Chancellor of the Exchequer had referred in laudatory terms to the Cork savings bank. Now it was not from any feeling of partiality that he (Mr. Fagan) asserted that all that regularity of which the right hon. Baronet spoke arose from the perfect system of accounts introduced into that bank. These accounts were based on the principle of adding interest in every account, the moment a lodgment was made on the sum so lodged up to the 20th November following, and deducting interest to the same on all sums withdrawn at the date and booking of the withdrawal. Thus there is a check against frauds in the payment of interest—and there is moreover a most extraordinary facility of balancing the accounts. If these accounts numbered ten thousand, and if after the bank closed for business at half past 4 o'clock in the evening, it was necessary to have each account balanced and all checked with the general balance before the next morning, it could be done and had been done under the book system of ac counts, and done too almost mechanically—by two boys just capable of adding pounds, shillings, and pence together. He would, therefore, most earnestly call the attention of the Chancellor of the Exchequer to this admirable system. It was now more than ever his duty to do so. He was going to make the country responsible in a great degree for all moneys deposited in the banks. He ought, therefore, carefully to guard the public exchequer from the frauds inevitable from the present system of keeping interest accounts, and the almost impossibility of auditing within any reasonable time the numerous accounts, particularly in large banks. He would now come to a consideration of the past, which had been already referred to by his hon. Friend the Member for Rochdale. The Chancellor of the Exchequer said that the Government were not responsible for any money they did not receive. Now, it may be that they were not legally responsible, but he agreed with his hon. Friend they were morally so, and what made them doubly so was, that every depositor of every class believed, and the belief was allowed to prevail, that they had Government security for their money. Now that the House might fully understand the nature of the responsibility of the Government for the money abstracted from the depositors, and the case of these unfortunate persons against the Commissioners 917 for the Reduction of the National Debt, he would state how the law stood on this point. And here he would observe that when speaking of these commissioners, he meant the Government, for, as was well observed by the hon. Baronet the Member for Evesham, the Chancellor of the Exchequer, the Finance Minister, was the only acting Commissioner for the Reduction of the National Debt, and therefore when he referred to their acts he should call them the acts of the Government. Now, by the 9th Geo. IV. cap. 92, every savings bank, in the united kingdom was obliged to furnish annual abstracts of its accounts up to the 20th November, to the Government; and if these accounts were not duly furnished within a certain stated period from that date, the law called upon the Government to close the account with that bank; and the 3rd Will. IV. cap. 14, directed them to publish in the Gazette, and local papers of the district where the bank was situated, the name of any bank that neglected to furnish these annual accounts, or that disobeyed the legal orders and directions of the Government. Now, what was the object of these provisions of the law? Clearly, the protection of the depositors. The Government were only security to them for the money it received; therefore, further to secure them from the frauds or negligence of the trustees or officers, these provisions were passed. If it were not for that purpose, it was better they should not have been passed at all. The Government was, therefore, bound by every legal and moral obligation to see the law carried out; and if it neglected to do so, it must be responsible for the consequence. The Act of the 7th and 8th of Victoria, in 1844, removed all liability from the trustees for wilful neglect and default, consequently, made the moral obligation to enforce the remaining protective provisions stronger. Now, let him apply all this to the case of the three banks in Ireland which had failed. He would begin with the Dublin savings bank, where the poor depositors were plundered to the amount of nearly 50,000l, and where at the time of the failure there was not more than 89l. in hand. At November, 1828, there was a surplus fund in the hands of the Government of 3,127l. 7s. 4d. to the credit of the Cuffe-street Dublin savings bank. In 1831 the actuary of that bank absconded with a sum amounting to 32,000l., the property of the depositors. It was in evidence admitted by Mr. Tidd Pratt that 918 this money was taken during the years 1829 and 1830; and, undoubtedly, it must have been principally taken in 1830. Now, will the House believe it? not a single account of any sort whatever was furnished to the Government, as the law directs, in either of the years 1829 or 1830. If the law had been complied with by the Government, no loss at all would have occurred. If the account was closed in 1830, and the bank published in the Gazette and Dublin papers, what was taken that year would have been saved, and possibly the surplus fund of 3,127l. would replace what was abstracted in the first year of these frauds. How was this conduct to be justified? He would show the House by and by the grounds of justification. If these grounds were to protect the national credit at the sacrifice of the depositors, then by every principle of justice, of honour, of common honesty, these sufferers should be recompensed. But this was not all. Let not the House suppose that it was the depositors whoso money was taken by the actuary that were the sufferers. No such thing. The Government decreed that those who had not a single penny in the bank at the time, but who subsequently deposited in the new bank—for it was, in point of fact, a new bank, though called by the I same name and held in the same place—Government decreed that they, and not the old depositors whose money was taken, should be the sufferers, for they, contrary to law, did not close the accounts of the bank; and we have it in evidence that, at the failure of 1847, very few of the depositors previous to 1831 held money in the bank. They were paid by the money of those who, on the faith of the Government, and believing in the solvency of a bank the Government knew to be bankrupt, deposited their bard earnings there. And this was done, though the trustees expressed their willingness to have the bank closed, as he would show by an extract from the statement of those trustees addressed