HC Deb 18 March 1852 vol 119 cc1246-56

said, he rose to move that the House resolve itself into a Committee, to consider the losses sustained by the sufferers in the late Cuffe-street Savings Bank, Dublin; and to make some arrangement for granting them a compensation. He had had the honour of placing Her Majesty's late Government in a minority twice in the same night on this subject; but, unlike other Members who had done the same, he had not received Her Majesty's commands to form a new Ministry. A Select Committee had been appointed to consider the losses sustained by the depositors in the late Cuffe-street Savings Bank in Dublin. That Committee sat in 1848, 1849, and 1850, and in the month of August, 1850, they made a Report favourable to the claims he advocated. His object in bringing forward his present Motion was to obtain the balance of 34,000l. still due to the sufferers by the failure of this bank. When he accepted the sum of 30,000l., he did so as an instalment, and he gave notice then that he should press for the balance. He did not seek this as a gift, or solicit it in the name of charity or benevolence, but as a right; and he undertook to prove that this money was due from the public Exchequer to the unfortunate persons whom he repoesented. The late Chancellor of the Exchequer moved that 30,000l. be voted for the depositors; and, on his own showing, admitted that if the Commissioners for the Seduction of the National Debt had notified the insolvency of the Cuffe-street Savings Bank in 1838, the assets would have enabled them to divide 16s. 6d. in the pound. If they had closed the bank in 1845, the Report stated that there would have been 15s. in the pound to be divided. But he (Mr. Reynolds) had proved from the books of Mr. Higham, the Assistant Controller of the National Debt Office, that from the year 1833 to 1849 inclusive, the Commissioners for the Reduction of the National Debt had official knowledge that the Cuffe-street Savings Bank was insolvent, and that this knowledge had been concealed from the depositors on "grounds of public policy." Being asked for the meaning of this term, he said, it meant that if they had closed the Cuffe-street Savings Bank, it might have led to a panic, and that a run might have taken place upon all the savings banks in the United Kingdom, the total balance to the credit of the depositors in which amounted to not less than 33,000,000l. The right hon. Baronet the Member for Ripon (Sir J. Graham), in the debate on this subject last year, repudiated altogether the repayment of the money lost by the depositors upon the grounds of charity. He said if the claim were founded in equity, the Government ought to pay it in full; and if it were not so, that none should be paid. He added that it was unworthy of the British empire to compound for 10s. in the pound with a parcel of paupers. His hon. Friend the Member for Manchester (Mr. Bright) said he would willingly vote for the payment of the whole 64,000l. His right hon. and learned Friend (Mr. Napier) also supported him. The right hon. and learned Gentleman expressed an opinion that the Commissioners were liable for the debts of the bank; and he believed it would be found that the right hon. and learned Gentleman's opinion on that point had undergone no alteration. The 30,000l., or at least a portion of it, was paid, but not until the Government had sent over Mr. Martin to make a thorough examination of the accounts. After a year's investigation of the books, he found that the total defalcation was 64,976l. 10s. 7d.; and, when the unclaimed allowances and the claims disallowed for informality had been deducted, there was a balance of 56,229l. 16s. 4d. due to the depositors, to whom there was paid, including about 600l., the expenses of the Commission, the sum of 28,767l. 11s. 5d., leaving a surplus of 1,230l. 8s. 7d. in hand. Of the 1,977 depositors who received the grant—and he mentioned this to show the misery which the failure of the bank must have occasioned—there were 507 whose deposits did not exceed 5l., 306 not exceeding 10l., 354 not exceeding 20l., 238 not exceeding 30l., 233 not exceeding 50l., and 294 exceeding that amount. About two-thirds of these poor persons were females—old, decrepit servants, who had placed their savings in this bank as a small provision against a rainy day, and who were therefore placed in circumstances of extreme misery by the fraud of which they had been the victims. From the report of Mr. Martin, it appeared that in 1830, the bank was insolvent to the extent of 4,448l. 10s. 5d.; in 1831, 17,888l. 13s. 5d.; in 1832, 22,825l. 17s. 3d.; in 1838, 35,211l. 2s. 1d.; in 1845, 56,415l. 16s. 6d.; in 1846, 58,341l. 7s. 11d.; in 1847, 60,839l. 6s. 5d.; and in 1848, 64,683l. 7s. 1d. It might be asked why they did not look to those who had acted as trustees and managers? He had a very simple answer to that question. The Savings Banks were established under the 9th of Geo. IV., c. 92, the ninth section of which made the trustees personally liable for their wilful neglect or fraud; but in 1844, when the Commissioners for the Reduction of the National Debt were aware that the Cuffe-street Bank was insolvent to the extent of more than 40,000l., they repealed that section, and made the trustees only liable for the amount to which they would sign a guarantee. And how many of the trustees of this bank did they think had signed? Just two, for 100l. each. Surely, then, the Government ought to make good the whole of the deficiency. It was established by Mr. Higham's evidence that every account from 1833 showed a deficiency, beginning with 3,671l. in that year, and amounting to 32,000l. in 1847. These were not the real deficiencies, for Mr. Martin, the accountant sent over, found them to be above 60,000l. All this time the Commissioners of the National Debt were aware of this insolvency; and yet, when it amounted to upwards of 64,000l., there was only 83l. to meet it. When the Motion was last before the House, the whole of the daily papers had condemned the course pursued, and said that the whole amount ought to have been voted. Though he and the hon. Member for Kerry (Mr. H. Herbert) had carried the Motion for a Committee, they had not even been allowed to name the Committee; and the Government had striven all in their power to obtain a less favourable report than was given. The case of the Cuffe-street Savings Bank was essentially different from those of the Kerry and Tralee Banks. In the latter cases the Commissioners did not know of the insolvency. To a tribunal of honourable and honest men he confidently appealed for the payment of the remaining instalment of the debt.

