§ Clause 1 (Limit of annual amount of deposit).
§ MR. RAIKES
I now propose, in accordance with the engagement I have given, to strike out this clause, by which it was proposed to raise the amount which any person could deposit during one year in a Post Office Savings Bank from £30 to £50. For reasons which I explained on the second reading the Government have determined not to proceed with this clause. I say it with 815 some regret, for I think it would be a valuable provision in our Savings Bank Law that a clause like this should find a place. But difficulties have arisen with regard to the position of Trustee Savings Banks, some hon. Members being desirous of extending the operation of the clause to Trustee Savings Banks, and others offering opposition to that course. Under the circumstances, it appears to us better to strike out the clause now, leaving the point for further discussion in connection with a larger scheme. It would jeopardize the progress of the Bill for the Government to insist on passing the clause in its present form limited to Post Office Savings Banks. I believe the House is anxious, without exception, to make the Bill law, and will allow us to abandon the clause; though I hope, in a future Session, it will again come up for consideration under more favourable circumstances.
§ Motion made, and Question proposed, "That Clause 1 stand part of the Bill."—(Mr. Raikes.)
§ MR. BARTLEY (Islington, N.)
I hope the proposal of the right hon. Gentleman will not be agreed to. It seems to me that the clause should be retained in the Bill, and I cannot see any reason against it. I hope the Government will allow us to consider the question on its merits. It is said the clause would only affect 1 per cent of the depositors in the Savings Banks, and I believe this is true; but it means some 40,000 persons, and these 40,000 of the best of the artizan class who are striving by industry and thrift to raise themselves in the social scale. No class is more worthy the consideration of Parliament, and the only thing this clause does is to enable that class to increase their yearly deposits from £30 to £50. It is used as an objection that many persons pay in £30 in one day; and, therefore, these are rich persons for whom the Banks were not supposed to provide. But this only shows that those who make this objection do not know the habits of the people. They put in the £30 in one lump sum, because, having already paid to the Post Office Savings Bank their yearly maximum, they have laid up the money at home until the year is past, and then they deposit it in a lump sum. It is desirable that we should enable them to put the money in as the year goes on. I do not desire to 816 make an elaborate speech at this hour. The only objection comes from the bankers and the old Trustee Savings Banks; but, considering that the Government have had five or six months to consider the Bill and went carefully into this part of it, I do not think it is reasonable to give way simply because the bankers wish it or because the Trustee Banks cannot have it as well. Banks are probably well able to take care of themselves, even if the clause did injure them in the slightest way, and I do not think we should place a check on the habit of thrift among the people for fear the business of a certain class may possibly be interfered with. But it is an utter mistake to suppose that the clause would damage the banks; it is an utter mistake to suppose that anything that will promote thrift among the people will be detrimental to the banking interest. It would be immeasurably to the advantage of ordinary banks that it should be competent for a man to accumulate £150 in three years instead of five—he will then be more eligible and more ready to open an account in an ordinary bank. I have had much to do with a savings bank for the people, and an institution that numbers 60,000 depositors, and our transactions are more numerous than many other banks combined, and I know that a great number of our depositors beginning to save their pence have learned the habit of saving, and in a few years have transferred their accounts to ordinary Joint Stock Banks. I do not hesitate to say that the great prosperity of the banking interest in the last 15 or 20 years may be largely attributed to the progress of Post Office Savings Banks, and the habits of banking which they have inculcated among the masses of the people. When these were started it was said that banks would be ruined, and that people would not use ordinary banks as they had been accustomed to do; but, as a matter of fact, though the Post Office holds some £50,000,000 of savings, Joint Stock Banks are doing a greater business, and have been more prosperous since the savings banks were established. I do not wish to enter at length into this subject. I will only appeal to the Government to allow Members on this side, who, perhaps, are not quite so independent in their position as some who sit below the Gangway, to 817 vote on this question as they think proper. It is a matter, I think, upon which independent judgment should be used. It is not a Party question; it is entirely a working man's question; and inasmuch as the Government brought in the clause a week or two ago I do not think they should use their influence to prevent hon. Members who have pledged themselves to their constituents from voting as they think the merit of the question demands. I am sure if hon. Members vote without restraint the clause will be retained in the Bill.
§ MR. BROADHURST (Nottingham, W.)