to the Government. In this document they say—Connected as the savings bank system is with the policy of Government for the reduction of the national debt, and considering the great importance of such institutions to the poor and industrious class of the community, the trustees, who at much personal inconvenience have given their gratuitous services to the promotion of these objects, deem it their duty to submit to the Commissioners for the Reduction of the National Debt the fatality which has occurred, and to solicit their advice and assistance. With this view the trustees beg leave to submit that a Commissioner 919 should be appointed to proceed to Dublin, and to be in possession of the assets and other property of the bank, the trustees undertaking, if required, to make a legal assignment to such Commissioner of all property now vested in them under the 9th George IV. c. 92; that such Commissioner should have authority to inquire into the management of the bank, and the cause of the frauds above referred to, and should proceed to remodel, or close altogether, the said bank, as might appear most expedient.Such was the proposition of the trustees, In consequence, Mr. Tidd Pratt proceeded to Dublin. At his suggestion the trustees were induced to alter their plans, and became desirous to keep the bank open; and in February, 1832, Mr. Lundy Foote, on the part of the trustees, addressed Mr. Tidd Pratt a letter, in which occurs the following passage:—We hope that, under all the circumstances of our case, the Commissioners will receive our account as if we were a now bank, furnishing our account for the first time. In fact, you are aware we commenced de novo with new machinery, having discarded some of the old, which was suspected of not working well,Thus was a new bank established to all intents and purposes, with, as it will appear by a minute of the Commissioners he would read—with the sanction of the Government; for the Chancellor of the Exchequer was present when the minute was adopted. He would say that the deposits in Coutts's house may as well be applied to pay the depositors of some bankrupt bank, as that the deposits in this newly-organised establishment in Cuffe-street should have been applied to discharge the claims of those whose money was taken by the actuary. This appeared to be the opinion of the Government at the time the minute was written. It runs thus:—At a Board held the 19th of March, 1832, read a letter from the Trustees of the Savings Bank, at St. Peter's Parish, Dublin, dated 25th February, 1832, enclosing their general account up to 20th of November, 1831, wherein is exhibited an apparent surplus of 27,772l. 12s. 5d., subject to certain outstanding demands. The trustees state that they are unable to produce the general accounts for 1829 and 1830, in consequence of the irregularities—mark the mild and deceptive phraseology of Mr. Dunn, their late registrar, who has absconded and carried off all the documents and papers relating to these years—and therefore they request that the account for 1831 may be allowed to pass without the production of those for 1829 and 1830. Admit the said account—require from the trustees a separate return showing the amount of the outstanding demands upon the new surplus of 27,772l.12s. 5d., so far as the same can be ascertained, also a statement of the payments which are made by them from time to time on account of the same, and let the said apparent surplus of 27,772l. 12s. 5d. 920 at November, 1831, remain on their general account.Now, the Government in admitting this account connived at a deception on the public, for the account was published as the law directs, and on the face it states what is false. It begins thus—" To balance due on 20th Nov. 1830, including interest as per last return." Now there was no such return, and it was a deliberate deception on the part of Government to have allowed such a statement on the face of this account. If, however, no payment was made to the old claimants out of any other fund but the 27,772l., he would admit that there would have been some justification in keeping open the account of this bank; and this he believed was, as he already said, at first the intention of Government, as would appear from the following passage from a letter of Mr. Higham's, dated in 1836, when it was discovered that the trustees had paid 29,344l 7s. 7d. to the old claimants. He says—I am directed to state, that the payment of 1,571l. 15s. 2d. out of the general fund of the institution, will of course make the trustees responsible in case there should be hereafter a deficiency.Notwithstanding this caution, the trustees went on paying the old claimants with the full knowledge of the Government until they had paid away or transferred into new lease books nearly 50,000l to the old claimants—thus paying them with the money of the new depositors. In the mean time, the old trustees who may have been recently relieved of the trust—those who remained in the Government must have known were not security, and, to crown all, lest there should be any doubt of the matter, the Act of 1844 taking away all liability was passed. Now, what were the grounds for this conduct on the part of Government? He would read an extract from the evidence of Mr. Higham, which would explain it all. He was asked by him (Mr. Fagan) the following questions:—Nos. 3082 and 3083. You stated that on grounds of public policy, the account of the Cuffestreet Savings' Bank was kept open.—Answer: Yes. And the result of so keeping open the account has been, that the depositors in that Savings' Bank have been losers to a large amount, that loss being caused by the Government acting on grounds of public policy?—Answer: Yes, it appears to be so.Such is the answer of the Secretary of 921 the Commissioners for the Reduction of the National Debt. If, then, it was public policy seeing that there were twenty-eight millions of deposits depending on the decision—if it were public policy that decided the Government to keep open this bank, and sacrifice the poor depositors of Dublin for the public good, then by every principle of justice, of honesty, of fair play, he called upon that House, on Government, on the Chancellor of the Exchequer, to reimburse these poor people. It is impossible their claims can be rejected. He would not longer dwell on the Dublin case. He left it to the hon. representatives of that city to go more fully into it—and now came to the next case in point of importance. He meant the Killarney one. In this instance, too, the claim on the Government was strong and undeniable. In the first place the failure of that or of the Tralee bank would never have taken place had the Cuffe-street savings bank been advertised in 1831. That would have opened in time the eyes of the depositors. The case of the Killarney bank was this. When the actuary absconded there was owing to the depositors about 36,000l.