Motion made, and Question put— That this House will, upon Tuesday next, resolve itself into a Committee, to consider of an humble Address to be presented to Her Majesty, praying that Her Majesty may be graciously pleased to take the case of the sufferers in the Cuffe-street Savings Bank, Dublin, into Her Royal consideration, and to grant them a compensation for their losses, and to assure Her Majesty that this House will make good the same.


said, this was one of those distressing cases with which every Member of the House must sympathise. No doubt a large number of poor persons, in Ireland, had suffered severely by the failure of this Cuffe-street Bank; and he was rather surprised that the hon. Gentleman who brought forward this Motion, while he was so indignant against certain branches of the Administration for their assumed negligence, had not bestowed some of his indignation on the managers of the bank, whose conduct had certainly been as profligate and iniquitous as could well be imagined. The House must not allow itself to be wholly carried away by sympathy for the sufferers, without inquiring into all the circumstances. There were many cases where Savings Banks had been conducted with a great want of ability and honesty, and a very considerable loss had necessarily occurred to the depositors; but no one could contend that it was the duty of Government to come forward and offer compensation for the want of ability and want of faith with which these institutions had been managed. The only ground on which an appeal had been made to the House in respect to this Cuffe-street Bank was, that there were some peculiar circum- stances which distinguished it from the usual instances where great losses had been experienced by the depositors from the malversation or mismanagement of the trustees. The question had been frequently discussed in the present Parliament, and had been the subject of the elaborate inquiry of a Committee. Were it viewed in a very rigid spirit, he thought they must arrive at the conclusion that no relief whatever ought to have been granted. He did not regret that that rigid decision had not been arrived at. Instances would arise where it was not politic, and hardly possible, to come to a conclusion which could be supported by very severe principles of justice. There were certain appeals which, under peculiar circumstances, would enter into the management even of pounds, shillings, and pence; and, although he was not bound to support, still he could fairly say he sympathised with the case, and could comprehend how, after a painful and elaborate discussion, first the Committee, and then the House, had sanctioned the arrangement which took place in 1850. But this was the real state of the case. The grant of 30,000l. was then brought forward by the Government, and accepted, he believed, by the majority who required it, as a settlement of the question. It was very possible that one or two Members, while voting for that grant, might have protested against accepting it as a settlement of the case; but he insisted upon this as the proof that it was so offered by the Government. He could comprehend and sympathise with the arrangement thus made in 1850, and having carefully examined the subject, he could discover nothing to induce him to believe that the Government, under the circumstances, could have made a more considerate arrangement. The exceptional circumstance which marked the case of the Cuffe-street Bank from other Savings Bank failures in England and Ireland, no doubt arose from a certain appearance of negligence on the part of the Administration, which was alleged as the real cause of the loss; but he was certain that, were the case examined rigidly with respect to its merits, they could not, upon the conduct of the Commissioners of the National Debt and the Government of the day, found any legal or equitable claim for compensation. That being so, he might be asked upon what principle the 30,000l. had been voted. It was not necessary to go into that question. He remembered the temper of the House with which that proposition was received and sanctioned; but it was brought forward by the Government, he asserted, as a settlement of the question; and though there might be originally ground for disputing the wisdom, justice, or expediency of making a grant at all, or, if it were proposed, of proposing a complete one—as far as that House was concerned, the Vote at which it arrived was most certainly a settlement of the question. Believing this, and having great doubts, and more than doubts, whether with a rigid application of those principles of justice to which the hon. Member had referred, the Government would have been authorised in making any advance whatever—Seating the question as a settled question—though he hoped he sympathised as much as any one with those who had suffered from the conduct of the trustees nnd directors of the Cuffe-street Bank—he did not feel authorised to accede to the Motion of the hon. Gentleman. Indeed, considering all the circumstances of the case, and the prolonged malversation that had occurred, the hon. Gentleman's clients might consider themselves very fortunate to have obtained the assistance they had done from Parliament. He did not know one instance where the sufferers from the mismanagement of a Savings Bank had been so compensated. Under these circumstances, it was his duty to resist the Motion. He did so with unaffected pain. It would be very agreeable to him to consent to a proposition which would give an entire repayment to those depositors; but the House must recollect that a great number of them had made deposits in contravention of the well-known laws and regulations of Savings Banks. Therefore, they had suffered not merely by the mismanagement of the trustees and directors, but they had made deposits which they were perfectly aware were contrary to the rules of the institution. These cases were mentioned in the Report, in the schedule of rejected claims, A woman named Doherty, of St. Stephen's-green, Dublin, had three accounts, all in fictitious names, altogether amounting to nearly 300l. Her claim was consequently discllowed. The hon. Gentleman could hardly say that that was an instance of suffering which had entirely arisen from the mismanagement of the trustees and directors. There were several cases of the same kind, which had been disallowed: in one the depositor had taken out three pass-books; in another, the party claimed under a will without having proved it. Of course, such cases could not be entertained. A sum of nearly 30,000l. had been appropriated amongst the depositors, and it was very difficult to establish the justice of that original Vote. He should be sorry to seem to oppose what any one thought a just claim, on the part of a suffering class; but if the House established a precedent, after having settled a case of this kind by a very liberal arrangement—if they once admitted as a claim to relief the plea that the Government had been cognisant of the mismanagement of a Savings Bank, there would be no end to the claims that might be made. The Cuffe-street Savings Bank, instead of being a case of unprecedented hardship, was remarkable for receiving relief, which no other, sufferers had obtained. He trusted the hon. Gentleman would not press his Motion. The whole subject of Savings Banks was now under the consideration of Government, with the most anxious wish to meet the great difficulties of that very difficult subject, and, if possible, to place their affairs on such a footing as to render catastrophes like this impossible in future. With regard to the victims in the present case, remembering what had occurred, he could not feel it his duty to sanction the views of the hon. Gentleman, and he must be placed in the painful position of opposing the Motion.


