HC Deb 08 June 1857 vol 145 cc1372-92

Order for Second Reading read.

MR. TURNER

said, that he felt it his duty to make a few observations with regard to this Bill, as it was of so much importance to Manchester, and he trusted the House would receive his remarks with the consideration they always afforded to a first, speech. The establishment of savings banks had been a measure of the greatest benefit to the population of the country, and he approved highly of the principle involved in the Bill, namely, that the Government should give security, not only to the depositors to the extent of the money placed by the conductors of savings banks in the hands of the Commissioners for the Reduction of the National Debt, but that that security should be extended to all deposits made in the sayings banks. There was a mutual obligation between the Government and savings banks, for if the one gave the benefit of security, the other afforded a fund to the amount of £35,000,000 or £36,000,000, which placed an immense financial power in the hands of the Government. While the Government gave security to the depositors, they were entitled to exercise the power of investigating the management and affairs of the banks; but he feared they might carry that power of interference too far. He knew there were instances of defalcations, such as those in the Dublin and Rochdale Banks, in respect to which some blame was attached to the Government that they were not sooner discovered; but if interference under the present Bill should be carried so far as to disgust the conductors of well-managed banks, great mischief would be the result. In Manchester the savings bank was managed in a manner perfectly satisfactory to the depositors by gentlemen who devoted to that purpose a great amount of ability and talent, and it would be a great evil if such men should be disgusted by unnecessary interference on the part of the Government. He knew that the present Chancellor of the Exchequer, and the present Comptroller General, did not wish to interfere unnecessarily in the management of savings banks; but there were clauses in this Bill which gave large powers; and which future Chancellors of the Exchequer and future Comptrollers General might use unnecessarily, He wished the Government had complied with the prayer of the numerous petitions which had suggested that the Bill should be referred to a Select Committee in order that a measure might have been agreed on satisfactory to all parties. He did not wish to oppose the second reading of the Bill, but he trusted that the Chancellor of the Exchequer would state publicly, as he had done in private, that he did not wish to interfere with those Gentlemen who took an active part in well managed banks. That would have a salutary effect in allaying the apprehensions which were entertained by the local managers and committees of these banks. For if such unnecessary and vexatious interference on the part of the Government officials did take place, its effect could but be to disgust the managers, to diminish the number and amount of deposits, and to impede the prosperity and usefulness of the institutions. Let the Government insist on some mode by which the accounts could be checked, but when a savings bank was well managed, let there be no interference on the part of Government officials.

MR. GROGAN

said, he would inform the hon. Member that in the case of the Dublin bank referred to the Government neglected their duty; for, according to the blue-book, the Government were perfectly aware of the irregularities, but for public purposes it was convenient to connive at them, and the consequence was, that the depositors were deprived of their just rights. Any measure, therefore, to prevent the occurrence of such an evil must be a great boon to depositors, but the Government must take care not to disgust the gentlemen who took on themselves the management of savings banks by unnecessary interference on the part of Government officials. The Government should arrange a scale of salaries and of interest, and beyond that they should not unduly interfere in the management of these banks. The Chancellor of the Exchequer had stated on a previous occasion that he would attempt, before the second reading of the amended Bill, to put in a distinct form the conditions necessary to be complied with, in order that these banks should have the full benefit of the present Bill, and he hoped that the right hon. Gentleman would on the present occasion state to the House what those conditions were.