Just a few words to say how deeply I regret the action of the Government in withdrawing this clause. A recommendation which only a few years back we carried through Committee was to give depositors the right of depositing £100 in the year, and the proposal in this Bill is to allow the very moderate sum of £50. But the Government runs down its flag without engaging the enemy on the first indication of attack from the handful of bankers in the House. It is the most lamentable exhibition of weakness I have seen in my Parliamentary experience. At least they might have gone to a Division in defence of their principle. As the hon. Gentleman the Member for North Islington (Mr. Bartley) very fairly said, this is absolutely a working man's question. Post Office Savings Banks have done more to encourage habits of thrift than any other institution set up in the nation; and why the Government should seek to limit the good they are doing—why they should go back upon the advance they proposed to make—is what I cannot understand at all. I am sure they must themselves be conscious that they are betraying the interest of the thrifty artizan class in the country when they refuse to give Government security for the care of hard-earned savings. The present limit is most detrimental to the cause of thrift. It is a frequent thing for the working classes to lend one to the other sums of money to meet times of difficulty or cases of emergency that may arise; and, this money drawn out from their savings being returned again, they are precluded from depositing it again in the only bank at their disposal within the year, so the money remains at home, and there is the temptation to dispose of in less de- 818 sirable ways. The hon. Gentleman estimated that 1 per cent of depositors are inconvenienced by the present limit; but I say no man can tell what percentage is affected. I should say that 10 per cent would be much nearer than 1 per cent to the number of people who feel the inconvenience of the £30 limit. With regard to the action of the banks, I cannot imagine a more short-sighted policy. It is perfectly well known that every man who has made a fortune in this country laid the foundation of it by small savings, and the Post Office Banks have been enormous feeders of the great banking concerns of the country. I think, therefore, the banks are adopting a blundering policy opposed to their real interests. It is most regretable that the rich bankers of London and other parts of the country should be allowed to step in and say that the working classes shall not be encouraged to save more than £30 a-year in banks where their security can absolutely be relied on. The most important point in regard to the workman's savings is that he shall be enabled to invest them safely and by a ready means. Now, a Post Office Savings Bank is always at hand; it is perfectly safe; and surely we should give every possible encouragement to the working classes to take advantage of this great national institution.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)
I only wish to say one or two words in answer to the hon. Gentleman the Member for West Nottingham (Mr. Broadhurst), because I think he did not understand what I said before. I have already explained that the difficulty did not arise with the bankers, and the opposition of the bankers is not the consideration which led us to modify this clause. It was rather the movement made by the Trustee Savings Banks, which, though not standing in the same position as the Post Office Savings Bank, are entitled to some consideration. The Post Office Savings Bank was referred to by the hon. Member as if it afforded the only mode in which working men could invest their savings. It is the safest, I admit. But I do not think the Government could entirely disregard the representations which came from a body in many ways so representative of the working 819 classes as the Trustee Savings Banks, and the objections brought forward by that body were of considerable force. It was pointed out that hitherto they had been treated on the same footing as the Post Office Savings Bank. The difficulty we felt was that of including them in the operation of the £50 limit, and that was what led to the modification of the Government proposal. I hope that the House will discard the idea that it was in any way the opposition of the bankers which influenced us. It was not that at all. The second point to bear in mind is this—that if a man wishes to invest his savings on Government security through the Post Office Bank he is not confined within the £30 limit; but if he will do that which I believe the House desires him to do—namely, invest it in Consols, for which increased facilities are given by this Bill—he can not only put £30 in the Savings Bank, but he can invest a large amount beyond that in Consols, which are as safe as the Post Office Savings Bank, and this will increase largely the number of fundholders, which must prove a great advantage to this country. That being so, the restriction of the limit will not do the harm which my hon. Friend fears, and I am sure that his regret that a man cannot invest more than £30 a-year in Post Office Bank will be much modified if the working classes are induced, as this Bill seeks to induce them, to invest very considerably in Government Funds.
§ MR. SHAW LEFEVRE (Bradford, Central)
I have no intention to occupy the attention of the House at any length, the more so as the reasons given by the Government are such that I cannot see any force in them. It is true that, the Post Office and the Trustee Savings Banks have been treated in the same manner; but I must remind the House that there is already a grave inequality between them, as the Post Office Bank pays 2½ per cent, and the Trustee Savings Bank 2¾ per cent, per annum to depositors. And if there are reasons for not extending the benefits of the clause to the Trustee Banks, I really do not see why the limit should not be made £50 in the case of the Post Office Savings Bank. Every Postmaster General for the last 10 years has been strongly in favour of making this amendment, and I believe that my right hon. Friend the Member for Mid Lothian (Mr. W. E. 820 Gladstone) introduced a Bill in 1880 with this object. Another Bill with a like object was introduced by the late Mr. Fawcett in 1884, and I can positively state this—that successive Postmaster Generals have desired, in the interests of thrift among the working classes, to extend the limit in the manner originally proposed in this clause. I am unable to see the force of the argument with regard to investment in Funds. No doubt, the Bill will give greater facilities; but they will only apply to cases in which the money is already in the Savings Bank. As I understand it, it will not be open to working men gradually to invest in the Post Office Savings Bank until £30 is reached in one year, and to invest any sum beyond £30 in the Funds. He may, it is true, bring £30 or £50 to the Post Office and invest it there in Consols; but that is not what the working man wants. He wants to be allowed to gradually accumulate £50 in the Post Office Savings Bank, and then to invest it.