—of this 20,000l. belonged to the depositors subsequent to 1844, and who had not in consequence the personal security of the wealthy trustees of that bank. There was 16,000l. in the hands of the Commissioners for the Reduction of the National Debt to the credit of the Bank. This 16,000l. was of course made up out of the 20,000l. lodged since 1844, and of course honestly belonged to these new depositors who had not the trustees liable to them. The owners of the 16,000l. lodged before 1844 held the trustees responsible for every farthing, for Mr. Tidd Pratt's award found them guilty of wilful neglect and default. The accounts of this bank were not duly furnished in time according to law, so that Government could at any time have closed its account. Such being the state of facts, how did the Government act? They allowed the trustees to draw from them the 16,000?. This money belonging to the new depositors they applied to pay those to whom they were liable, and the unfortunate new depositors since 1844, who had no security, were thrown off without a farthing except what they obtained from private benevolence. Now, he insisted that the Government ought to have returned this 16,000l., and in this he was supported by one of the most eminent and most dispassionate lawyers in Ireland— 922 Mr. Serjeant Green. His opinion on the law is thus given:—I am of opinion that, under the 46th section of the 9th George IV., chap. 92, the Commissioners for the Reduction of the National Debt had authority, upon being apprised that the trustees of the Savings Bank had neglected to transmit the account required by the Act, or had neglected or refused to obey any orders or directions given by the Commissioners, to close the account of the trustees, and to discontinue keeping any further account with them, and to hold the funds then in their hands until such account should be reopened.The Government, then, in the Killarney case, was as guilty of laches as in the Cuffe-street one, and in justice bound to relieve those unfortunate persons who were now suffering by its neglect and default. As for the Tralee case, which he would leave in the hands of his hon. Friend the Member for Kerry, he would simply state the accounts there were never, for years, duly forwarded according to the law, and that if the law had been carried out and the account closed, there would not have been the desolation and misery which the failure of that bank caused—over 37,000l. having been lost by its defalcation. It appears, further, that by the laches of Mr. Tidd Pratt, the Government official, even the depositors before 1844 could not recover from the trustees—such was the wise decision of the Queen's Bench—such the mess in which the whole was involved. He would, in conclusion, call on the right hon. Gentleman to reconsider this matter. He was now about to provide for the future in his present Bill. Let him, in the Committee upstairs, consent to consider the case of the past, which cannot be called into precedent, and he will thereby be doing but common justice to the industrious poor who lodged their money, thinking they had the Government security; and he was convinced that that House would readily sanction any vote asked for for so just and benevolent a purpose.
§ MR. GROGAN
said, that the hon. Member for Cork had left him very little to say upon the subject of the Cuffe-street savings bank; but he could not help expressing his regret that the right hon. Gentleman the Chancellor of the Exchequer had omitted all allusion to the crying injustice which had been perpetrated upon the unfortunate depositors. He approved highly of the limitation to 100l. as the entire amount of deposits under the proposed Act. But he wished to know whether the present limitation to the amount of 30l. in 923 the course of one year was to be continued?
§ The CHANCELLOR OF THE EXCHEQUER
After the 20th of November next the reduction will take place upon all deposits then in the savings banks.
§ MR. GROGAN
would suggest that a balance sheet ought to be prepared in every bank, to which the depositors could have recourse whenever they pleased. There were some other matters also which might possibly be suggested at a future stage as improvements upon the Bill. But he regretted that the right hon. Gentleman should have altogether omitted to mention who was to compensate the unfortunate individuals who had lost by the savings banks through the fault of the Government. In the case of the Cuffe-street bank, the moment the actuary Dunn was discovered to have left Dublin, the trustees appointed one of their number, Mr. Foote, to go over to London, with full authority to act for them, and to lay the precise condition of their affairs before the Government. He did so, and the Government recommended that course which had been subsequently pursued. The Commissioners admitted that they were aware of the gross irregularities existing in the Cuffe-street bank; yet they took no steps to reform them. They protected Government indeed effectually, but they neglected in the same degree the interests of the public, who trusted to an establishment watched over, as they imagined, by Government officials. If ever there was a case to call for the interference of this House, that of this Dublin bank presented it. What was the result of the extraordinary conduct of the Government? The bank had stopped payment; it was totally bankrupt; and the poor depositors lost their money. The Commissioners, in acting as they had done, violated an Act of Parliament; and when charged with this, their excuse was, that had they acted otherwise—had they shut up the bank, they would have broken another statute. Thus it appeared that if they shrunk from violating one Act of Parliament for the protection of the people, they had no such scruples in regard to 924 violating another in the interest of Government. He put it to the House whether it was right when, by the misconduct of public officers, a great number of poor depositors had been injured, that the Government should come forward and tell them that they (the Government) were not technically liable? Had the depositors been aware that they were trusting their money, not to the security of Government, but to that of irresponsible trustees, they would not have been so ready in coming forward with deposits; but the fact of the Commissioners of the National Debt having continued to recognise the bank as a legal and regular establishment, induced the depositors to believe that their money was safe, and gave them a fair claim to reimbursements at the hands of Government.