MR. AYRTON

said, that he considered that the objections to the Bill were so serious that, were it not for the general desire which appeared to exist in the House that it should be read a second time, he would have felt bound to move that it be read a second time that day six months. The period had arrived when the attention of the House and the country should be called to the state of these savings banks, and more especially to the constitution of the Government Board which had attempted to undertake, but which had not really undertaken, the duty of watching over the funds of those institutions, for of all the Boards ever constituted by Parliament none had exhibited such an entire absence of all those qualities which might be expected from a public body. Many Members might be aware of the large deficiencies which had been brought under the notice of the House by an hon. Gentleman opposite (Sir H. Willoughby) on a previous occasion; but perhaps few had taken the trouble to inquire into the cause of that deficiency, and for his own part he could say that when he came to inquire into the cause he had been startled at the neglect which had been exhibited by Commissioners in keeping these banks on such a footing. Savings banks were first established in the year 1817, and the Parliament of that day had begun upon the erroneous principle of allowing the depositors a larger rate of interest than the funds in the hands of the Commissioners could produce. It soon became manifest that there was a considerable deficiency between the interest which the Commissioners received and that which they allowed, and in the course of a few years that deficiency amounted to no less than £588,216. In the year 1828 the Commissioners had thought fit to bring the subject under the notice of the House of Commons, and the rate of interest allowed by the Commissioners was then reduced to £3 16s. per cent. It soon appeared, however, that from various causes it was impossible to pay that rate of interest without incurring a loss, and in 1843 the deficiency had amounted to no less than £2,171,192. Another attempt was then made to meet the difficulty by reducing the rate of interest to £3 5s. At that time it would have been possible by proper investments to obtain a rate of interest sufficient to pay the depositors and leave a surplus, but the Commissioners did not examine fully into the circumstances of the times, and they having retained some of the funds at the old rate of interest, the investments which they made did not return a sufficient rate of interest to pay the depositors, so that the deficiency had gone on accumulating, until, in 1855, it amounted to £2,962,000, which might be looked upon as a capital debt. Such had been the results of the dealings with regard to interest, but the dealings with the capital fund had been no less unsatisfactory. In 1817 there had been a surplus of nominal capital of £232,550. In 1827 the surplus of nominal capital was £1,291,170. In the year 1828 the Commissioners obtained power to invest the capital in Exchequer bills, and in 1843 the surplus of nominal capital had been reduced to£135,480, and the deficit since 1843 had been £1,680,000, the total result being that there was a deficiency from 1843 to 1855 of £1,000,000. Such had been the result of the management of these banks by the Commissioners; and the very serious question then arose as to whether they were fit to be trusted with the management of the affairs of the savings banks, and certainly it was a marvellous thing that they should have managed in twelve years to create a deficiency of £1,000,000. Even since 1855 the management of the Commissioners had not in any degree improved, and it certainly had not been calculated to increase the confidence of the public. What had been the nature of the dealings of the Commissions since 1855 was seen from a return which had been laid upon the table of the House, and certainly it was entirely at variance with what he had always understood to be the mode of dealing with regard to investments. He found that in July, 1854, the funds were at 91; in December they had fallen to 87, and then the Commissioners sold to the extent of nearly half a million of money. No doubt the Chancellor of the Exchequer might have seen things in a different light from the public, and from what he knew of the state of affairs, might have anticipated a further fall; but certainly no further fall occurred. On the contrary, a turn took place; the funds rose to 89, without any impression prevailing that they were likely to sink again, or that they were likely to remain so low. They sold £1,200,000 and £470,000 of new three per cents. The money was applied in purchasing Exchequer bills, and the result was a loss of 12 or 13 per cent. It was by such means as that that from time to time, up to the present day, a sum of £1,200,000 had been lost to the public. It might be contended that the money had been laid out for the benefit of the country; but the question then arose whether it ought not to have been kept apart as a guarantee for the amount deposited in the savings banks, and whether it was ever meant to be placed at the disposal of a body of Commissioners, to be made use of, perhaps, in order to prop up a system of finance which might otherwise have failed, because it had not been based upon sound and legitimate principles? Now, his first objection to the Bill under the notice of the House was, that it did not deal with the important question whether those Commissioners were to be allowed to use the capital of the savings banks without making effectual provision for the annual interest due to the depositors. That, however, was not his only objection to the measure. The Bill was put forward as affording a guarantee to depositors and the opportunity had been taken of introducing a new principle. He was also opposed to it, therefore, upon the ground that it proposed to establish Government savings banks throughout the