Lords Sitting of 29 April 1861

MINUTES.
Sat First in Parliament.—The Earl Cawdor after the Death of his Father
PUBLIC BILLS.—1a Passengers (Australian Colonies); New Provinces (New Zealand).
2a Queen's Prison, &c.,
3a Post Office Savings Banks.

THE AMERICAN STATES.

  QUESTION.
  THE EARL OF MALMESBURY: I beg leave to put to my noble Friend the Under Secretary for Foreign Affairs a question, of which I have given him private notice, in reference to a subject which deeply interests this country, and, I may say, the whole of Europe. All your Lordships
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  have, no doubt, read the accounts which arrived this morning from America, and must have learnt with pain and with some astonishment that a civil war has broken out between the Secessionists in that country and the other States of the Union. Fortunately, up to the date of those accounts, no blood, hardly any, had been shed, and too much praise cannot, I think, be bestowed upon the commander of the fleet engaged in the transaction to which I refer for abstaining from entering on a useless contest which could only envenom the spirit of both parties. It is impossible, however, my Lords, that a struggle such as that which seems now impending in America—a struggle so unnatural, and calculated, I may add, to prove so fatal to the parties concerned in it—it is impossible that such a struggle should not produce a reverberation throughout the rest of the world. I may further observe that no country on this side of the Atlantic is, perhaps, more likely to suffer from the civil war which threatens the United States than our own; for, altogether apart from those feelings of regret with which we must witness the breaking out of strife between persons belonging to the same family as ourselves, and kindred to us in language as well as in blood, our political and material interests are deeply involved in this unhappy schism. That being so, I cannot but believe that Her Majesty's Ministers, feeling upon this question with all Her Majesty's subjects, have already done their utmost by officious means to bring about some arrangement by which so dreadful a calamity as that of which I am speaking may be averted. I, therefore, wish to ask my noble Friend the Under Secretary of State, What steps the Government have taken with that object; whether they have made any attempt to prevent the quarrel between the different States of the American Union from coming to a bloody issue; what hopes they entertain of succeeding in so laudable an endeavour, and whether they have invited, or are in correspondence with any other European Government with the view of obtaining their assistance in seeking to put a stop at the outset to a civil war, of which, if once fairly commenced, it will be impossible to foresee the end?
  LORD WODEHOUSE: My Lords, need scarcely assure my noble Friend that the Government, in common with him, and I feel confident with every one of Her Majesty's subjects, have learnt with the

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  deepest regret the intelligence of the dissensions which have taken place in the United States. We have also received with the utmost concern the accounts to which my noble Friend has alluded, informing us that those dissensions have brought that country to the brink of civil war—if, indeed, civil war may not be said to have already broken out. In answer to the question what steps have been taken by Her Majesty's Ministers to avert this great calamity—for a great calamity it undoubtedly must prove to be not only to the Americans themselves, but to England, which is so closely connected with them by the ties of kindred—I have to state that, after the most mature deliberation, the Government came to the conclusion that it was not desirable that this country should intrude her officers or counsel on the Government of the United States. However great the interest which we may feel in the welfare of her people, and however anxious we might be to rescue them from the misfortune which appears to he impending over their heads, we yet thought that a great and independent nation might not welcome advice given with respect to her internal affairs, if that advice were proffered without being solicited. The instructions, therefore, given to Lord Lyons were, that he should on every fitting occasion express the earnest desire entertained by Her Majesty's Government that the differences which prevail between the Northern and the Southern States should be arranged. He has not, however, been instructed to give, either officiously or officially, any counsel or advice to the American Government, unless such counsel or advice should be asked for by the contending parties themselves. That is the answer I have to give to the question of my noble Friend. It naturally follows that Her Majesty's Ministers have not been in communication with any foreign Government as to any steps being taken of the nature of those to which he has alluded.

POST OFFICE SAVINGS'-BANKS BILL.

  MOTION FOR RETURN.
  LORD MONTEAGLE LORD MONTEAGLE moved, That there be laid before the House, Report made to the Postmaster General by the officers of the General Post Office on the Post Office Savings Banks Bill.
  LORD STANLEY OF ALDERLEYopposed the Motion as one quite unusual and unprecedented, it being a confidential communication from the subordinate officers to
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  the head of the department for his guidance and information.
  On Question, Resolved in the Negative.