§ MR. SLANEY
said, these questions in reference to the losses of depositors by savings banks were of the deepest interest; but he understood there were Committees appointed for the purpose of considering these questions carefully, and a Committee was again to be appointed to take them into consideration; and therefore it seemed to him that the statements made in that House had better be made before this Committee. He earnestly hoped that in the Committee justice would be done to these humble people; and if the question was doubtful, he trusted they would give the benefit of the doubt to the depositors. With respect to the Bill, he believed no measure would be brought forward during this Session of Parliament which would interest so many persons as the Bill brought in that night by his right hon. Friend. The number of persons interested in that matter were numerous beyond example, and they looked for aid and assistance to that House. He thanked his right hon. Friend most gratefully for the attention he had paid to the subject; and if he (Mr. Slaney) made one or two observations which might appear to be in a hostile spirit, he assured his right hon. Friend that he made them in a friendly spirit. His right hon. Friend assumed that the depositors in savings banks were not in a state of security, and he proposed by this Bill to place them in a state of security. Now, he gave him credit for that; but his right hon. Friend, in doing so, made them pay for it. He (Mr. Slaney) regretted that his right hon. Friend thought it his duty to diminish the amount of interest the depositors were to receive, because the amount was to come from the taxpaying public. Now 925 he, for one, would be most willing to pay a small bonus to tempt the savings of these poor people, and he did not think any one would have grumbled to pay their quota, to assist the prudence of these poor persons. But there was another point that he regretted more than the diminishing of their interest. He regretted that his right hon. Friend had thought it right to decrease the amount allowed to be deposited in savings banks. The sum at present allowed was 150l., and he proposed to reduce it to 100l., thus cutting off no less than one-third of the whole investment which they were allowed to have. The statement in support of that proposition was, that these deposits were a great expense to the country; and his hon. Friend, the Member for Montrose, who was a great advocate for economy, said that was the case. But if on the one hand they lost a little by paying to the depositors this interest, they on the other hand gained much more by the forethought and by the prudence which they induced in these persons, by giving them the opportunity of investing their savings. He thought if any one would look at the great advantages which the middle and the higher classes had in investing over those which the poor had, he would see the wisdom of giving to the poor every inducement to invest. As to investment in land, it was utterly impossible, such were the complications of that mode of investment. And investment in the funds was beyond their means. But when he mentioned this, he must say that he gave his right hon. Friend the meed of his gratitude for one provision, which compensated for the other. His right hon. Friend gave to them the power, when they had arrived at 100l. of becoming stock owners. Now that would be of the greatest possible utility, not only to those who were themselves depositors in the savings banks, but it would be a great example to many persons having small means. His right hon. Friend had stated, and most truly, that the parties who made deposits were anxious to receive, not so much their interest, as to receive back the same principal. Now, as far as it went to 100l. they would receive it, but as soon as their deposits reached 100l., they were to receive 100l. stock. Now he begged to ask his right hon. Friend, whether, instead of receiving 100l. stock, they should not have 100l. in Exchequer-bills? He thought that would be of the greatest possible ad vantage; and he must say that if it was 926 practicable to divide Exchequer-bills into smaller amounts, that was, instead of 100l. being the minimum, they could have 50l. Exchequer-bills, it would be a great stimulus to persons investing their money in Government securities. He trusted that his right hon. Friend had taken measures to prevent the necessity of these parties having a power of attorney to receive their dividends, as the expense of such instruments would be a great drawback; and he hoped, also, that means would be taken to give the advantage of the measure to friendly societies.
§ SIR J. JOHNSTONE
wished to remind the House, occupied as it had been with the conduct of the trustees and managers of defaulting savings banks, that with reference to the Scarborough bank, the only omission which could be imputed to the managers and trustees, consisted in their not having sent for the depositors' passbooks, to compare them with the ledger; a precaution which had never, except in very particular cases, been deemed necessary. If in Committee the case of such banks as that of Scarborough were to be considered, as well as those of the Irish banks, he hoped that every exertion would be made to prevent the depositors in the establishment in question from sustaining even the small loss to which at this time they were exposed. At present the trustees and managers did not make good the trifling deficiency, because, as a matter of principle, they did not conceive that it had been occasioned by any mismanagement on their part; but were any imputation thrown upon them of having neglected the least iota of their duty, they would pay up every sixpence of the loss incurred by the depositors. He wished to know from the right hon. the Chancellor of the Exchequer if the treasurer was responsible only for those sums that came into his hands?