country—a proposition which he regarded as pernicious in principle and calculated to be still more pernicious in its effects. He felt bound to protest against the Bill as one of a series the tendency of which was to increase the control of the Government over the action of the people. If the House was prepared to legislate in that direction, if it was prepared to do the business of stockbroker for the public he did not see why the principle should not be carried still further, and why the sale of bread should not, as at Paris, be regulated by means of a Government agency. The Bill was, in fact, in principle a measure of the purest Socialist character, and, he having studied the works of the Socialist writers of France, must say that while he derived pleasure from the beauty of their composition he had become perfectly sensible to the necessity which existed for refusing to act upon the views which they advocated in any legislative measure in that House. Their idea was that it was the duty of a Government to discharge every function for the people which they imagined could, by the aid of a certain machinery, be better performed than each individual could accomplish it for himself. Before the Parliament of this country embarked upon such a course they ought, in his opinion, to be well satisfied that an imperious necessity for its adoption prevailed. No such necessity, he must contend, existed in the present instance. So far as his experience went, savings banks were in the greater number of instances most efficiently managed by the aid of the local gentry, and the principle of that management was one which he should be delighted to see encouraged. There was, in his opinion, nothing more conducive to bind the humbler to the more influential and wealthy classes than a system of that nature, and he could conceive no course more calculated to destroy that sympathy which it was so desirable to see prevail between the higher and the lower classes than that by which the free action of the gentry should be superseded by a stipendiary agency maintained out of the revenues of the State. Such a stipendiary agency it was proposed to establish under the operation of the Bill under discussion. It was simply a secondary feature of the measure, but it provided that banks now in existence might or might not accept the guarantee which was held out to them. Once having accepted that guarantee, however, they would be subject to such rules as the Government might deem it desirable to lay down, and the result would be a step in the direction of the system which obtained on the Continent, where every function of the community was usurped by what was called the civil service of the country. To any such system as that he for one was most strenuously opposed. [Cries of "Divide, divide!"] Some hon. Members, no doubt, objected to all comment which was adverse to the Government; but happily the location of those hon. Gentlemen in the House pretty clearly indicated the spirit by which their interruption was occasioned. There was, besides those which he had already mentioned, another most serious objection to the Bill. It was to be the manual of action for every man interested in managing the 600 savings banks in the country. Now, in legislating on this subject, the terms of legislation ought to be clear and precise, and the House ought not to accept a Bill which was not clear enough to be read in connection with existing Acts. In his opinion, therefore, before any great change in the law relating to savings banks was effected, those laws which were already in existence upon the subject ought to have been consolidated. Instead of that course having been taken, however, the Bill simply set forth that all the existing Acts should be deemed to be altered so far only as they were inconsistent with the present measure. Now, inasmuch as the various clauses of the existing Acts were extremely numerous it would require the exercise of no ordinary intelligence to ascertain how the law after the passing of the Act would really stand, and such he must maintain was not the mode in which a Bill dealing with a subject so important ought to be framed. He should be disposed to remit this Bill back to the Government in order that some of the clauses might be reconsidered, and the whole of the law on the subject of savings banks consolidated. Very few provisions would be sufficient to secure the depositors against loss. If an audit were necessary, the trustees and managers might be called upon to appoint a local auditor. It would be impossible, without an enormous expense, to send these stipendiary auditors about the country. A large staff of Government auditors would be required, and more money would be spent in their wanderings about the country than would be spent in the discharge of their duties upon the spot. What objection could there be to allowing the trustees of savings banks themselves to elect a Board in London for the purpose of taking charge of the aggregate funds of the banks? Such a Board would be greatly preferable to any Government Board. It would do everything that could be expected from a Government Board, and it would make the savings banks independent of the Government. At present, when the funds were high, the Chancellor of the Exchequer for the time being was tempted to tamper with the interest. The last time the funds were at par the Chancellor of the Exchequer proposed to reduce the interest to little more than £2 10s. per cent for the depositors. If, instead of being obliged to invest the savings banks money in Consols, such a Board as he had described were allowed a larger discretion, they might discover perfectly safe investments, which would enable them to allow an interest of probably three or four per cent. At present the depositors complained of the low rate of interest. If other hon. Members had appeared likely to support him he should have been inclined to move that the Bill be read a second time that day six months.

