HC Deb 20 March 1891 vol 351 cc1568-80

Considered in Committee.

(In the Committee.)

Clause 1.

(5.41.) MR. HOWELL (Bethnal Green, N.E.)

I beg to propose the verbal Amendment which stands in my name.

Amendment proposed, in page 1, line 9, after "of," insert "a trustee."—(Mr. G. Howell.)

Question proposed, "That those words be there inserted."


I understand that the Amendment is not necessary.

Question put, and negatived.

Clause agreed to.

Clause 2.

*(5.43.) MR. BARTLEY (Islington, N.)

The Amendment that stands next on the Paper in my name raises an important, point. The present scheme of the Bill is for the House to appoint a Committee, which Committee shall appoint a Committee of Inspection. I think it is just as well that the House should itself appoint the Committee of Inspection and insert the names of the members of that Committee in the Bill. My Amendment is that the names mentioned in the Schedule shall be the Committee of Inspection.

Amendment proposed, in page 1, line 19, after "shall," insert "be the Inspection Committee and."—(Mr. Bartley.)

Question proposed, "That those words be there inserted."

(5.44.) THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN,) St. George's, Hanover Square

I hope my hon. Friend will not press this Amendment. My hon. Friend will easily understand that gentlemen who take great interest in this question might find sufficient time to organise the scheme in the first instance but might not be able to devote continued attention to it.


After my right hon. Friend's statement, I am content to have the Amendment negatived.

Question put, and negatived.

*(5.45.) MR. BARTLEY

There should be some words inserted to empower the Committee, whose names will be mentioned in the Schedule, to appoint the Committee of Inspection. As the Bill stands, the power would only be given by inference. I beg to move to insert the words "appoint the Committee and" after the word "Commissioners."

Amendment moved, in page 1, line 20, after the word "Commissioners" insert "appoint the Committee and."—(Mr. Bartley.)

Question proposed, "That those words be there inserted."

(5.47.) MR. GOSCHEN

It seems to me it would be better to insert the words "for the appointment of the Committee and" after the word "scheme."


Then if the right hon. Gentleman will move that, I will withdraw my Amendment.

Amendment, by leave, withdrawn.

Amendment moved, in page 1, line 21, after "scheme" insert "for the appointment of the Committee and."—(Mr. Chancellor of the Exchequer.)

Question, "That those words be there inserted," put, and agreed to.

Clause agreed to.

Clause 3.

*(5.48.) MR. BARTLEY

The clause does not seem to me sufficiently wide, therefore I have prepared an Amendment, which I will now move.

Amendment proposed, in page 2, line 10, after "unnecessary," insert— And generally whether it is carrying on its business in a satisfactory manner and according to the rules laid down from time to time by the Committee."—(Mr. Bartley.)

Question proposed, "That those words be inserted."

(5.49.) MR. GOSCHEN

I have looked carefully into this matter, and I find that the object the hon. Member desires to effect is already covered by the words "and conduct of the business" in line 8.

Question put, and negatived.

Other Amendments made.

*(5.51.) MR. BARTLEY

It seems to me that the question involved in this clause is one which may well be left to the Committee of Inspection and the National Debt Commissioners, and that it is a pity to introduce the Registrar of Friendly Societies in the matter. I, therefore, move to omit the latter part of the clause.

(5.52.) Amendment proposed, in page 2, line 41, to leave out all after "rules," to end of Clause.—(Mr. Bartley.)


The hon. Member cannot be aware that the rules at present have to be certified by the Registrar of Friendly Societies, and that, therefore, this is merely applying to the rules the Committee may make, the law applied to the rules made by the banks themselves.


Then I will not press the Amendment.

(5.53.) Amendment, by leave, withdrawn.

Clause, as amended, agreed to.

Clause 4 agreed to.

Clause 5.

Amendment proposed, in page 3, line 35, after "1863," insert— Whether involving the withdrawal of any portion of the separate Surplus Fund, in pursuance of Section 29 of the said Act, or not.—(Mr. Buchanan.)