§ MR. H. A. HERBERT
said, the right hon. Gentleman the Chancellor of the Exchequer had commenced his speech by calling on hon. Members not to go into any detail with reference to the past, but to confine their observations to the Bill brought before the House, and then proceeded at considerable length to discuss the responsibility resting upon Government. The right hon. Gentleman assumed that none of those allegations that had been made had any foundation in fact, and stated his conviction that hon. Members 927 had no foundation for what they had so often asserted. The hon. Member for Shrewsbury had called on them not to make any remarks on the subject, because the Chancellor of the Exchequer was about to propose a Committee. Now, he (Mr. Herbert) had no faith in the report of the Committee that would be appointed, because he assumed that the right hon. Gentleman was about to reappoint the Committee of last year. He would be the last man in the world to make any insinuations against the Members of that Committee; but look to the mode in which the Committee was appointed. In 1848 the hon. Member for Dublin placed on the Notice-book a Motion for a Committee to inquire into the Irish savings banks. For three months that Motion was postponed. Night after night the Chancellor of the Exchequer requested him to put it off, till at last, tired of waiting, he (Mr. Herbert) gave notice that he would bring forward the subject on a supply night. The moment the Chancellor of the Exchequer found it was in the hands of an hon. Member on that side of the House, he came forward and said he would grant the Committee; but in making that concession the right hon. Gentleman had taken advantage of his (Mr. Herbert's) inexperience in the House, and stipulated that the Government should have the nomination of its Members. When the names of the Committee appeared, many hon. Gentlemen said to him in familiar terms, "You have been done." And the hon. Member for Limerick remonstrated with the right hon. Gentleman on the composition of the Committee, his grounds of objection being that it was a Committee to inquire into Irish savings banks, and there were only three Irish Members upon it. The right hon. Gentleman said—Yes, it was perfectly true that this was an Irish inquiry; but they would have to go into the question of English savings banks also; and he appealed to them whether they would create a discussion which might cause a run upon savings banks. Upon these representations they acceded to the names proposed, and said, "Very well, if that is the case, we will not press for any alteration of the Committee." The Committee of which the right hon. Gentleman himself was chairman, after having taken evidence, made a very short report, which stated that they had not been able to go into the merits of the case, and recommended further inquiry. The following 928 Session, which was last Session, the Lord Mayor of Dublin placed on the Notice-paper a Motion for a Committee. How was that met? It was met by a distinct negative, and upon two nights Her Majesty's Government were in a minority on the appointment of that Committee. And now they were told that the right hon. Gentleman himself intended to move the appointment of a Committee, and he asked the House to wait till one or two o'clock in the morning, when hon. Members were fatigued, and no one could obtain a hearing. Perhaps the right hon. Gentleman would tell them what the Committee was for. They had got the evidence—evidence which, he believed, if it was perused by any independent Member of that House, would prove to him that there was a case made out for payment of those unfortunate people who had lost money by these defalcations. In 1848 the right hon. Gentleman refused to print the evidence of the Committee. In 1849 he (Mr. Herbert) asked him to let it be printed, and he assented. The evidence had not been printed ten days before leading articles appeared in the Morning Chronicle and the Times stating the great hardship on the depositors, and that cases had been made out for the repayment of their money. Since that expression of public opinion, there had been fresh evidence, to a small portion of which he would call the attention of the House. One word more only with respect to the Committee. It would be in the recollection of hon. Members that an anxious wish was expressed on the part of Irish Members to have on the Committee the name of the hon. and learned Member for the city of Dublin. The Chancellor of the Exchequer said he objected with great regret to the nomination of the hon. and learned Gentleman, and that nothing would have induced him to do so, but he wished to stick to the reappointment of the Committee of the previous Session. Well, the hon. Member for Montrose was a Member of the former Committee of 1848, and expressed his intention of not serving on the Committee for 1849. That was subsequent to the debate in which the hon. and learned Member for the city of Dublin was objected to, and it would have been very natural for the Chancellor of the Exchequer then to have nominated him; but he insisted upon nominating the noble Lord the Member for Kildare. That noble Lord was a personal friend of his, and he was not likely, therefore, to asperse 929 him; but in the case of this Committee, where very intricate evidence had to be taken, and legal points discussed, he said he was not capable of adequately supplying the place of the hon. and learned Member for the city of Dublin. He said, then, this was the time for bringing forward any evidence he had to bring forward that was given before that Committee. He should confine himself to the particular grounds on which he had stated that these parties ought to be repaid. He found them, first of all, in the Act for 1844; and he would read to the House the evidence of Mr. Tidd Pratt, that in his opinion a gross hardship had been inflicted by the passing of that Act:—210. You have stated that there is no power to inspect banks, and that you only visit them when you are called on to do so to settle disputes?—That is all.211. If no dispute arises, you never visit a bank?—No.212. And the trustees and actuaries are perfectly uncontrolled in the management?