SAVINGS BANKS ACTS.—COMMITTEE. (Hansard, 27 March 1863)

§ THE CHANCELLOR OF THE EXCHEQUER
rose to move a Resolution with a view to founding a Bill thereupon. The object of the Bill which he proposed to introduce was to some extent identical with a Bill which had been only partly adopted in a former Session; he had now endeavoured to avoid giving rise to differences of opinion that were formerly mooted. One object of the measure was to extend the principle of the conversion of perpetual into terminable annuities to a further extent than it had yet been carried. At present the amount paid annually for terminable annuities was £1,900,000, part of which was interest and part repayment of capital. It might he said that about £1,000,000 was paid every year towards the reduction of the National Debt. In the year 1867 a portion of the terminable annuities, to the amount of £585,000, would cease. The operation of the Post Office Savings Banks Act was to convert a proportion, not exceeding one-sixth, of the stock purchased for those savings hanks into the form of terminable annuities. He 103 proposed to apply the same principle to the old savings banks. He asked Parliament to give power to convert four millions of 3 per cent stock into terminable annuities of 1885. The effect of the measure would be to add £120,000 a year to the present charge for the National Debt, with a view to the relief to be obtained by the extinction of so much of the capital within a limited period. The next enactment in the proposed Bill would be to convert £24,000,000 of the savings banks money into a passive charge, resembling the debt now due to the Bank. He also proposed to remedy an existing defect in the law relating to savings banks. Although at present there was no doubt of the moral, and to some extent the legal, liability of the State to repay to the trustees of savings banks all the money received from them with the interest accrued, yet the machinery for giving effect to that obligation did not exist. The value of stock in the hands of the Commissioners might not be sufficient to liquidate all their engagements. He proposed, that in case of a demand on account of the savings banks arising that could not be met out of the proceeds of the securities and the cash at the credit of the Commissioners, such deficiency should be a charge upon the whole Consolidated Fund—giving full security to the savings banks. Another provision in the Bill would authorize the Commissioners, whenever they might think it desirable, to meet any demands out of the cash in the Exchequer, instead of going into the market to sell stack, which, at a time when the price was low, was a disadvantageous operation with a forced sale.

§ SIR HENRY WILLOUGHBY
said, as far as he understood the scheme of the right lion. Gentleman, one portion seemed very good, and another somewhat doubtful. The Committee was dealing with a very large sum, and he wished to know what 104 the amount of interest would be. He apprehended that the very first principle in dealing with terminable annuities was that the capital should be reinvested in some form or other, otherwise the danger of spending capital as income was incurred. There could not be a question of the prudence of recognising by statute the claims of the savings banks to repayments in full at the hands of the Commissioners of the National Debt.

§ MR. AYRTON
said, persons throughout the country were extremely sensitive about the right to receive back the money deposited with the Commissioners of the National Debt. In such an extraordinary emergency as the funds at the disposal of the Commissioners proving insufficient to meet all the claims upon them, there could be no doubt that Parliament would make good the deficiency; but he was anxious to know how the fund could be rendered available if there should happen to be a run upon them.

MR. LYGON
understood the Bill to apply to all past operations, but wished to know whether it would apply to any deficiency to be created hereafter. If so, that Would open a very wide question.

§ THE CHANCELLOR OF THE EXCHEQUER
held, that there could be no doubt of the right of trustees of savings banks to receive back from the State every farthing they had paid; but there was all the difference in the world between a right to receive payment and provision of the machinery for making that payment. As to the apprehension of future deficits, he reminded the Committee that by the Act of 1861 security had been taken that any operation in which a Finance Minister might engage for any public purpose must come under the review of Parliament before it could take effect. Until 1861 the Chancellor of the Exchequer had the power of refunding Exchequer Bills. Now, all that power was taken away from him, and the Chancellor of the Exchequer must submit himself to the judgment of Parliament with regard to any of these financial operations.

§ SIR HENRY WILLOUGHBY
thought, it would be better to place this power in the hands of the Commissioners of the Treasury, who were well known and responsible to the House, than in the hands of an ex-officio body like that of the Commissioners for the Reduction of the National Debt.

§ THE CHANCELLOR OF THE EXCHEQUER
admitted that that question might 105 very fairly be debated hereafter, separately from the Bill.