MR. M'CANN

said, that he believed that the public, who knew their own interests better than they were supposed to do, were unanimous in applauding the measure of the Chancellor of the Exchequer. He had seldom known a measure which had been received with such universal approval, and he trusted it would shortly pass into a law. He could by no means approve the scheme of the hon. and learned Gentleman to transfer the management of the funds of the savings banks to a body of gentlemen such as he had described.

SIR HARRY VERNEY

thought it reasonable, if the Government were to guarantee the depositors their money, that they should have the appointment or control of the officers of the banks. He did not, however, wish to see the House devolving upon others the powers of legislation which the House itself ought to exercise. Instead of giving the Comptroller of the National Debt and the Treasury the power to make rules, the House ought at once to embody the conditions in the Bill to which the deposits were to be subjected. The depositors in savings banks at present put their money in those institutions from their confidence in those trustees and managers whom they knew. It was to the interest of these institutions that they should do so, and great good was done by the advice given by these gentlemen to their servants, labourers, and dependents to invest their money in savings banks. He should like to see the whole question referred to a Select Committee. It would be said that it was desired thereby to defer the Bill for a year, but it was so important to legislate wisely on such a subject, that he should be happy to support a Motion for referring the Bill to a Select Committee.

MR. BARROW

said, that he quite agreed in what the hon. Member who spoke last had said, except when he expressed a wish to refer the Bill to a Select Committee. He thought the people ought to be fully made acquainted with the actual state of the law, and not left in any doubt on the subject. If any alterations were necessary, let them be made in the law, and be properly defined. The principle of the Bill was objectionable, for it transferred the power of making laws and regulations to an individual or a board. Now, he was unwilling to give any individual or any board such an arbitrary power, for the rules which would be made by these persons would be ex post facto laws, and would be so great an interference with the management, that he, although he had been a trustee for forty years, would be obliged to give up his connection with such institutions altogether. He thought the right hon. Gentleman ought to consider how many of the depositors would withdraw their deposits if this Bill passed. At all events, he could not give his assent to the Bill in its present shape.

MR. SOTHERON ESTCOURT

said, he would venture to put the question in another shape. Let the depositor be consulted. Take him under the old Act of Parliament which did not give him any security for his savings, and then let him be asked whether his condition would be improved under a new law which did give him security. The new system would afford such a security, that under it the Government would be responsible for the last farthing of the deposits. If they were approaching this subject for the first time, the plan proposed by the Government might not, perhaps, be the most prudent that could be devised. They had, however, to deal with a practical difficulty; and what was that difficulty? Why, some thirty or forty years ago, a number of gentlemen established banks in various parts of the country for the savings of their poorer neighbours. After a certain time Parliament stepped in, and established certain regulations. If the trustees and managers, who now spoke in the names of the depositors, would engage to become personally responsible for all deposits entrusted to them, he would rather have their responsibility than have a law which put these banks under Government. Centralization was, no doubt, the chief object of this measure; but could they avoid this when the practical difficulty they had to deal with was, the want of any solid security for the poor depositor. It was all very well to condemn Government interference; but what had been their experience without it? Had there never been such a thing as a defalcation in savings banks? Had they never heard of Rochdale or Dublin? He had a return which he had moved for, and he found that there were eleven savings banks in which there had been defalcations within the last five or six years. Now, any gentleman who looked into this matter would find that these defalcations arose, for the most part, through the roguery of some officer in whom the most implicit confidence had been placed, and whose integrity was supposed to have been tested by long service. There was actually a case in which an officer absconded at the very time when a correspondence was pending between the managers of the savings bank and the National Debt Commissioners, with a view to procure for him an additional gratuity for his long and faithful services. But that was not all. These defalcations took place, for the most part, in banks the books of which were the best kept, where there was the least appearance of fraud, and where the managers thought they had had, year after year, a most complete and satisfactory audit. The books of the Rochdale bank were allowed by the actuary sent down from London to inspect them to be well kept, and its audit to be satisfactory; but, in consequence of the nature of the business transacted, the most praiseworthy efforts of the local managers failed, under the present law, to insure a perfect audit. He was sorry to see the strong feeling that had been manifested against the Bill by hon. gentlemen who had been managers of these institutions in the country. He trusted they would recollect that, let them be as good managers as they pleased, they could not keep up an efficient superintendence. Each manager took only one day in one week; he served for a year, and was then discharged from his duty. The next manager could know nothing but what was told him by the actuary. He thought that the law of savings banks, as at present established in this country, was a disgrace to Parliament. He had been in Parliament more than twenty years, and in almost every one of those twenty years defalcations had taken place, and the Government was constantly applied to for a remedy in the name of the industrious classes. The working classes had thought that Government provided them a security, and nothing but repeated acts of insolvency had at last disabused them on this subject. What was their remedy? They must either let the gentlemen in the country who managed these banks give the security, or they must leave the matter in the hands of the Government. There were two parties interested—one the poor man, the other the Government. He was for from agreeing with the censure that had been cast on this Bill. So far from fearing that the interference of Government under this Bill would be too great, his only apprehension was lest the Government did not arm itself with sufficient power. Government was about to take on itself a great responsibility, in undertaking to repay the depositors to the last farthing all they put in the savings banks. It would require very cautious inspection; and he did not know whether the right hon. Gentleman had reserved to himself sufficient power of interference. But what fear need any manager in the country, or any actuary who carried on the affairs of a bank honestly, from the, interference of Government, which would have enough to do in looking after really suspicious cases, to think about meddling vexatiously with banks conducted on tolerably sound principles? For his part, he looked on the Bill as a boon to the poor, as giving a sure guarantee in the place of that which was now a mere sham. If they faltered in carrying this Bill into execution, if they did not give security, how did they know but that the depositors, their attention having been called to the subject, learning that Government was not bound, and that the trustees were not bound, would withdraw their money, and cease to have confidence, not only in the Government, but in Parliament. It was because he earnestly wished that this Session would not pass without a Government Savings Bank Bill becoming law, that he hoped the right hon. Gentleman would persevere with this Bill; but, even if this Bill did pass, he joined his voice with that of others in entreating the Government, after giving to the poor man the guarantee which he did not now possess, to give to the public generally more accurate information on the subject, a more clear account of how the money had been applied, and how the great difference between the money paid in and the assets to meet it, and which was called a deficit, had arisen. That information ought to be given, if only for the purpose of showing the groundlessness of those suspicious observations which had been made against this Bill; and therefore, though he heartily concurred in giving his voice for the second reading, he joined with other hon. Gentlemen in entreating the Government to give them a Select Committee, not in order to shelve the Bill for the Session, but next year, for the purpose of assisting the Government, and giving to the public that information which they ought to have.