—Just the same as any gentleman is in his own private affairs.Having stated that, would the House listen for a moment to the position in which the Act of 1844 placed the depositors? The hon. Member for Cork stated that there was a sum of 36,000l. due to depositors in the Killarney savings bank, and there were only 16,000l. of assets. Now, that 16,000l. instead of being divided, as in justice and equity it ought to have been, equally amongst the depositors, was divided in this way:—20s. in the pound was given to depositors previous to 1844, and 3s. in the pound to the depositors subsequent to that period. What was the reason of a decision so unjust, so monstrous, but the passing of the Act of 1844? This was the evidence of Mr. Tidd Pratt on that point:—3,703. (Mr. Herbert.) Did you not, in the Killarney case, award 20s. in the pound to depositors previous to 1844?—Yes; I awarded that the trustees and manager should pay 20s. in the pound.3,704. And you awarded 3s. in the pound to those that had deposited subsequent to 1844?—Yes.3,705. Of course you made those awards in conformity with what you considered to be the law?—Decidedly.3,706. Do you think that that state of the law has caused a gross practical injustice to the depositors subsequent to 1844?—There is no doubt that the Act of 1844 caused a great injustice.3,709. Supposing the Act of 1844 had not passed, would you not have divided the whole sum that remained in the Killarney case equally amongst all the legal depositors?—I should, if the Act of 1844 had not passed.9303,710. If you had been called upon as a private gentleman to award, and you had been told to distribute this money according to the equity of the case, would you have distributed it equally among all the legal depositors?—I think I should have distributed it equally among all the legal depositors, if it were not confined by any Act of Parliament.Allusion had been made to the number of irregularities which the Commissioners for the Reduction of the National Debt had permitted. In almost every particular where the Acts evidently contemplated their controlling and seeing efficiently carried out provisions eminently intended for the protection of depositors, they had failed to do so. The Commissioners of the National Debt had neglected their duty in not seeing that the Act of Parliament was complied with; and their permitting irregularities on the part of the banks, was clear if the House turned to the evidence of Mr. Higham, the Secretary to the National Debt Office, given before the Committee in 1848. The Morning Chronicle, in an able article on the subject, had very appropriately characterised the evidence of that gentleman as a "free-and-easy style of evidence." When Mr. Higham was asked respecting the bonds given by actuaries, which the Act required to be lodged with the Commissioners for the Reduction of the National Debt, his evidence was as follows:—1,060. Was not it the duty of the commissioners or the comptroller under that Act to be in possession of the bonds?—Yes.1,061. As far as they are not in possession, they have not acted as the Act directs?—Strictly speaking, they certainly have not.1062. Speaking in any way, has the Act been complied with?—The Act has not been complied with, in so far as the bonds were not lodged according to this Act in the hands of the commissioners.1,063. Is not it the fault of the commissioners that they have not been so lodged; does not the Act direct them to see that they are lodged with them?—It directs the comptroller or assistant comptroller to ascertain if those bonds are lodged with the commissioners.1,064. Did you in this case ascertain that respecting the bonds of the Tralee bank?—Looking at this document, I should say we did not.1,065. With respect to the Killarney bank, what is the case?—It appears to be in the same position as the Tralee bank.1,066. What bonds have you belonging to any Irish savings banks?—I do not know what bonds Mr. Tidd Pratt has in his possession.He would ask any hon. Member if his own agent admitted that it was his duty to do certain acts, although unimportant ones, and that he had neglected to do them, would not instant dismissal follow? One 931 of the Acts prescribed that the National Debt Commissioners should publish the names of those banks which neglected to transmit their accounts regularly. Mr. Higham was asked—670. Have you ever published the name of any bank which has not sent you its accounts regularly?—We have not, because we have never found any bank which has not sent in its accounts regularly; when I say regularly, I do not mean to the day, but within a sufficient time to enable us to make our returns to the Board of Trade, which we do at the beginning of June,But this was perfectly immaterial in comparison with other gross breaches of duty on the part of the Commissioners. He had a charge to make against them which would startle some hon. Members, namely, that when accounts were transmitted to them, they passed and signed them without the slightest supervision, overlooking gross errors of addition and multiplication, which a schoolboy would at once have detected. On the failure of the Killarney bank, in 1848, he had seen in a county newspaper what purported to be a copy of the yearly account sent to the Commissioners; and in ten minutes he detected errors to the extent of 4,000l. His first impression was, that this was only an account with which a fraudulent actuary had deceived the trustees, not thinking it possible that it could have been submitted to the National Debt Commissioners. But Mr. Higham admitted that this account had been passed. He (Mr. Herbert) went to the National Debt Office, and found that the accounts since 1844, passed and signed by the Commissioners, contained the grossest errors. The secretary was examined at considerable length on this subject: his answer, in the free-and-easy style, was, it was not their business to look to them—it was impossible to ascertain what was in the accounts. He was asked—615 (Mr. Fagan). But here on the face of the accounts, where there are forty-one depositors of 100l., and they are thrown out l,351l., instead of 4,100l.—is it a portion of your duty to investigate that part of the account?—Decidedly not; we do not look at the particular items; we only cast up the several items to ascertain whether the gross amount is correct.616. If by accident you had made such a discovery, what should you have done with the account?