Amendment agreed to.

Amendment proposed, in page 3, line 37, leave out from "The National," to "1863," in line 40, and insert— No application to the National Debt Commissioners for a payment from the separate Surplus Fund standing at the credit of any Savings Bank shall be entertained unless it have the previous sanction of the Inspection Committee."—(Mr. Buchanan.)

Question proposed, "That the words proposed to be left out stand part of the Clause."

(5.55.) MR. GOSCHEN

I do not propose to omit— The National Debt Commissioners shall have power to determine what expenses shall be deducted. I do not object to the three lines the hon. Member proposes to insert as a separate paragraph, though I do not think they are necessary.

MR. BUCHANAN (Edinburgh, W.)

I will not press the words against the opinion of the Chancellor of the Exchequer, if he thinks they are unnecessary. It seemed to me that they would give a further security.


They appear to me to be an improvement, as strengthening the Committee of Inspection.

(5.56.) MR. GOSCHEN

If the hon. Member will move the words as a separate sub-section to follow line 36, I will agree to them.

Amendment, by leave, withdrawn.

Amendment proposed, in page 3, line 36, to insert the following sub-section:— No application to the National Debt Commissioners for a payment from the separate Surplus Fund standing at the credit of any Savings Bank shall be entertained unless it have the previous sanction of the Inspection Committee."—(Mr. Buchanan.)

Amendment agreed to.

MR. WHITLEY (Liverpool, Everton)

I beg to move the omission of this clause. There is great objection felt to this clause on the part of trustees of savings banks, because they think it is unfair that they should be over-ridden by the National Debt Commissioners. The clause gives the Commissioners power to examine the accounts of savings banks. A great deal of friction has arisen because the Commissioners have refused to allow the expenses of savings banks. I believe I express the opinion of all savings banks when I say there is no control they dislike so much as that of the National Debt Commissioners. They approve of the Bill, but they think when the Committee of Inspection has been constituted there will be no necessity for the National Debt Commissioners having an imperium in imperio. It is felt that this clause will very much impede the usefulness of savings banks, and I therefore move its omission.

Amendment proposed, "That Clause 5, as amended, be omitted from the Bill."—(Mr. Whitley.)

Question proposed, "That Clause 5, as amended, stand part of the Bill."

(5.59.) MR. HOWELL

I hope the Government will be firm as to this clause. It seems to me that you might as well get rid of the Bill altogether as omit this clause. I would refer the hon. Member for Everton to what took place at Macclesfield—and I could go into a number of other cases. I ask him to take the Blue Book in his hand and to refer to the evidence, and see if it is not absolutely necessary that this clause should remain. It deals with the only authority, at present, who has any power in these matters, and they only have it to a very limited extent. It seems to me that rather than try to take the power away, our anxiety should be to try to extend it. What we ought to do is to legislate for the depositors in such a way as to secure that there shall be perfect safety in the management of the Trustees. What the depositors require is absolute security, and unless the National Debt Commissioners have some controlling power over the expenditure by the Bank Authorities I do not see how we are to prevent in the future such frauds as have happened in the past. We know that if the Act had been carried out to its full extent there would have been no need for this attempt at legislation, but unfortunately the provisions of that Act wore not carried out, and the need of some controlling authority over the bank managers has consequently arisen. If it were needful I could lay before the Committee an enormous mass of facts establishing my position on this point, but I will not weary the House by going into them at this moment. I hope, however, the Chancellor of the Exchequer will see his way to granting some provision increasing the safety of the depositors in these banks.

*SIR J. LUBBOCK (London University)

I am sure we all agree with my hon. Friend in desiring the safety of these banks, but I cannot see that this clause does to any material extent add to the safety of the banks. It refers only to expenses, and surely we might trust that matter to the Inspection Committee. If the Committee cannot be trusted to say what are and what are not necessary expenses, they are not likely to be of any use at all. I understand that the Chancellor of the Exchequer promised the deputation which waited upon him on the 11th June, 1890, that the question of necessary expenses should be left to the Committee. That being so, I hope the Government will agree to the proposal of the hon. Member for Liverpool.