could have wished the subject not to be again discussed on the present occasion. Considering the impossibility of the right hon. Chancellor of the Exchequer having yet devoted his attention to it, it was to be regretted that the hon. Member for the city of Dublin had now brought it forward. He (Mr. H. Herbert) had been the original mover of this question, for the appointment of a Committee, and not the hon. Member for the city of Dublin, as he had stated. He (Mr. H. Herbert) contended that this was not merely an Irish question. It was one equally affecting England, as there had been as many failures of Savings Banks in this country as in Ireland. He admitted that if the trustees had done their duty, no loss would have been incurred; but it should be remembered that in 1844, up to which time they were legally responsible to the depositors, the Legislature had stepped in and relieved them from that responsibility. The consequent was, when the failures occurred, the depositors had neither the responsibility of the trustees nor the Government. In the failure of a private bank, the creditors could come on the private resources of the banker; and why should not the depositors in Savings Banks have some such security? It had been thought necessary, by reason of the great sums now deposited in Savings Banks, to relieve the trustees from their responsibility; but surely some substitute should have been provided. It was said by the right hon. Gentleman the Chancellor of the Exchequer, that this was the only case where the sufferers had been compensated by the Legislature. But in the case of the Exchequer Bills' frauds in 1844, where the sufferers were rich merchants, compensation had been provided; and surely the poor depositors in Savings Banks, who had suffered, had as good a claim. He rejoiced to hear that the whole question was under the consideration of the Government. After that pledge was fulfilled, he should bring forward a Motion on the subject. Till then he would recommend that the Motion of the hon. Member for the city of Dublin should be withdrawn. If the hon. Member divided, he (Mr. H. Herbert) should support the Motion, being an advocate for a full measure of justice.


would also strongly recommend the hon. Member for the city of Dublin to withdraw the Motion, at the same time he was bound to say a few words in explanation of the opinions he had formerly expressed on the question. He still retained those opinions, and had formed them in consequence of the admissions in the Report that the Commissioners for the Reduction of the National Debt had greatly neglected their duty in not exercising the powers with which they were entrusted. No question was of more importance to the community than that of Savings Banks, and he rejoiced to know that his right hon. Friend the Chancellor of the Exchequer was about to direct his attention to the subject. He hoped—indeed he had reason to believe—that arrangements were in contemplation for putting those institutions on a basis which would give that security to depositors to which they were entitled. Under these circumstances he recommended the hon. Gentleman not to press his Motion to a division.