—If it had caught my eye, I should have returned it, of course, being an apparent discrepancy; I should never think of passing an account where I saw the least variation, if it caught my eye.Thus it depended entirely on whether these errors caught the secretary's eye, whether these accounts should be of any use or 932 force whatever. Reference had been made to the opinion of Mr. Greene, the late Attorney General for Ireland, one of the best lawyers either in Ireland or this country. As only a portion of his opinion had been read, he would quote the remainder:—I am of opinion that under the 46th section of the 9th George IV., cap. 92, the Commissioners for the Reduction of the National Debt had authority, upon being apprised that the trustees of the savings bank had neglected to transmit the account required by the Act, or had neglected or refused to obey any orders or directions given by the Commissioners, to close the account of the trustees, and to discontinue keeping any further account with them, and to hold the funds then in their hands until such account should be reopened. I also think, that, under the section of 3 & 4 William IV. referred to (sec. 30), the Commissioners were required to publish the name of the savings bank guilty of default in not transmitting the account directed by the former Act, and that in omitting so to do, the Commissioners were guilty of a violation of the duty imposed upon them by the Act.He could not omit to allude to the extraordinary incapacity or misconduct of the gentleman whom the Government had appointed to exercise such meagre supervision as they were told could alone be exercised over the officers of savings banks under these Acts. Mr. Tidd Pratt had gone down to Tralee, and had made awards against a certain number of the trustees, but with such a degree of haste and precipitancy that it was perfectly evident he must have fallen into errors of considerable importance, as it was impossible he could have gone into all the circumstances which he professed to have gone into. One of the trustees was sued on one of these awards at the spring assizes of 1849. After a lengthened trial, Mr. Tidd Pratt himself being present and giving evidence, the jury, on the charge of the Judge, found a verdict for the defendant. The Judge told the jury that what was urged in the award—namely, that the party had wilfully neglected his duty—had not been proved, but that, on the contrary, it had been proved that he had not been guilty of such neglect, for he had attended to the utmost of his ability, and he was the only trustee who had done so. When this case was quoted on a former occasion, the right hon. Baronet opposite thought it a sufficient answer; but he did not believe the House would think so—to say, that it was an Irish Judge and an Irish jury, that Judge being Mr. Justice Ball, the late Whig Attorney General, who was generally held to be a sound lawyer. An appeal had been entered and argued, and judgment had 933 been given by Lord Chief Justice Blackburn, in the Court of Queen's Bench only on Wednesday last. He said—On the 21st of April, Mr. Pratt, in his evidence, stated that he issued a circular notice to the trustees and managers, including the defendant, and sent it to them. He then stated that many of the persons to whom these circulars were addressed attended, and amongst them was the defendant. Mr. Pratt then stated that he would be in attendance next day, and would receive the claims of the depositors; that he attended for three or four days, when the depositors made their claims, the defendant, amongst other trustees, attending; but he had been assured by him (Mr. Pratt) that in doing so he did not thereby increase any liability beyond that to which he would have been subjected if he had not attended at all. Mr. Pratt further said, that he gave no notice in writing at the bank of his intention—that was, that he did not serve the notices required by the Act of Parliament at all. He (the Lord Chief Justice) need not remark, that it was essential to the validity of any award, as it was to that of every judicial proceeding, that the party to be bound by it should have all that notice of it which the law required; and he might extend that remark in a greater sense to those who from their joint liability might have an interest in seeing that others having an equal liability had also full and sufficient notice. Now, let him see, had all or any of the parties the notice to which the Act entitled them. According to the evidence, not one of the plain and simple directions of the Act of Parliament were pursued by the public officer. There was not any notice in writing, of any kind, sent to, or left at, the office of the bank. The circular of the 21st was not so left; or, indeed, if it had, it was not written and delivered before any dispute arose. There seemed, therefore, in all these respects to have been an omission of compliance with the law prescribed as essential to the jurisdiction of Mr. Pratt.Thus the former decision was confirmed; and the unfortunate depositors, who had sought by law to obtain such redress as the imperfect provisions of the Acts of Parliament afforded them, had been thrown overboard, in consequence of the utter incompetency of a public officer. So far from everything being conducted in the business-like manner which the importance of the interests at stake demanded—so far from the Acts themselves being drawn up with that care which the interests of these poor people required—every stage in the proceedings, and every clause of the Act, exhibited a total disregard of those interests. Here was a case where a number of industrious persons had been reduced to the most deplorable state of beggary and destitution, not through any fault of their own, but actually owing to their possession of those qualities which it was the duty of every good Government to foster and encourage, in consequence of 934 their habits of temperance, industry, and self-reliance. What was the use 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? He had witnessed the sufferings of these people; he had seen in the workhouse persons who had spent a life of toil, and never dreamed of being compelled to seek parochial relief; he had seen one who, with a hardy spirit, asked if there was any chance of justice being wrung from the Government; and another, who had lost his intellects in consequence of the shock occasioned by the failure of one of these banks. Mr. Tidd Pratt had stated in his report that these people deserved no pity or commiseration, because in some cases their deposits had been allowed to exceed the legal limit; and the right hon. Gentleman the Chancellor of the Exchequer had that night said that the claim was a novel one—that there never had been a claim of such a nature. He would remind the right hon. Gentleman that there had been cases in England where the trustees had come forward to make good the deficiency; but that was before the alteration of the law in 1844, when they were legally responsible for any defalcation that might take place. The Rochdale case was the only one that had occurred since; and the result of that case had been a pressing application to the Government for compensation to the sufferers.