*MR. SHAW LEFEVRE (Bradford, Central)

On looking at the whole question, I am disposed to think that the Bill would be better without this clause. The very scope of the Bill is to interpose a new body, so as to avoid, as far as may be possible, the Government being rendered responsible for the working of the Savings Banks. This clause does not appear to me to touch the security or the safety of the Savings Banks. It deals with a comparatively small matter in reference to which, I think, the discretion of the Committee might be trusted, and as to which there is adequate security.

*SIR A. ROLLIT (Islington, S.)

I may say that the managers of Savings Banks, with whom I have been brought into contact of late, heartily approve of the general principle of this Bill, and fully recognise the attention and consideration paid to the questions involved by the right hon. Gentleman the Chancellor of the Exchequer. But, at the same time, I have to state that at a recent meeting, over which I had the honour to preside, and which was attended by the representatives of no less than £27,000,000 of invested funds, the universal feeling then expressed was against the retention of this particular clause, and, beyond this, the deputation which I was the means of introducing to the right hon. Gentleman some months ago, fully understood that this clause was to be materially modified—that some considerable concession would be made. The representatives of the Savings Banks feel very strongly that if there is to be a Committee of Inspection at all it ought to be one that is completely trustworthy and ought to be trusted. As a Representative Body, having many experts upon it, it would be thoroughly competent, without the intervention of the National Debt Commissioners. Feeling that the question here raised should be left entirely to that Committee, I hope this clause will be expunged from the Bill.


I hope the clause will be retained as one that will have a very useful effect, because it will establish a necessary check with regard to these bank expenses. No doubt in the bulk of the Savings Banks of this country these matters are properly looked after; but there are certain cases in which a check is necessary, and that being so I support the retention of this clause.


I certainly did not consider that I had made the promise referred to by the hon. Baronet. In some cases there has been laxity which rendered inquiry necessary, but nine-tenths of the Savings Banks are admirably conducted. The question is how to meet the difficulty. I cannot agree to leave out the clause, but I shall see whether any modification can be made in it. I should like the National Debt Commissioners to have some kind of locus standi.


After what has fallen from my right hon. Friend I will not press my Amendment.

MR. WARMINGTON (Monmouth, W.)

Regarding this question from a depositor's point of view, and knowing that the depositors are not fully represented in the management of these banks, I feel that they require the protection that would be afforded by this clause, and, therefore, I trust that the Government will stand firm in maintaining it.

Amendment, by leave, withdrawn.

Clause agreed to.

Clause 6 agreed to.

Clause 7.

(6.15.) Amendment proposed, in page 4, line 16, after "November," insert— And he has not during that period performed any of the duties imposed on trustees and managers by the paragraph numbered (2) of Section 6 of 'The Savings Banks Act, 1863.' "—(Mr. Jackson.)

Question proposed, "That those words be there inserted."

DR. CLARK (Caithness)

Would this not weaken the clause, and should you not have the word "or" instead of "and?" I thought the object of the clause was to throw over the merely ornamental Trustees, who never attend the meetings.


The Amendment does, to some extent, weaken the clause. Yet a Trustee may perform a certain number of duties though he never attends the meetings. I am informed that in some of the smaller towns it is difficult to get the attendance of Trustees, who, nevertheless, render valua-able service outside the meetings. On the whole, I think the clause should be carried with this modification.

(6.19.) Question put, and agreed to.

Clause, as amended, agreed to.

Clause 8.

Amendment proposed, in page 4, line 30, after "direct," to add— A similar statement with any other particulars that may be required by the Inspection Committee shall be sent to the Inspection Committee each year at the same time."—(Mr. Bartley.)

Question proposed, "That those words be there inserted."


I accept the words that A similar statement shall be sent to the Inspection Committee each year at the same time.

Amendment, as amended, agreed to.

Clause 8, as amended, agreed to.