MR. ATHERTON

said, however various the opinions of hon. Members might be as to this Bill, there could be but one opinion as to its importance. It concerned the interest of so vast a number of their fellow-subjects that he was quite sure that House—the poor man's House—would grudge no time in considering it, with a view to frame such a Bill as would attain the object they desired. He objected to certain portions of the present Bill, but, as he was anxious that it should become law, he would heartily vote for its second reading, and endeavour to amend it in Committee. The savings bank was the poor man's bank, managed by volunteers from the wealthier classes, and he apprehended, therefore, that in any legislative action on this matter there were two parties to consider—the depositor on the one hand, and the manager on the other. His objection to the Bill in its present shape was twofold, for it appeared to him to endanger the stability, the perpetuation, the efficacy of these establishments in each of these two respects. First, with regard to the depositor himself. They must always bear in mind that there was no compulsion on any man, rich or poor, to deposit his money in the hands of any other man. The 11th clause of the Bill made it incumbent on the depositor to take his book from time to time to the bank for the purpose of inspection find comparison by a Government officer. No objection could be made to the most ample opportunity being given to the depositor to avail himself of the security which the comparison of his book with the books of the establishment conferred; but when they bore in mind the comparatively small sums which stood in the names of the respective depositors, and the distance at which many of them lived from the bank, it struck him that the clause in its present compulsory shape would deprive many well-meaning persons of the advantage to be derived from these institutions. The next reason why he apprehended that the Bill as it stood would endanger the existence of those banks was, that there was a general impression amongst the managers that the interference authorized by the present Bill went beyond what the necessity of the case required, and if it passed in its present shape many gentlemen in different parts of the country, whose support was required for the continuance of these banks, would withdraw from them. He agreed with those hon. Gentlemen who thought that the Bill in its present shape, as well as the whole matter, should be referred to a Select Committee. It would be in the memory of many who were Members of the late House that a cognate matter—the Friendly Societies Bill—was referred to a Select Committee, and he was happy to say that the results of the labours of that Committee, in legislation, had been most satisfactory, so satisfactory that he could not but think that in a matter like this the better course would be to refer it to a Select Committee, even if so doing did shelve the Bill for the present Session, because he felt that in a matter which so much interested the working classes every care should be taken to legislate as perfectly and satisfactorily as possible.

