SAVINGS BANKS BILL.—(No. 142.) (Hansard, 8 June 1891)

LORD DENMAN
My Lords, I pledged myself to oppose this Bill at every stage. It jumped very quickly through the last stage. I was present last Monday at a meeting of Savings Bank managers, and I found no approbation of the Bill whatever. I attended last Friday at a general half-yearly meeting, and we learned that the opinions of the Trustees were then being submitted. No names were mentioned at that time. I do not know that the small number of names which have been added since will have increased the confidence of the country in such a measure. I conceive that this is the most dangerous measure that ever was presented to Parliament. It is an attempt to get away from the present 1814 Savings Banks all their money, and to draw that money into the Post Office Savings Bank. The first attack upon the Savings Banks was depriving them of the ¼ per cent. interest beyond the Savings Bank rate. The Post Office Savings Bank has a great advantage for persons who travel from place to place, in respect of their being able to withdraw their money at any post office in the Kingdom. The amount to be invested in these Savings Banks was only £30 for each individual, and now it is wished that the amount should be extended, and that the Savings Banks should be obliged to pay all their money into the Treasury—into the hands of the Commissioners for the Reduction of the Public Debt. I know that if they ever want to invest money they are deprived of the power of investing it to the same amount as they were entitled to before. Trustees incur a liability, no doubt. I am myself a Trustee, and I am ready to stand to my responsibility. In my neighbourhood there are a good many Trustees—the Duke of Devonshire, the Duke of Rutland, and others connected with the county—and the managers do their work carefully, without much expense. If you have to dispense with the services of those officers you will be obliged to employ a great number of clerks, and in the Post Office they are already overworked. They are complaining of that. I can only say that the security of having the first men in every county at the head of the Savings Banks is a very great inducement to the people in the neighbourhood to deposit their money there. I have never complained of anything that I had the power of opposing, and I do hope that this Money Bill will not be accepted by your Lordships. We have had one Money Bill lately to enable the County Councils to expend 30 guineas for a particular purpose. We tried to alter it in this House, but without avail. We must not interfere with the privilege of the House of Commons, and I am quite certain if you pass this Bill you will repent it. One noble Lord in my neighbourhood (Earl Cowper) accepted the office of president of a dispensary; and if that noble Lord had put his name down as Trustee of a Savings Bank, I am certain the number of depositors would have been very much increased. We have 1815 property in our care; it is well administered, and we are anxious that every man should feel confidence in us, confidence which they could not entertain in the same way in the Post Office Sayings Bank, because it is subject to a continual paring down by Parliament. The Conservative Party is not strong enough in this House. The agricultural interest is very much depressed in this country, and I earnestly hope it will soon revive. I beg to move that this Bill be read this day 10 months.

§ LORD HERSCHELL
My Lords, on the Motion "That the Bill do pass," I have to move the Amendment of which I have given notice in Clause 10, page 6, in the last sub-section, which prohibits, in effect, any Savings Bank making special investments, unless it has exercised its statutory power before the 20th November, 1890. Now, the Statute which authorises those investments is still in force, and this Act proposes to put certain restrictions upon them. One of those restrictions is, as I understand, to prohibit for ever hereafter the making of any of the investments which that Act authorises, unless the bank has made them before the day named. If it has made them before that day it can continue them, but subject to certain statutory restrictions contained in the earlier part of the clause. I know that at least one important Savings Bank— and I believe of a very high character—has made these special investments subsequently to the 20th November, 1890, and on the last occasion when I called attention to the matter the noble Lord who represents the Board of Trade gave no reason why that date had been fixed; he merely said there was a fear lest banks might make such investments in view of the passing of this Act though they had not hitherto made them. But the truth is, these provisions have not, I think, become so widely known as he 1816 supposes; and, in any case, it is difficult to see how anybody can justify drawing an arbitrary line in that way on a particular date, no reason being given why that date has been chosen rather than any other. It seems to be quite arbitrary, because the day so fixed was long before this Bill was introduced; and to say that any bank which has made investments of this kind under existing Statutes and in conformity with its rules shall, by the fixing of an arbitrary date, be prohibited from continuing those investments in future, seems rather unreasonable. I would suggest that if the words "before the passing of this Act" be substituted, they would sufficiently answer the purpose.