Clause 9 agreed to.

Clause 10.

Amendments made.


The Bill as it stands limits the opening of investment departments of banks to November 1890. These Investment Departments have been attended with excellent results, and have formed one of the most useful features of the banks. Under these circumstances, it seems somewhat hard that the door should be somewhat suddenly, and without notice, closed against the development of this part of the business of the banks. At a representative meeting of the banking interest there was a very general feeling that the period ought to be extended for the formation of these departments.

Amendment proposed, in page 5, line 36, to leave out "ninety," and insert "ninety-one."—(Sir A. Rollit.)


I am not much inclined to accept this Amendment. This investment business does not really belong to savings banks at all, and I am not prepared to say that it is desirable to extend this class of business. In fact, I think great precautions ought to be taken to separate the two. If we were to prolong the date until 1891 it would give existing savings banks opportunity to engage in investment business. I have endeavoured, as far as possible, not to interfere with the existing business of Trustee Savings Banks. I trust the Committee will not assent to this Amendment.


I agree with the Chancellor of the Exchequer that it would not be desirable to extend the business of the banks in this direction, especially the smaller banks, and I support the Government in their view.


Perhaps the Chancellor of the Exchequer will accept my Amendment, for it seems a little hard to shut the door for ever. By my Amendment the Commissioners or Committee of Inspection, where they thought it desirable, might give particular banks facilities to engage in the investment business. I think my Amendment would prevent all danger of anything being done recklessly, and some advantage might arise from it.


I am afraid that I could not assent to that view, because it would involve the laying down of a guide to the Committee, besides giving permission to some banks, while refusing others. I do not think it is a business which should be carried on.

Amendment negatived.

Clause as amended, agreed to.

Clause 11.

An Amendment made.

Question proposed, "That the Clause, as amended, stand part of the Bill."

*(6.25.) MR. E. BRODIE HOARE (Hampstead)

I beg to move the omission of Clause 11, and I do so as a protest against the further extension of the limit of deposit in these excellent benevolent institutions bolstered up by Government credit, which compete most unfairly with private and other banks, especially in small towns. I cannot but think that the reason given in the Bill for the change is most inadequate. It is that difficulty has arisen about the due apportionment of principal and interest. If the Trustees of these banks cannot see the difference between principal and interest, they are not fit for their position. It is only due to the enterprise of banks in the country that they should have fair competition, and not to the unlimited competition of the Government for deposits, which are to them their very life-blood.


I think the bankers owe a debt of gratitude to these banks. They have taught thousands the habit of banking, and so largely increased joint-stock banks, which are becoming familiar institutions at so many corners of the streets as almost to be as numerous as public-houses.

(6.29.) SIR J. LUBBOCK

It is quite true that the proposal in the present Bill is but small; still, at the same time, it is another step in the direction of Government interference with private enterprise. I join with my hon. Friend the Member for Hampstead in expressing my regret that the Government have introduced this proposal. It does not affect the bankers of London, but it does affect many of the banks with branches in small places. The Government can only undertake one side of banking business. There are three branches of a banking business—the receiving deposits, keeping accounts, and the lending out of deposits. The money of the district is lent out, in fact, to small tradesmen. Savings Banks perform most admirably one portion of banking, namely, deposit business; but they cannot carry on the other functions of banking, namely, the keeping accounts, and making advances to those in business. The effect is to drain money from the provinces and bring it up to London. It does not affect London banks, but I do think it is unfair to banks in country districts; and though the proposed change is not large in itself, still I am glad that the hon. Member for Hampstead has protested against it, because it is another case of Government interference with private enterprise.

Question put, and agreed to.

New Clause— The Treasury may from time to time, by a minute to be laid before Parliament, fix the date for the presentation to Parliament of any accounts required by the Acts relating to savings banks to be so presented.

—brought up, and read a first time.

Motion made, and Question proposed, "That the Clause be now read a second time."