MR. HENLEY

said, the hon. Member for Wiltshire (Mr. S. Estcourt) had omitted to show in any one particular how this Bill would remedy the defects in the existing savings banks [Mr. S. ESTCOURT I alluded to the proposed Government security.] But the hon. Member had stated as emphatically as possible, that every effort which the Government might make to ascertain whether a savings bank was solvent or lint would fail. And the hon. Member gave the true reason—that they could not get in the books of the depositors. The Bill before the House was intended to make the audit perfect, but it did not point out how that was to be done. The hon. Member, who was, no doubt, well affected towards the Bill, said that it did not contain powers enough, and did not go far enough; but the people who were to be subjected to its operation were anxious to know what was the nature of the powers which the Government had already asked for with reference to savings banks. By what means did they propose to ascertain the solvency of a savings bank? The public bad a right to know on the face of the Bill what the regulations were which the Government meant to impose. He (Mr. Henley) could understand the of his hon. Friend the Member for South Wiltshire, that ii would be better for the Government to take these things into their own hands, and employ their own agents to go about the country to carry out their own regulations; but he could not understand how they should say to institutions already established with staffs of their own that they were to be governed entirely by a new code of arbitrary rules. The question was one of great difficulty. Depositors could not be made to bring in their books; and therefore the solvency of any savings bank could only be approximated. There might be 75 or 80 per cent of the depositors' books brought in annually, and it was only from those which were so brought in that the solvency of the bank could be judged. The country, therefore, had all the greater right to know what were the regulations to be proposed by the Government, and how they meant to get a better audit than that which already existed. It was no trifling matter to create distrust among the depositors of savings banks; and he (Mr. Henley) could not conceive how, with the subject before them for two or three years, the Government and those who managed the national debt—for they were the real parties who bad the scheme in hand—should not have laid the knowledge they possessed on the subject before the House. If they had no scheme in all that time, then he (Mr. Henley) had a right to assume that the Government were about to make an experiment to the manifest inconvenience of all parties. He would not oppose the Bill if the Government put on the face of it the conditions which they intended to propose for the regulation of savings banks, but he would in Committee give it his best assistance. But if they did not, he would oppose the measure until at least the House was made better acquainted with it than they were at present. He did not object to the nature of the Bill, but to the absence of that information which it was necessary to have on the subject.

COLONEL SYKES

said, he wished to call the attention of the House to the resolutions of a meeting of managers of savings banks recently held at Huddersfield, which involved suggestions of great importance. They stated that, according to the last general balance sheet of the whole of the savings banks in the United Kingdom, and which was made up to the 26th November, 1856, there was, as between the liabilities of the savings banks of the United Kingdom and their assets, a deficiency in the latter to the extent of £5,201,458 8s. 3d., for which the Government was responsible, and the causes of the deficiency should be ascertained. The meeting in question recommended that the deposits in savings banks should be employed for the interest of the depositors only, and should be kept apart from every other branch of the public service; that, inasmuch as during the last seven years there had been a constant deposit of upwards of £30,000,000, it was desirable that half that sum at least should be lent out on landed security to pay the depositors 3½ and 4 per cent., instead of 3 percent., the present interest on their money. There were several other suggestions which might fairly be considered by a Select Committee, but which could not be advantageously discussed in a Committee of the House. The proportion of failures to the entire number of savings banks in forty years was very small, namely, eleven in 584. There was not any necessity, therefore, for hasty legislation on account of the present insecurity of the savings banks. The interests of the Government, as well as those of the working classes, were involved in the proposed Bill, and he should consider it his duty, when the Order for going into Committee was read, to divide the House on the question that it be referred to a Select Committee.

