§ MR. HOWELL (Bethnal Green, N.E.)
asked Mr. Chancellor of the Exchequer, Whether the National Debt Commissioners paid interest on the sum of £160,000 standing to the credit of the Cardiff Trustee Savings Bank up to September 1886; whether the Trustees of that Bank refused to allow any interest to depositors after 20th November 1885, nearly a year previously; and whether the amount so received, as interest on deposits from the National Debt Commissioners, was devoted to partially replacing the deficiency caused by the frauds of the Actuary of the Cardiff Trustee Savings Bank? The hon. Gentleman also asked, Whether the sum of £3,081 5s. 7d. was paid from the National Exchequer as interest to Trustee Savings Banks over and above the interest accruing on the securities standing to their credit for the year ending 20th November 1885; whether a sum of £6,000, expended in managing the Trustee Savings Banks Accounts in the National Debt Office, was also paid from the funds of that Department; whether he will state the amount paid under the above heads for the year ending 20th November 1886; whether, in view of the absence of control over the application of such funds, eleemosynary grants from the National Exchequer to Trustee Savings Banks should be continued; and 879 whether the Government will introduce a measure which will so amend the Law as to guarantee to Trustee Savings Banks the interest legitimately accruing from the securities standing to their credit, and no more?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)
The National Debt Commissioners allowed interest on the sum of £160,000 up to September, 1886, as well as upon moneys remaining in their hands up to January, 1887, the date of the final withdrawal. The Trustees allowed no interest to their depositors after November 20, 1885. The amount of interest received by the Trustees from the National Debt Commissioners between November 20, 1885, and January, 1887, was £4,543, the bulk of which would have been payable to the depositors but for the action taken by the Trustees in stopping interest after November 20, 1885. The amount of interest thus credited to the Trustees was, therefore, applied to the partial reduction of the deficiency caused by the frauds. The National Debt Commissioners were not aware that interest to the depositors had been stopped until January 17, 1887, after the last moneys at interest had been withdrawn. Under the Act of 1880 (43 & 44 Viet. c. 36 s. 2) the National Debt Commissioners are obliged to allow interest at the rate of 3 per cent on the money deposited with them by the Savings Bank Trustees. The Commissioners invest this money and any other moneys they may hold, and the rate of interest they earn is sometimes less and sometimes more than 3 per cent. If it is less, as it is at present, they have, nevertheless, to give the Trustees their 3 per cent. and the deficiency falls on the Exchequer. If, on the other hand, it is more, the amount earned in excess of 3 per cent goes into the Exchequer. At present, as I have said, the Commissioners get less than 8 per cent on their investments as a whole, and so they have to pay the Trustees more than the interest earned on their deposits. On the whole, however, the Exchequer has gained rather than lost by the arrangement since 1880, and I see no reason for altering it. In answer to the hon. Member's other Questions, I have to say that the amount paid to the Trustees in excess of the interest earned on their deposits was in 880 the years ended November 20, 1884, £3,081; 1885, £4,774; and 1886, £4,096 (estimate) respectively, and that the estimated annual cost of the management of the work connected with the Banks is £6,000.