SECOND READING. (Hansard, 20 May 1862)

§ MR. AYRTON
said, that he had cooperated with the right hon. Gentleman opposite (Mr. S. Estcourt) in bringing forward the measure, the object of which was to give the best security they could to depositors short of a direct pecuniary guarantee on the part of the Government. The Bill sought to effect that object in two ways: first, by taking care that there should be an efficient body of managers, and by taking care also that those managers performed their duty in seeing that the officers of the bank brought the money paid in by the depositors to ac count. The measure had been intended 88 a boon to the managers of savings banks; but, unfortunately, some of these parties regarded it in the light rather of an obstruction than a benefit, and under those circumstances he was afraid he must re commend the right hon. Gentleman to withdraw it, because he felt it would be hopeless to attempt to pass a measure of this kind without the general sanction of the gentlemen concerned. In that event, however, a grave responsibility would rest on some one, for it was the bounden duty of the House to see that the law offered. every reasonable security to depositors, who were generally of a class ill able to form a sound opinion with regard to the minute details of the system. Unless the right hon. Gentleman succeeded in bringing in a Bill more generally acceptable, he thought it would be the duty of the Government to introduce a measure giving every reasonable security to depositors, though, of course, having savings banks of their own, they could not now be expected to give a pecuniary guarantee.

§ MR. SOTHERON ESTCOURT
said, he had brought in this Bill in connection with some hon. Friends, including his hon. and learned Friend who had just spoken, whose assistance he begged to acknowledge, believing that its operation would afford better security for depositors, and would also affect the managers of savings banks beneficially. He had, however, received within, the last few months numerous representations from managers and others in different parts of the country urging in some cases that the Bill was inapplicable to their particular circum stances, and in others alleging that, whether rightly or wrongly, great apprehensions as to its operation were entertained by managers and trustees. He should not have felt himself justified in assenting to the request which they all put forward that the Bill should be withdrawn for the present Session, if it were not that he had that very day received from an influential body of managers of savings banks, gentlemen of great experience and fully to be depended upon, an assurance, that if he consented to withdraw this Bill, they would endeavour to devise a Bill the provisions of which would, in their opinion, meet the requirements of their different establishments. On the other hand, he had assured those gentlemen, in the name of his hon. Friends as well as his own, that they could not accept any Bill until they were perfectly satisfied that its provisions would afford the requisite security to depositors. He cordially concurred with his hon. and learned Friend opposite in hoping that some measure might ultimately be devised which would have the effect of remedying the present very un satisfactory condition of the law. He trusted the Government would be induced to take charge of the question: but should they not do so, he would do his best to remove these small imperfections which still attached to the law of savings banks. Under these circumstances, he asked for leave to withdraw the Bill.

§ THE CHANCELLOR OF THE EXCHEQUER
said, he regretted very much that the labours of his right hon. Friend had not come to a different conclusion than had the labours of those who, with the advantages or disadvantages of official position, had previously attempted to deal with this subject. The question had been for a long time handled by those who had successively filled the office of Chancellor of the Exchequer, but who had. not succeeded in persuad- 1972 ing the Commissioners to adopt plans which they had framed in order to effect the security of the depositors. From them it had passed to the hands of his right hon. Friend, who had just now informed the House that he felt compelled to assent to the postponement of his labours; but that the subject would during the recess be in the hands of a considerable association or combination of managers of savings banks. Well, it was very desirable that managers should take their turn. On the part of the Government he would say, that if they could see their way to the attainment of an alteration of the law which promised to be a real improvement, they would not excuse themselves for the purpose of evading difficulties which might attend legislation on the subject. Undoubtedly the main question had been disposed of. They were now able to say to the people of England who were disposed to lay by their savings, with a moderate interest, and with a perfect security, the Government had provided some 3,000 places of deposit where those savings could be received, and where the security of the State was given for those deposits. There, therefore, was not the same urgency which formerly existed for an amendment in the law relating to savings banks. At the same time, it was known that there was a sum of £30,000,000 to £40,000,000 in the hands of the old savings banks, deposited by an immense number of persons on the security of the law; but which security was liable to be misunderstood. Hon. Members had no difficulty in distinguishing between Government liability to trustees and Government liability to depositors; but the distinction was not so readily comprehended by the depositors themselves, and he believed that the utmost vagueness of conception actually prevailed among the depositors on the point. In 1853 he proposed to introduce an agent independent of the local manager of the bank, who should be a party to every transaction of paying and receiving money; but it was undoubtedly open to the objection that it would entail some increase of expense in the management, and this must be regarded as a serious defect. He did not imagine that anything of so extensive a character would now be attempted. He confessed that he was somewhat discouraged at the momentary failure of his right hon. Friend, because he knew of no one who, from character and position, from the attention which he had given to 1973 the subject, and from the general possession of the confidence of the managers of savings banks, was so likely to bring the matter to a successful issue. He trusted that the right hon. Gentleman would pursue the course he had intimated his intention to take, and any representation which he might urge upon the Government, either during the Session or in the recess, would receive at his (the Chancellor of the Exchequer's) hands, should be have the honour to retain office, the best consideration, with an earnest desire to secure the prosperity of savings banks.

§ MR. H. A. HERBERT
fully concurred in all that had fallen from the Chancellor of the Exchequer as to the position and character of the right hon. Member for North Wiltshire and his peculiar ability and fitness for the task he had undertaken, and regretted the announcement he felt himself called upon to make. He trusted that the right hon. Gentleman would impress on the managers with whom he would come in contact the great responsibility which they had incurred by year after year defeating the attempts of successive Chancellors of the Exchequer to amend the law with regard to savings banks. The state of that law was most anomalous. It was not sufficient that any hon. Member should be able to say that these banks were generally well managed; but it was a disgrace to the country and to that House that any law should exist under which it was possible that such things should occur as the public were unfortunately familiar with—the failure of savings banks. These banks had been just sufficiently tampered with by Acts of Parliament to create an impression of absolute security, but the House had altogether neglected to take precautions to ensure that such belief was well founded.

MR. HENLEY
said, he could not say he regretted that his right hon. Friend had taken the course which he had done in this matter. It was very advisable that any measure to give security to depositors in the ordinary savings banks should, as far as possible, be taken with the consent of the persons who had the management of those banks, and he was not without hopes that this might be accomplished. This was a great point, and the delay might be advantageous if that desirable result could be obtained. He was not without hope, that if proper steps were taken, perfect security to the depo- 1974 sitors would be obtained. The measure which the Government had introduced for the establishment of Post Office Savings Banks had worked well, and afforded an opportunity of dealing with this question which had not existed before. The managers of very small banks on the old system, which could not afford the proper machinery for perfect management, ought to hand over their business to Post Office Savings Banks.

§ MR. DARBY GRIFFITH
expressed his concurrence in the remarks of the Chancellor of the Exchequer. He was glad to hear that the Post Office Savings Banks were working so well, and expressed his opinion that the Post Office Banks would ultimately swallow up all the old banks.