SIR HENRY WILLOUGHBY

apprehended nothing but evil from the operation of the Bill as it at present stood. He thought the preamble was quite untrue. It stated that there had been considerable losses to the depositors, but the fact was that only eleven banks had failed, in ten of which there had been no loss to the depositors; for the trustees and managers had made up the defalcations by voluntary subscriptions. In the case of Newport there had been a considerable defalcation, but 17s. 8½d. in the pound had been ultimately paid, and there was still a small balance in hand. These facts spoke volumes for the integrity of the country and the character of the trustees. In fact, the defalcations of all the savings banks of the kingdom did not amount to a farthing in the pound on the deposits since the year 1817. Such losses certainly did not justify the remodelling of the whole system. There had been one serious case of loss—that of the Cuffe Street Bank, in Dublin, but that arose entirely from the proceedings of the officers of the National Debt Office, who went on year after year registering a defalcation, and allowed the bank to go on, knowing that it was not solvent. The defalcations beginning with £4,000 had ended with £64,000, while its assets were only £94, and the taxpayers of the kingdom had paid a fine of £32,000, for the neglect, out of the public Exchequer. It was proposed that the Commissioners for the Reduction of the National Debt should have the management of all the savings banks in the country. Now, who were these Commissioners? Did they exist as a body? Why, they had long since ceased to exist as an active Commission. They never met now. If, as he supposed, the Chancellor of the Exchequer was the Commission, why not put him into the Bill eo nomine, and then you would come to the real state of the case? But ought the Chancellor of the Exchequer to have the power of establishing these banks throughout the whole kingdom wherever he pleased? Let the House consider the present position of things. It was now avowed that £35,500,000 of money was a fund which might be jobbed by the Chancellor of the Exchequer. The right hon. Gentleman did not conceal the fact at all. Surely, however, it was a monstrous proposition that the Chancellor of the Exchequer at his own sole will and pleasure should buy and sell any amount of stock, operate at any time on the market with a view, as he said, to prevent injurious depression, and, in fact, become a regular stock-jobber. In all the eight statutes which had passed on this subject there was no mention of the Chancellor of the Exchequer, and it never entered into the mind of the Legislature to hand over the administration of the fund to that official. He trusted that the House would be cautious how it legislated upon this question. The depositors were becoming alive to the principle involved, and many of the trustees and managers would, he believed, immediately resign their offices if this Bill passed. These gentlemen knew what it was to be troubled, and teased, and pestered by officials from a department in London; they knew that the operation of the Bill would be disagreeable to them, and, perhaps, disastrous to the interests of the depositors. It was on these grounds that wishing well to savings banks in this country, he entreated the House to take care lest they destroyed these institutions, for he really believed there was serious danger of such a result if they passed this measure. He objected to the Bill, because it dealt in sham names, and attached responsibility to a body which had no real existence, instead of imposing it upon some one whose position was clearly defined and who could easily be got at. Another objection was that the conditions for the regulation of these banks were not clearly laid down, the result of which would virtually be to intrust legislative power to subordinate officials, He would not, as he had intended, move that the Bill be read a second time that day six months, but he trusted some hon. Member would move to refer the Bill to a Select Committee.

MR. GLYN

said, he was not one of those who thought it necessary to refer this Bill to a Select Committee. He had received numerous communications from various parts of the country concerning it, and speaking on behalf of the depositors, he maintained that the principle of the measure received the general sanction of that body of persons, for they were very anxious to receive the security of the Government. He agreed with the right hon. Gentleman (Mr. Henley) in the difficulty of the question relative to trustees and ma- nagers, but the House was bound to consider that the Chancellor of the Exchequer had shown every desire to meet the requirements of those individuals. The right hon. Gentleman had also stated that he was willing to lay on the table the regulations under which the savings banks were to be conducted. Now, if the right hon. Gentleman did that when the Bill was in Committee, every objection arising out of this point would be answered. At the same time he (Mr. Glyn) confessed that the Bill did not carry out all the objects which he thought ought to be carried out. In his opinion, the existence of a deficit of £5,000,000, as shown in the account connected with these savings banks, was positively disgraceful to the country. This question, however, was not necessarily mixed up with the present Bill; it must be considered by itself. He did not think the Treasury should he altogether tied down as to the amount of funds of this description left in its hands, for they might be used advantageously for the public; but he thought Parliament was to blame for the lax way in which it had allowed the power given to the Treasury to be employed. He thought that the Commissioners should every year report the operations on which they had engaged, and their reasons for entering into them; that these Reports should be laid before that House, and then it would be in the power of Parliament to impose, if it was necessary, a check. He approved the Bill before the House, and thought it would be for the interest of the country that no delay should dike place in passing it into a law.

MR. MAGUIRE

said, there was a general opinion in Ireland in favour of this Bill, for the people wanted Government security instead of no security. In reference to audits of banks, he had to say that there was an excellent system in the Cork Savings Bank, and that when that bank was closed eight times annually, the officers were able to ascertain the state of the bank to a single farthing, and he advised the Government to put themselves in communication with the managers of that bank. For his own part, he was willing to allow the Government a little tyranny if it would only preserve the property of honest labour from the hands of rascally officials.