said, the evil arose in consequence of the fault of the public officers, whose duty it was to ascertain the solvency of the bank. The depositors in the Cuffe-street Savings' Bank had lodged their money with as much confidence in its safety as if they had placed it in the Exchequer chest. He believed that the Government was liable to make good those losses; but he put it to the hon. Gentleman the Member for the city of Dublin, whether, after the declaration of the right hon. Chancellor of the Exchequer, he would press his Motion to a division, as he did not think he would gain anything by taking so premature a course.


said, that the Commissioners for the Reduction of the National Debt permitted the Cuffe-street Savings Bank to go in long after its affaire had become insolvent. In his opinion, the House was bound to find the remaining 34,000l., because, as the Legislature had stepped in, and taken away the responsibility of the trustees, it was only just and fair that it should make good the losses caused by the ignorance and misconduct of public officers. Put Savings Banks under the care of the Comptroller General, or of some responsible persons, and these malversations would no longer occur. He should vote for the Motion if it went to a division.


did not think the Motion could with justice be resisted, for the Report of 1850 showed the Cuffe-street Bank to be wholly distinct from every other Savings Bank in the United Kingdom. The fact of the House of Commons having sanctioned the vote of 30,000l. two years ago, was an admission of the principle that the depositors ought to be fully compensated. He believed that the depositors in this bank had suffered very severely from its stoppages, and that the fault lay with the public officers, who had neglected their duty. Should the right hon. Chancellor of the Exchequer give a promise to the hon. Member for the City of Dublin that he would consider the case of the Cuffe-street Bank, per se, when the general question should come before the House, he (Mr. Scully) would advise the hon. Member to withdraw his Motion; but to press it in the absense of such a promise.


had heard with great pleasure the announcement made by the right hon. Chancellor of the Exchequer that the whole question of Savings Banks was to be fully considered; but the right hon. Gentleman's statement, to the effect that he considered this question finally settled by the grant of 30,000l., pained and disappointed him. A Committee, consisting of the leading financiers of that House, had been appointed solemnly to consider this subject, and the result was that the late Chancellor of the Exchequer proposed a vote of 30,000l. for the mitigation of the injuries suffered by the depositors in the Cuffe-street Savings Bank. Now, if the guardian of the public purse, the Chancellor of the Exchequer, found the case so strong as to induce him to make that proposition, on what ground could the remaining 10s. in the pound be withheld? He admitted that the moment chosen for bringing forward the question was premature; but that did not alter the justice of the case, and he wished to be understood that he was not advocating the claims of those depositors who had violated the Act of Parliament.


said, in this case the public had been placed in a most unfortunate and anomalous position, for if the principle were laid down that these losses should be paid out of the public taxes, every other Savings Bank would have an equal claim. He trusted the right hon. Chancellor of the Exchequer would take into consideration the propriety of making an alteration in the existing law so as to afford protection to the public as well as to the depositors.


in reply, said, he must decline to respond to the appeal made to him to withdraw the Motion, after the declaration of the right hon. Gentleman the Chancellor of the Exchequer, that these depositors were fortunate in getting so much as they did, and had made a most capital bargain. Were the right hon. Gentleman to promise, without pledging himself to any particular decision, that when the whole question of Savings Banks was investigated, the particular case of the Cuffe-street Savings Bank would also be considered, he would, in that case, withdraw the Motion for the present. He had been asked privately why he did not bring forward this subject last year. His answer was, the Ecclesiastical Titles Assumption Bill stood in the way. Until the dogdays almost there was hardly a single night in which he had not some quarrel with Her Majesty's Ministers about that Bill, and from the cat-and-dog life he then led with them, they were, of course, anything but disposed to go out of their way to accommodate him with reference to this or any other subject. But now the case was altered, because he found upon the Ministerial benches opposite no fewer than seven hon. Gentlemen who voted with him in 1850, including the noble Lord the Mem- ber for Tyrone (Lord C. Hamilton), the hon. and gallant Gentleman the Member for Portarlington (Colonel Dunne), and the hon. and learned Gentleman the Member for the University of Dublin (Mr. Napier); and, therefore, he thought it a favourable opportunity to bring the subject again before the House. He regretted that the eloquence of the right hon. and learned Attorney General for Ireland had had so little effect upon the right hon. Gentleman the Chancellor of the Exchequer. He had hoped he would have taken counsel of his Irish advisers on this subject, for they knew its merits well, and could give him good advice upon it. He begged to say that he had no anxiety to call for a division on this occasion, provided he had something like a reasonable ground to hope that, when the whole question of Savings Banks came to be considered, this subject would be taken into consideration at the same time; but, unless this assurance were given him, he must divide now.

House divided:—Ayes 40; Noes 169: Majority 129.