§ MR. BANKES
thought the hon. Member for Kerry had given good reasons why he had taken the present opportunity of offering his remarks to the House, instead of waiting till the nomination of the Committee, which would probably take place at a period of the night when he might not be able to obtain that attention which the subject deserved. He was aware that the right hon. Chancellor of the Exchequer wished that the subject should be considered prospectively. But as three months of the Session had elapsed he thought he was entitled to ask the Government whether they intended to give any aid to those who in England and Ireland had suffered so severely from the failure of savings banks—and in some degree, he must say, from the neglect of the Government itself? During three Sessions the attention of the House and of the Government had been called to this particular subject, and it was extraordinary, considering that neglect of duty on the part of persons connected with savings 935 banks was known to some members of the Government, that last Session should have been allowed to pass without a measure of this kind being introduced. The Government were aware of what was not generally known—that the Bill of 1844 materially affected the safety and security of the depositors, and yet they permitted the Session to slip away without bringing forward any measure on the subject. In his opinion Government was justly to blame for their neglecting this subject, from the time they became aware of the circumstances alluded to up to the present moment. Only the other day another case of failure had occurred in a neighbouring county, and there was no saying where the matter would end. Not only had they to regret the pecuniary loss of the sufferers, but also the public loss which would arise from circumscribing the limits of these beneficial institutions, in consequence of the neglect of the Government in not earlier applying a remedy. He would not say that there was a greater disposition in that House to legislate for the rich rather than the poor; but he did say, that if the sufferers in the present case had been trustees, and not depositors, more would have been said about the matter. The hon. Member for Scarborough, and the hon. Member for Rochdale, had both alluded to the failures that had taken place in their neighbourhoods. He did not clearly understand whether the proposed Committee was to embrace those places as well as Ireland. The hon. Member for Kerry had given a very satisfactory reason why he did not desire the appointment of the Committee with reference to the case of Ireland. The hon. Member seemed to think that the question of their claims was so clear that a Committee would only be a waste of time. In regard to all cases—taking into consideration the ignorance of depositors with regard to the terms on which they had intrusted their money, and their belief that they had the security either of the trustees or the Government itself, he thought a claim might fairly be urged on their behalf. There were not wanting precedents for remunerating parties who had suffered from no fault of their own, but from that of public officers. In one case, the Bank of England had granted an indemnity of 300,000l. or 400,000l. to parties who had suffered from a forgery. It was their duty to render savings banks as secure as possible. He was aware that it would be better to discuss the Bill at a 936 future stage, but thought that the present was not an unfair time for calling the attention of the House to the subject, and asking the Chancellor of the Exchequer whether he had made up his mind to recommend any assistance from the public purse to those who had suffered?
said, these unfortunate depositors had a claim against the country, which was more than against the Government, for the country was mainly to blame. In a country so free as this, the Government was the agent of the country; and the Government having many occupations of its own, the country ought to have looked into this business itself, and not have allowed unhappy starving Irishmen, whom clergy and laity had rushed to urge to save their potato-peelings and lodge them in savings banks, to find themseles defrauded of their painful savings. The country not having done so, he hoped it would not grumble or resist, when called on to find the funds for redressing this great evil. Why should not the country have forced the Government to take precautions? It was done in the case of collectors of taxes; if they ran away with the money, no harm was done, for they left their securities behind them. Why was not that done in savings banks? Why was any opportunity left for the infirmity of mankind to display itself in this most piteous and most painful form? With ordinary pains, the Government might apply itself to this question with success; for the difficulties surrounding it might all be obviated. Why, for instance, should a limit be put on what the frugality of individuals should enable them to lodge in a savings bank? A private banker never attempted to limit the amount of his customers' deposits; for the more they brought to him, the greater his profits. Why should not the same be the case with savings banks? A proverbial expression implied, that some things were cheap, but so squalid that they were not worth having. He apprehended depositors never would demand that species of cheapness, which was accompanied with the uncertainty of ever seeing their money again; they would never grudge a just and proper payment for any fair advantage. He hoped these suggestions might be useful towards devising a remedy for the evils that had arisen, and for preventing their recurrence.
The CHANCELLOR OF THE EXCHE-QUER
said, with regard to the question 937 which had been put to him by his hon. Friend the Member for Shrewsbury as to the issue of Exchequer-bills, in connection with this subject, he would merely observe that the general opinion of the country appeared to be that the number of Exchequer-bills should be decreased rather than increased; and as to the question of the hon. and gallant Colonel the Member for Bradford, he would remark that he did not think it would be advisable to extend the operations of savings banks in the manner which he proposed. The suggestion that in the case of these savings banks the functions of general bankers should be assumed, would not, he thought, on further reflection, be pressed. With regard to the services of notices in these cases, he did not think this was a proper or convenient opportunity for going into a lengthened discussion upon the subject, and he would only refer to the last instance of gross abuse which had occurred. With regard to the statement that proper notice had not been given to the trustees, what was really the fact? He believed it to be perfectly true that the award had been upset by the Court of Queen's Bench in Ireland. The enactment was, that notice should be given at the place where the savings bank was kept; and in this case the savings bank had been kept at the house of the actuary, but at the time for serving the notice the man was in gaol, and the house was shut up, and the whole of the papers of the savings bank were in the town-hall. How, then, was the Government officer to make the trustees and managers aware that they should attend the meeting? He was enabled to act ex parte, and he sent written circulars to every trustee and manager. The meetings were attended by several of them, and every meeting was attended by the party against whom the action was brought. Therefore the person that could, in that case, be damnified by the absence of notice, not only received it but attended. So far from there having been any neglect, the only possible way of executing the intentions of the Act of Parliament was adopted, and notice sent to every one of the trustees and managers. He must tell the House that he did introduce a Bill to extend the provisions to this country of the Bill which had been proposed for Ireland; but having been opposed by hon. Gentlemen at the opposite side of the House, he was obliged, against his will, to give it up. As an actuary had been appointed to report upon this subject, it was 938 indispensably necessary to reappoint the Committee to receive his report.
§ The CHANCELLOR OF THE EXCHEQUER
At the present moment I don't intend so to do. All the cases differ very much. Probably we shall be shortly able to make up our minds as to what we shall do with the others.
§ Bill ordered to be brought in by the Chancellor of the Exchequer and Mr. Attorney General.