THE CHANCELLOR OF THE EXCHEQUER

said, that the object he had exclusively in view in proposing this Bill to the House was the interest of the depositors in savings banks. It had been admitted on all hands that, for many years, the present state of the law on the subject was not satisfactory. Several Bills had in successive years been brought under the consideration of the House, but no one had hitherto been so successful as to obtain its assent. Nevertheless, it was an admitted fact that the state of the law was unsatisfactory; that the responsibility of managers and trustees for the deposits which once existed had ceased; that no other guarantee had been substituted for it, and chat loss had in many cases accrued to depositors. In that state of things he felt it his duty to propose this measure to the House. Unquestionably he had no thought of interfering with the legitimate influence of managers and trustees, or of diminishing those useful labours which they had for so many years exercised in their respective establishments; but, for the purpose of guarding, not the interests of the Government, but the interests of the Exchequer, he had felt it his duty to propose a certain control over the paid officers of these establishments. The power thus taken was embodied in the third and fourth sections of the Bill now before the House, and it had undergone revision with the view of reducing it to such an amount as should be sufficient for the protection of the country. The hon. Member for the Tower Hamlets (Mr. Ayrton), who spoke at length against the Bill, raised up a man of straw which it was not very difficult to demolish. In the first place, he stated that the Bill created a number of stipendiary officers under the absolute control of the Government; but if he referred to the clauses of the Bill he would find that the Government had not the power of appointing any of the local officers of savings banks. That power was expressly reserved to managers and trustees, and the only officers the Government took the power to appoint were the auditors, who were not local officer at all. That was one essential misconception as to the intentions of this measure. The hon. Member further overlooked the fact that this was not a compulsory but a voluntary measure, and that it did not interfere with any existing bank. No existing bank that objected to the provisions of this Bill was bound in any way to come under its provisions, so that any bank now existing might, if it thought fit, continue as at present, without the slightest reference to the Government or the inspection of the Comptroller General, even if the Bill should become law exactly as it now stood. Much has been said of the financial part of the question, which was not necessarily involved in the measure before the House, and whatever objection might be made to the management of savings-banks money would equally apply if this Bill was not proposed. He did not think it necessary at that hour to follow the hon. Member through all the figures he had quoted. He would only say that if this Bill became law he would be prepared on a future occasion to offer the fullest information on the subject that could be desired, and to submit the whole of the management of the savings-banks money to the investigation of a Select Committee. He wished to remark, however, that the chief part of the deficiency which appeared in the accounts of savings banks had arisen from money being over credited to the banks—that was to say, it had arisen from the banks having received more money than they had paid in, and not from the variations of securities made by successive Governments. He did not know how the hon. Gentleman arrived at the conclusion that about £1,000,000 had been lost by variations in the securities, but according to his (the Chancellor of the Exchequer's) calculations less than half the sum would be nearer the mark. He wished to advert to one point alluded to by the right hon. Gentleman the Member for Oxfordshire—namely, the conditions on which a bank would be admitted to the benefits of this Bill, as these were now defined. He did not apprehend that any further definition would be necessary; but, with regard to the regulations contemplated by the second section, these related to a matter which represented the actual difficulties of this measure. The right hon. Gentleman asked, first, whether, if he had not matured such regulations, he was not proposing a measure blindly; and, in the second place, whether, if he had matured them, he was prepared to produce them to the House? Now he had not proceeded blindly, as he had prepared a set of regulations which had already been submitted to some of the most experienced actuaries and officers of savings banks. It was his wish in framing regulations to act on the advice of those who possessed the greatest experience. Nothing was further from his intention than to interfere with the management of well-conducted banks—such as that of Manchester, alluded to by the hon. Mem- ber for that town, who had addressed the House: nor was he disposed to give any arbitrary powers to the Government; but the difficulty was, that some banks were well managed, and some less well managed; some were large and some small, and it was no easy matter to frame such a set of regulations as could be made applicable to all. If a set of regulations were inserted in the schedule of the Bill they would be beyond the power of alteration, and great difficulty and disadvantage might arise from attempting to apply an inflexible rule to the varying circumstances of so many different savings banks. That was the reason for not embodying those regulations in the Bill. He should wish to see the power now held by the trustees and managers of well-conducted savings banks exercised as it had hitherto been; but he did not feel justified in proposing any measure making the Public Revenue responsible for a large amount of deposits without assuming such a control as would prevent the placing of so great a portion of the public income annually in serious jeopardy. With this explanation he trusted that the House would read the Bill a second time.

Bill read 2°, and committed for Monday next.