§ MR. SHAW LEFEVRE
Quite so; but still the limit will not let him put more than £30 in the Post Office Savings Bank in one year.
§ MR. SHAW LEFEVRE
No. I take it he may take £50 from the Post Office Savings Bank and invest it in the Funds; but he cannot accumulate it pound by pound, week by week, and get it invested. We want to increase the limit of gradual investment from £30 to £50, and I am unable to see what interest the banks have in objecting to that. I believe the working classes greatly desire it; and I also believe that nobody would be better pleased than the right hon. Gentleman the Postmaster General himself, if the House took the matter into its own hands and carried the clause as it stands.
§ SIR JOHN LUBBOCK (London University)
I hope that if the right hon. Gentleman the Postmaster General brings this matter forward on some future occasion he will, at least, do so at a more convenient hour, and at one at which it can be thoroughly discussed. I quite agree with my hon. Friend the 821 Member for West Nottingham (Mr. Broadhurst) that the bankers really have no interest in this matter. I speak for myself, and, I believe, for other bankers, when I say this.
§ MR. BROADHURST
I rise to a point of Order. I only wish to say this, that I have myself had telegrams from bankers in many places opposing it.
§ SIR JOHN LUBBOCK
The reason why we oppose it is entirely misunderstood. The hon. Member referred to large London bankers, and I can say for myself that, as far as I am concerned, the clause will not make the slightest difference to me as a banker. I am quite disposed to agree with my hon. Friend that the encouragement of thrift among the working classes is a benefit to bankers. But the difficulties I feel are of a totally different character. Let me remind the House of an article written by that great authority—Mr. Stanley Jevons—in which he pointed out a considerable danger to the public in receiving larger sums and then investing them in Government securities. That involves a great risk to the Government—a risk which, so long as the practice is confined to small sums, is infinitesimal. But it does exist, even though we have at least £3,500,000 from the Savings Bank. The general opinion of those who have looked into the matter is that if you increase the amount deposited in the savings bank and invested it in Government securities it would lead to loss, for money would be deposited when Consols are high, and would, perhaps, have to be sold when they are low. That is one objection we entertain. There is another, and a very serious one. The Trustee Savings Bank and the Post Office Savings Bank only do one part of the banker's business. Banking business consists of different parts. One is to collect funds paid into the bank, and the other—an equally important duty—is to lend money out to customers on favourable terms. But the result of these banks is to drain enormous sums from different localities in the counties, and to bring them up to London to be invested in Government securities. Already the amount is very nearly £100,000,000. This may be all very well in fair weather times; but if we have a great war you may find very serious difficulties arise; and if this 822 proposal is carried oat, that danger will be considerably increased. I maintain that savings banks have not been an unmixed benefit to this country. One effect has been to discourage the creation of workmen's banks and local banks, which would otherwise have been established. In Germany no fewer than 900 workmen's hanks have been established, and hold large sums of money. They have proved a great convenience and extremely useful to the community. Some years ago it was in contemplation to establish banks of this kind in this country; but it was found to be practically impossible, on account of the fact that the Government did so very much of the banking business. I have now pointed out several reasons which affect the whole community and not merely the banks. But there are dangers to which the banks, from the very nature of their business, are, perhaps, more alive than other people. The Post Office, perhaps not unnaturally, is anxious to extend its business in all directions. I have pointed out how to banking already certain injury has been done; but there are other directions also. For instance, the effect of the Government taking the telegraphs has been very much to discourage telephones. We believe it to be an undesirable thing for the Government to undertake business for the sake of profit. I think the right hon. Gentleman the Chancellor of the Exchequer has shown that the idea that this will in any way encourage thrift is quite a mistake, because, as he has already pointed out, there is nothing whatever to prevent the working classes investing their money in Consols if they choose to do so. Moreover, so far as the question of encouraging thrift goes I do not see that increasing the limit would make any difference at all. This is an attempt on the part of a great Government to engage in banking business on a large scale. If £50 had been suggested in the first place instead of £30, I may say for myself that a difference of £20 I should not have thought very material; but what is now felt is that this is merely the thin end of the wedge, and if we agree to go now from £30 to £50, we do so in face of the threat already made—if I may call it so—at any rate, in face of an intention on the part of the Post Office to try and extend the limit to £100 another 823 year. I do not wish to detain the Committee at this late hour; but we think there is great danger of the Government undertaking business merely for the sake of profit. Without going at greater length into these objections, I trust that my hon. Friend will see that we, as bankers, do not object to the proposal on the grounds he supposes, but that there are solid objections to the scheme. I trust, therefore, that the Committee will support the Government in the attitude it has taken up.