§ THE MARQUESS OF SALISBURY
I expressed some doubt as to this clause when the Bill was last before the House, and I have inquired of the proper authorities about the matter. It appears that November 20th is the ordinary financial day for these Savings Banks. It is the date to which their assets are made up and from which they start yearly as regards their financial position. There is an obvious convenience, therefore, in accommodating all their financial proceedings to that date. I do not think the matter is of any great importance, but it turns out not to be so unreasonable as it certainly seemed to me when the noble and learned Lord first mentioned it. It is a very natural thing to take the end of the financial year in regard to these banks just as in dealing with matters affecting the Public Purse.

THE EARL OF KIMBERLEY
I was rather disappointed to hear the noble Marquess object to the noble and learned Lord's Amendment. I hardly think the reason he gave is an adequate one. Of course, it is convenient that the accounts should be. made up on a particular day, but I do not see that the fact that something will have to be brought into account after that particular day in that particular year will cause any serious inconvenience, and I would submit to the noble Marquess that unless there is some very strong reason for it, retrospective legislation of this kind is not very desirable. It is retrospective legislation to deprive these Savings Banks of a power which they possess at this moment, and which, in ignorance of this 1817 Bill, they have exercised. Of course, if there is a serious abuse of that power, it must be remedied; but if there is not an abuse of that kind to be remedied, it seems to me to be rather out of our usual course to prohibit these banks retrospectively from doing that which was lawful when they had actually done it. That appears to me to be a consideration to which the noble Marquess would perhaps attribute weight, and I hope the noble and learned Lord's Amendment will be agreed to.

§ THE MARQUESS OF SALISBURY
There seems to be some misapprehension. I do not read the sub-section in the same light as the noble Earl, I think, reads it. I gather that he thinks it may prohibit the making of these investments after the 20th November, 1890. It does not do that. What it does is to prohibit the making of these investments after the passing of this Act unless the bank has exercised the power before this particular date. That is to say, it makes two classes of banks, those which did before the 20th November exercise that power, and those which have not done it; but it does not invalidate anything done between that date and this. I imagine that special investments made under particular circumstances after the 20th November, and before the passing of the Act, would be good.

THE EARL OF KIMBERLEY
But the difficulty is that the bank is not to be allowed to exercise the power after the 20th November, 1890, if it has not previously exercised the power.

§ THE MARQUESS OF SALISBURY
Under this Act.

THE EARL OF KIMBERLEY
The noble Marquess, I find, is right: it is not to be exercised under this Act. But why is one bank to be placed in a position of disadvantage as regards another bank merely because there has been certain restrictions imposed in this way? If it is a bonâ fide investment, and the bank is a solid bank, I do not see why it is to be placed in a less favourable position than a bank which happens to have exercised the power before that date. That is exactly the point, I think.

§ THE MARQUESS OF SALISBURY
I am afraid if that be so I must have hopelessly misunderstood it. There is no 1818 disability inflicted upon a bank by reason of its having made these subsequent investments.

THE EARL OF KIMBERLEY
There is the reason of its not having done it before.

§ THE MARQUESS OF SALISBURY
I am quite willing to add words giving the Treasury a dispensing power in the event of awkward cases arising.

§ LORD HERSCHELL
That would do, I think; or I might suggest this—as public attention has now been called to the matter, you might fix the 1st June as the date rather than the 20th November.

§ THE MARQUESS OF SALISBURY
I would rather give a discretion to the Treasury; because, after all, the Banks might say they do not always read the Reports in your Lordships' House. However, my noble Friend prefers the view of the noble and learned Lord opposite (Lord Herschell), so we will make the date the 1st of June.

§ LORD HERSCHELL
In that case I move to substitute the date "1st June, 1891," for "20th November, 1890."— Agreed.