§ [SECOND READING].
§ Order for Second Reading read.
§ SIR ALBERT ROLLIT, (Islington, S.)in moving the Second Reading of this Bill, said that it was intended to promote the efficiency, economy, and better administration of savings banks, dealing as it did with various points as to which defects had been shown to exist. It was an omnibus Bill of six clauses, which he would briefly explain. Under the Act of 1891 an Inspection Committee was formed and charged with the duty of inspecting the trustee savings banks accounts so as to protect the public against any repetition of those scandals which had, in preceding years, caused so much serious injury to the poor, both in the loss of their savings, and in the consequent discouragement of habits of providence and thrift. The Inspection Committee had found that as a general rule the accounts were well kept; and that the bookkeeping—though in some few cases rather antiquated—was such as to disclose the real position of these banks. Since the appointment of the Committee it had been necessary to report only one or two cases in which the managers had refused to do their duty. The great body of managers had met every reasonable requirement, and had performed their duties assiduously and attentively, thereby securing the safe and sound administration of these banks. The Inspection Committee reported annually to Parliament on the 82 results of their inspection, and the reports of the last few years had pointed out where defects existed, and how reforms might be effected. The Committee consisted of the Chief Accountant of the Bank of England, the President of the Law Society, the Deputy-Registrar of Friendly Societies, and representatives of the banks, all of whom were experts. Their unanimous recommendations were embodied in this Bill, which consequently had their endorsement. Then again, a Select Committee was appointed in 1902, and presided over by the right hon. Gentleman the Member for West Bristol, which considered the recommendations of the Inspection Committee, and unanimously adopted them as likely to prove conducive to the welfare of the banks. Lastly, the attention of the present Chancellor of the Exchequer had been drawn to the matter. The right hon. Gentleman was anxious to do all he could co aid these banks, and was prepared on behalf of the Government to promise support to the Bill.
Now he came to the clauses of the Bill, each of which dealt with a separate matter. The first clause provided that the auditors of savings banks need not give security. The Committee had found that the duties of the auditors did not involve anything like the responsibility which was cast on the managers and clerks. One of the best guarantees of the safety of a bank was to be found in a frequent change of auditors, and it was thought that, if security were always insisted upon, it might prove an obstacle in the way of securing the services of chartered accountants, who might be willing to give them for one year only; in these cases security would be unnecessary. The second clause enacted that the Government, through the National Debt Commissioners, might allow the expenses of forming penny 83 banks. It would be admitted that there had been no better movement in connection with our elementary schools than the establishment of these banks, and that they had done much to help and strengthen the savings bank movement throughout the country, by inculcating in yonng children habits of thrift. The next clause gave power to superannuate. The absence of that power had, in some instances, been a temptation to the trustees to wind up the bank, in order that compensation which could not be given in annual payments might be given in a capital sum to those who had grown old in the service, and the continued employment of whom did not conduce to efficient working. There was also a clause enabling banks to sell, exchange, and let their bank properties on advantageous terms. This power could only be exercised with the consent of the National Debt Commissioners, on the recommendation of the Inspection Committee. Clause 5 dealt with the amalgamation of banks, and assimilated savings banks in this respect to the friendly and industrial societies and provident societies. It was quite obvious that in neighbourhoods where there might be declining banks, or where branch banks were rapidly growing into larger institutions, the power of amalgamation was almost essential. For that purpose also the consent of the National Debt Commissioners and of the Inspection Committee was necessary. The next clause was wide and of rather more importance. Prior to the Act of 1891, there were sixteen or twenty savings banks which had special investment funds. Those departments were accessories of the bank and curried on the habits of saving to larger amounts. He thought the Committee of 1891 made a mistake when they restricted that power to the then existing banks. It was desirable to restore this power to banks, with £200,000 of deposits, which were open daily, and the clause assimilated the English practice to Scottish practice. It would enable trustees by investing in local securities of which they had knowledge—such as municipal investments and School Board rates—to serve local interests while obtaining really good; securities. The last clause provided 84 that there should no longer be an obligation to give notice, when the depositor's account had reached £200, that it would be invested in stock. Under this clause the deposit would rest in the bank, but, while the £200 would continue to bear its interest, any excess beyond that amount would not be interest-bearing so long as no directions wore received from the depositor for its investment in Consols. This provision was, perhaps, more important in a pecuniary sense to the Post Office Savings Bank than to trustee savings banks, because he believed that in the case of the former the cost of sending out these notices amounted to some £33,000 annually and involved in addition a good deal of clerical work. The provision might also avoid a repetition of domestic differences which had not been unknown when, in consequence of the sending of the notice to the house, the fact that the deposit existed, which had been kept secret up to then, was disclosed either to the master or the mistress of the household as the case might be. That clause had not been put forward by the trustee savings banks, but it was one of the recommendations of the Committee, and he had thought it proper to include it in the Bill. He believed that expenditure on savings banks was a gain to the State, not only by saving people from the rates, but also by accumulating a larger national capital. Ho could not agree that the larger depositors were rich people who took advantage of the banks. He believed that many of them were the depositors who had lived longest and saved most, and were therefore the most meritorious class of depositors. He believed, further, that the Bill would conduce to the efficient and economical administration of savings bank, sand seeing that it bore on its back the names of hon. Members belonging to all Parties in the House, that it had the approval of a Parliamentary Select Committee and of the Inspection Committee, and that further it was endorsed by the Government who were the guardians of the national purse, he earnestly trusted that it would be read a second time that afternoon.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
85§ MR. YOXALL (Nottingham, W.)said that at the request of the governors of one of the oldest trustee savings banks in the provinces he heartily supported the Bill. He had the greatest admiration for the noble work done by the managers and officials of these banks. Although in Committee some slight modifications might have to be introduced he felt that for the purposes of Second Reading very little criticism was needed. There was one point he would like especially to refer to. Some thousands of penny banks had been established in connection with our public elementary schools, but unfortunately there were no funds out of which the expenses of management could be defrayed. It was too much to expect that officials who gave their services voluntarily and gratuitously should pay them out of their own pockets, and it was equally undesirable to reduce the interest allowed on deposits. They had heard from the Chancellor of the Exchequer that he had no intention of reducing the interest on deposits in the Post Office Savings Bank. He believed the provisions of this Bill would assist the banks to work with renewed vigour, and for this and other reasons ho begged cordially to support the Second Reading.