§ Question put.
§ The Committee divided:—Ayes 32; Noes 89: Majority 57.—(Div. List, No. 391.) [3.20 A.M.]
§ Clause 2 (Computation of amount deposited by depositor).
§ THE POSTMASTER GENERAL (Mr. RAIKES) (Cambridge University)
I propose that this clause be omitted. It refers to withdrawals, and raises very much the same principle as Clause 1, and I hope the Committee will deal wish it without further delay.
§ Motion made, and Question proposed, "That Clause 2 be omitted from the Bill."—(Mr. Raikes.)
§ MR. BARTLEY (Islington, N.)
In connection with this matter, I hope provision will be made in some part of the Bill that withdrawals made in order to purchase Consols will not be considered as deposits during the year within the meaning of the Bill—that is, that such deposits for investment in Consols shall not go towards the maximum allowed to be deposited in the year.
§ MR. RAIKES
I will see if I can put in any words later on to carry that out. I cannot frame them just now.
§ SIR ROBERT FOWLER (London)
I only rise to say that though I differ from my hon. Friend the Member for North Islington (Mr. Bartley) on this Bill, I hope the right hon. Gentleman the Postmaster General will consider the point he has just raised.
§ Question put, and agreed to.
§ Clause 3 (Extension of power of Postmaster General to make regulations for the Post Office Savings Banks).
On the Motion of Mr. RAIKES, the following Amendments made:—In page 3, line 2, at end, add:—
Provided that such regulations shall prohibit a person from being a depositor in both a
trustee and a post office savings bank, or from having two separate accounts in the post office savings bank, and shall require such declaration from a depositor as may be necessary for preventing his having such two accounts, and shall provide for the forfeiture, under the conditions specified in the regulations, of money due to the depositor in the event of such declaration being false;
line 2, after sub-section (1), insert—
The Treasury shall, from time to time, make, revoke, alter, or add to regulations for the purpose of extending to trustee savings banks any regulations made in pursuance of this Act with respect to post office savings banks so far as those regulations provide:—
line 3, leave out "said regulations," and insert "regulations made in pursuance of this Act;" line 21, leave out "post office;" line 23, leave out "said regulations," and insert "regulations under this Act;" line 35, leave out "Postmaster General and;" line 38, leave out sub-section (4).
§ Clause, as amended, agreed, to.
§ Clause 4 (Amendment of 43 & 44 Vict. c. 36, as to minimum sum of Stock to be invested).
§ On the Motion of Mr. RAIKES, the following Amendments made:—In page 3, line 41, leave out "by the Postmaster General;" page 4, line 1, leave out from "made," to "sin," in line 2; line 3, leave out from "substituted," to "for," in line 4.
§ Clause, as amended, agreed to.
§ Clauses 5 to 8, inclusive, agreed to.
§ Clause 9 (Repeal).
On the Motion of Mr. RAIKES the following Amendments made:—In page 5, leave out sub-section (1); line 20, after "regulations," insert "with respect to Post Office Savings Banks;" line 21, at end, add—
The Acts mentioned in the Third Schedule to this Act shall, to the extent in the third column of that Schedule mentioned, be repealed as from the date at which any regulations with
respect to Trustee Savings Banks made in pursuance of Part I. of this Act come into operation.
§ Clause, as amended, agreed to.
On the Motion of Mr. RAIKES, the following New Clause agreed to, and added to the Bill after Clause 3:—
(Laying of regulations before Parliament.)
The draft of all regulations proposed to be made in pursuance of this Act shall be laid before both Houses of Parliament for not less than forty days before they are made, and all such regulations when made shall come into operation at the time therein mentioned, and shall be binding on all persons as if they were enacted in this Act.
§ MR. WHITLEY (Liverpool, Everton)
I should like to move the insertion, after the words "all such regulations," of the words "whether Post Office or Trustee Savings Banks."
§ Amendment proposed, in line 3, after the words "all such regulations," to insert the words "whether Post Office or Trustee Savings."—(Mr. Whitley.)
§ Question proposed, "That those words be there inserted."
§ MR. RAIKES
I think, Sir, the words are hardly necessary. I think the clause as drafted will cover everything; but if my hon. Friend likes I will consider the point before Report. I shall be glad if he will withdraw the Amendment now.
§ Amendment, by leave, withdrawn.
§ Bill reported, with an amended Title; as amended, to be considered upon Thursday.