POST OFFICE SAVINGS'-BANKS BILL.

  THIRD READING.
  Order of the Day for the Third Reading read.
  Moved, That the Bill he now read 3a.
  LORD REDESDALEasked what would be the probable expense of working out this measure?
  LORD STANLEY OF ALDERLEYsaid, that there would be no objection to lay on the table an account of the probable expenses of the new system; £3,000 a year was computed as the cost of working the system on the experimental scale proposed at present. If the system should be extended the expenses would, of course, be greater.
  THE EARL OF HARDWICKEinquired what was intended by the Government in reference to the salaries of the small postmasters, whose duties would be very onerous?
  LORD STANLEY OF ALDERLEYreplied that exactly the same course would be pursued as had been adopted with respect to the money-order offices—namely, the postmasters would receive a percentage on each transaction.
  LORD MONTEAGLEsaid, he could not see without regret and alarm what seemed to him meant to produce a breaking up of the existing savings hanks, and the substitution of the action of a salaried Government department for what he might call a great public charity, directed by benevolent persons acting gratuitously in their own neighbourhood. The present system cost in its management between £120,000 and £130,000 a year; and the paid officers holding situations of trust found security to the amount of £740,000. The cost of the proposed scheme they had no means of estimating, but be doubted whether the whole of the persons in the employment of the Post Office who were to carry out this Bill could give security to an equal amount. Yet the Bill tended to supersede the trustees, managers, and paid actuaries of the existing savings banks. [Lord STANLEY of ALDERLEY: It will not interfere with them.] He asked their Lordships to read this Bill, and say whether it had not been framed with the view of leading to a breaking up of the present savings banks, transferring their deposits to the Post-

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  master-General? The Bill would, in fact, create within the Government a great centralized bank, and would place at the disposal of the finance Minister an enormous amount of money being the savings of the middle and humbler classes. He objected to the power which the Chancellor of the Exchequer possessed of using the funds of the savings banks for stock broking purposes. He was so impressed with the danger by which the measure would be attended that he should deem it his duty to put his objection on record by saying "Not content," to the Motion, though he would not put their Lordships to the trouble of a division.
  LORD STANLEY OF ALDERLEYsaid, that the Bill did not propose to deal with the existing savings banks; and if it should have the effect of subverting those institutions it could only be because the public would prefer the new banks to the old, as affording greater facilities for the deposit of their savings, and giving an increased security, that made up for their diminished rate of interest which they would receive. He could not, therefore, admit that that was any ground for complaint. With regard to the present banks, he knew that in many instances the greatest difficulty had been experienced in finding gentlemen who would accept the office of trustees of these establishments. Practically the administration of the existing banks depended almost entirely on the managers, the trustees being merely the names of certain gentlemen who were put before the public, but who neither did nor could give the requisite amount of attention to the matter. These gentlemen were not responsible by law for the deposit, but at the same time, when a failure did take place, feeling themselves to rest under a moral obligation, and unwilling to see their poorer neighbours incur any injury, they had sometimes voluntarily and handsomely come forward and contributed the money from their own resources. In the case of the Rochdale Savings Bank the amount of loss incurred was.£37,000, and from that moment to this it had been found impossible to re-establish a bank there, or to induce any one to come forward and act as trustee. But the substantial objection of his noble Friend was not to this Bill itself, but to the state of the law with reference to the deposits in savings banks. His noble Friend was of opinion that the money in the hands of the National Debt Commissioners enabled the Chancellor of the Exchequer to deal with the funds, and thus to exercise
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  control over the money market. Well, at any rate, the present Government were as little liable to blame this ground as any of its predecessors; for last Session the Chancellor of the Exchequer introduced a Bill by which he proposed to tie his own hands up so far as £30,000,000 of deposits in savings banks was concerned. That Bill, however, so far as it related to the present question, was not approved of by the other House; but his right hon. Friend was quite willing to re-introduce it on the first opportunity; and in the present Bill there was a clause which directed the production of annual returns for the information of Parliament of all the transactions which took place with the savings banks monies, and which would operate as a great check upon his proceedings in the direction referred to. This Bill was calculated to effect an object which all must desire to see carried out. It did not interfere with the existing savings banks, whilst it afforded the poorer classes an opportunity of depositing their money more readily, and he believed more safely, than they could do now.
  On Question, Motion agreed to.
  Bill read 3a.
  On the Question that "the Bill do pass."
  LORD REDESDALEbegged again to call attention to the clause relative to the transfer of money from existing savings banks to those connected with the Post Office. The Bill required these transfers to be made by a certificate signed by two trustees. This, he thought, would lead to very great inconvenience in many instances. He believed it would be far better to let the depositor withdraw his money himself and re invest it himself.
  LORD STANLEY OF ALDERLEYsaid, that under the plan proposed in this Bill, the transfer would be effected by the National Debt Commissioners, on receiving the certificate of the trustees, simply removing the sum from the account of the present savings bank and entering it to the credit of the Post Office Savings Bank, and the necessity for any selling-out would, therefore, be entirely obviated; in case of panic or anything of the kind this would be a very great advantage.
  Amendment made.
  Bill passed and sent to the Commons.