§ MR. LAWRENCE (Liverpool, Abercromby)had pleasure in supporting the Bill upon the authority of one of the largest savings banks of the country. The Liverpool Savings Bank had over 123,000 subscribers, and he had been requested on their behalf to support his hon. friend. It was very gratifying that the proposals of the Select Committee had been received with so much approval. The terms of the Bill had been lucidly set forth, but he might point out that when amalgamations took place, although savings banks might hold buildings, yet they had no means of giving a title when they desired to part with them. That was a point to be dealt with. Another was that, as far as funds allowed, pensions should be allowed to workers who had spent their lives in the service of the community. It was quite true that the real aim of most investors was security rather than high interest, and he certainly thought that when a subscriber 86 had put together £200 he might fairly be considered to have learnt the art of thrift, and to be capable of forming right opinions as to the proper investment of his money. Having regard to the difficulty some banks had in meeting their expenditure, he fully approved of Clause 7, by which some economy might be effected without any real injustice being done to the subscribers. It was unnecessary to dwell further on the merits of this short but useful Bill; he cordially wished it success, and hoped the House would give it favourable consideration.
§ SIR JAMES HASLETT, (Belfast, N.)speaking on behalf of the savings bank of Belfast, heartily endorsed the Bill, which he thought would be a benefit to savings banks generally. Public savings banks were taking the place of private lending associations in Ireland, and it was for the welfare of the country that some public form of bank should be general, with Government audit, and management without personal interest. The Belfast Bank was one of the most successful in Ireland, and it cordially supported the Bill.
§ SIR WILLIAM TOMLINSON (Preston)as a trustee of a large and successful savings bank, heartily approved of the Bill. The elasticity of administration which the Bill would afford had long been desired. Certain points would require consideration in Committee, but the Bill as a whole ho cordially supported.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. AUSTEN CHAMBERLAIN,) Worcestershire, E.congratulated the mover on the unanimity with which his Bill had been approved, and did not propose to raise any discordant voice. On behalf of the Government he welcomed the measure, and the hon. Baronet would have what assistance he could give in passing it into law. He reserved the right to move some Amendment in detail in Committee if he found that course to be necessary; but there was complete agreement as to the object to be attained, which was to embody in legislation the recommendations of the Committee presided over by the right hon. Baronet the Member for West Bristol. The Bill 87 dealt exclusively with trustee savings banks, and did not touch those recommendations of the Committee which had reference to the Post Office savings banks. He had announced the other night that it would be his duty to propose legislation to carry out certain recommendations made by the Committee in reference to the Post Office banks, and also in regard to the trustee banks in respect of the deficiency annuity, a subject with which his hon. friend's Bill naturally did not deal. He had not yet arrived at a definite conclusion as to the form in which those Amendments could be most conveniently proposed to the House. It might be possible for him to move the insertion in this Bill of clauses embodying what he desired. It might, on the other hand, be more convenient to bring them in as a short Bill of his own and to refer the Bill to the same Committee, with an Instruction to the Committee to consolidate the two measures. He would consider which course would be the more advisable. Under the conditions now prevailing he did not think it necessary, or even right, to make a proposal to reduce the interest payable, and the changes he sought to make were such; s he believed would receive the unanimous approval of the House.
§ SIR SAMUEL HOARE (Norwich)expressed his satisfaction with the statement of the Chancellor of the Exchequer. Everybody would be glad to know that the right hon. Gentleman was prepared, not only to support the Bill, but also to make the measure more effective in its working. For the last year or so savings banks deposits had not increased with the rapidity that might have been expected, but there had been an uncertain feeling with reference to the question of interest and also as to the future working of savings banks, whether private or Post Office. The statement of the right hon. Gentleman would give general satisfaction, and doubtless tend to the more rapid increase of deposits. He was in the same position as other hon. Members, inasmuch as he had been requested by the largest trustee bank in East Anglia to support this Bill. He congratulated his hon. friend on 88 finding the House so unanimously prepared to accept the measure, and he hoped it would pass into law in the course of the present session.