(6.36.) DR. CLARK

I think we ought to hear from the right hon. Gentleman what it is intended to do by means of this clause. It practically abolishes all statutory requirements as to presenting accounts, and if it is passed the Postmaster General will not be compelled to send in his Report as hereto-fore. I have heard that the clause is intended to relieve the right hon. Gentleman at the head of the Post Office of the difficulty he has been placed in by the recant strike.

(6.37.) MR. JACKSON

It is sometimes found to be quite impossible to present the accounts by the required date, and the result is that the accounts are presented in dummy—an objectionable practice. The Government think the power of fixing a later date might safely be given to the Treasury if it were found necessary to do so in order to meet the exigencies of the Public Service.

(6.39.) MR. PICKERSGILL (Bethnal Green, S.W.)

The object of the clause is to relieve the Postmaster General from the serious dilemma in which he was landed by his gross mismanagement of the Savings Banks Department. It was rumoured that a specific Bill was to be introduced for the purpose of extending the time by which the Postmaster General is bound to produce his accounts. So far as the Trustee Savings Banks are concerned, I think that this clause might reasonably be allowed. It is obvious that the relations between the Treasury and the Trustee Savings Banks are not such as to lead the Treasury to extend the date for the presentation of accounts unduly; but we know how singularly intimate are the relations between the Treasury and the Post Office, and therefore we know that this power would be too readily used.

Question put, and agreed to.

Motion made, and Question proposed, "That the clause be added to the Bill."


I now move "That this clause do not apply to the Post Office Savings Bank."

(6.42.) MR. JACKSON

I cannot accept this Amendment. The only dilemma from which the Postmaster General will be relieved will be to save the clerks of the Department some amount of overtime, to which some of them object. It is obvious it is impossible to present the account by the date prescribed, and I therefore ask that the Treasury shall have power to fix a suitable date. I appeal to my hon. Friend not to press his Amendment.

(6.43) MR. J. ROWLANDS (Finsbury, E.)

If the date now fixed is too early, the proper thing to do is to alter it and fix some other date, but not to vest this general dispensing power in the Treasury. But a better method still would be to increase the staff, so that it should be adequate to the work to be done. I think the difficulty the Postmaster General is in is due not to any unreasonable unwillingness on the part of the Savings Bank clerks to work overtime, but to the enormous demands made upon their time.

(6.44.) MR. JACKSON

I am quite willing to accede to the suggestion of the hon. Member, and will bring up a new clause on Report fixing a date. If the suggestion is, as I believe, thrown out in a friendly spirit, I am quite willing now to withdraw this clause on that understanding.

(6.45.) DR. CLARK

I think this is a bad system we are falling into of inserting in new Bills clauses modifying provisions of existing Acts without giving the House any indication of what is being done. I think it is only fair to the Committee that when such changes are proposed the official in charge of the Bill should say what is being done. Had it not been for the rumours which were circulated, we might not have known that this clause was intended for the relief of the Postmaster General.

Amendment, by leave, withdrawn.

Motion, by leave, withdrawn.

Schedule 1.

Question proposed, "That this be the 1st Schedule of the Bill."

(6.49.) MR. GOSCHEN

On this I may announce the names of those gentlemen who have been chosen to frame the scheme for determining the appointment of the Inspection Committee, and its powers. They are Mr. Lyulph Stanley, Lord E. Hervey, M.P., Sir A. Rollit, M.P., Mr. John Ellis, M.P., Mr. T. C. Wright, of Lincoln's Inn, a Trustee of the Bloomsbury Bank, Mr. John Ure, Dean of Guild, Trustee of the Glasgow Savings Bank, and Mr. Henry Court, late Assistant Comptroller of the National Debt. It will be seen that three of these gentlemen represent savings banks, three are perfectly independent, and one is an expert, who will advise the Committee on technical matters. I will ask the Committee to allow these names to be put in the Schedule, and if there is an objection taken to any of them it can be brought forward on the Report stage.

Question put, and agreed to.

Remaining Schedules agreed to.

Bill reported; as amended, to be considered upon Tuesday next at Two of the clock.