  PROTEST
  Against the Third Reading of the Bill.
  "Dissentient—

  "1. Because it is inexpedient, without deliberation and evidence, to transfer to the centralized

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  authority of a Revenue Department, already charged with laborious and incompatible duties, functions which have been hitherto performed by independent trustees, acting gratuitously, freely appointed, and who, by their administration of the Savings Banks throughout the British empire, have conferred a signal benefit on their country by encouraging habits of prudence, industry, and forethought.

  "2. Because such a transfer cannot be made without implying a mistrust in that system of self-government to which England owes so much prosperity and happiness, and her charities and voluntary institutions so much of their success; and whereby all classes of society, being united in the discharge of their local functions, are trained in habits of business and responsibility, and are thus fitted for the fulfilment of other and more weighty duties.

  "3. Because this change is made without any clear and distinct explanation of the proposed system, or any estimate of its probable cost—a cost which, whether supplied by Parliamentary grant or by a deduction from the interest payable on deposits, equally demands the most careful and jealous attention.

  "4. Because the proposed change is the less called for when it appears that, under the existing local management, the amount of deposits in Savings Banks and Friendly Societies has steadily augmented, and on the 28th of November, 1860, had reached the extraordinary sum of £43,298,320; and that a further sum of £768,275 had been pledged by the officers of the existing Savings Banks as a security for their faithful discharge of duty.

  "5. Because the Legislature, in passing its earlier laws for the regulation of Savings Banks, described the sole object of those institutions to be 'the receipt of deposits for the benefit of the depositors, and the accumulation of so much of the interest as shall not be required by them: 'yet a practice has subsequently been introduced, and largely extended, by which the funds of Savings Banks have frequently been advanced to meet financial difficulties of the State, a power being conferred on the Executive Government described by high official authority as being 'larger and more absolute than is required for the public service.'

  "6. Because these practices, condemned by high Parliamentary and official authorities, are not only left uncorrected by the present Bill, but are liable to be more largely and freely applied, by reason of the substitution of a Revenue Department for the more constitutional control of the existing Boards of trustees.

  "7. Because no provision is made under this Bill for compensation or reward to the paid officers of the existing Savings Banks, however long and faithful their services, and who will be liable to be turned adrift and replaced by the nominees of the Government.

  "8. Because the proposed system, brought altogether under the central authority of a revenue department, may, when dealing with a capital of £43,298,320, facilitate and encourage the sale and purchase of public securities on account of Savings Banks in a manner to influence unduly the value of the Parliamentary stocks, and thus to affect injuriously both public and private credit.

  "9. Because, while it is not improbable that the agency of the Money Order Department of the Post Office may be usefully employed in the mere
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  remittance of the funds of Savings Banks as between the local trustees and the Commissioners for the Reduction of the National Debt, no evidence or authority has been produced to justify the novel and objectionable principle on which the present Bill is founded.

  "MONTEAGLE OF BRANDON."
  House adjourned at a quarter past Six o'clock, till To-morrow, half-past Ten o'clock.