In the autumn of 1904 the Lancashire and Yorkshire Bank, Limited, announced the opening of a Savings' Department in addition to their usual banking business, and a copy of their rules is appended:
Every Official of the Bank is bound to secrecy, and no information respecting a depositor's account can be given to any other person.
Any person over sixteen years of age may-open an account.
Any amount not less than One Shilling may be deposited.
Depositors must give written notice of any change in address.
Interest will be allowed at this Bank's usual rate of interest for deposits on every full Pound for every day it is in the Bank. It will be added to the account half-yearly in May and November.
Withdrawals can be made any day during business hours. The depositor must attend personally to draw the money.
Each depositor will be provided (free of charge) with a Bank Book. No business can be transacted without it.
The depositor should see that it is correctly entered up before he leaves the Bank.
The book can be left at the Bank for safety if the depositor wishes.
When the account is closed the book must be given up to the Bank.
Tinder no circumstances will an account be re-opened in an old book - a new book will always be given.
Cheques are collected, and all kinds of Banking business transacted for depositors.
Depositors may leave with the Bank, for safe custody, Wills, Deeds, Shares, Insurance Policies, or other valuables, in locked boxes or sealed parcels, wherever the Bank has strong room accommodation.
Their example has been followed by other banks in the provinces, but as this new development has as yet hardly passed beyond the experimental stage, it is not thought advisable to offer any criticisms.
The deposit system of banking is universally considered to be one cause of the prudence and frugality by which the lower classes of the people of Scotland are distinguished.
In every point of view the savings' banks appear calculated to produce unmingled good. They extend to persons of small means all the benefits of banking. The industrious have thus a place where their small savings may be lodged with perfect security from loss, and with the certainty of increase. They tend to foster that disposition to accumulate which is usually associated with temperance and prudence in all the transactions of life. Upon the mercantile interests of society they have the same effect as commercial banking. The various small sums which were previously lying unproductive in the hands of many individuals, are collected into one sum and lodged in the public funds. The tendency of this, in the first place, is to raise the price of the funds. This advanced price may cause some of the holders to sell out and to employ their money in trade and commerce. Thus the savings' banks augment the productive capital of the nation.
It is much to be regretted that the advocates for savings' banks should ever have proposed these institutions as substitutes for benefit societies. Cannot the interest of one excellent institution be promoted but at the expense of another? Savings' banks are a useful addition to benefit societies, but cannot supply their place. A labourer pays to a benefit club about thirty shillings per annum, and for that payment he receives about eight shillings per week during the time of illness. If this sum be lodged in a savings' bank, how soon will a few weeks' illness exhaust the whole. It is no doubt the revelling and excess that have too often attended the meeting of benefit societies at public-houses that have given rise to objections against them. It may be expected, however, that as our labourers and mechanics become better instructed these excesses will be avoided.
But while savings' banks do not supersede benefi societies, neither do benefit societies supersede the necessity for savings' banks. The benefit society is of use only in case of illness - in no other case has a member any claim upon its funds. He cannot draw out money to support his wife, to furnish his house, or to educate his children. The benefit societies are only to guard against calamity, not to increase enjoyment. By these, labourers may be saved from the parish workhouse, but they must also become depositors in a savings' bank if they wish to acquire independence.1
As it is always interesting and useful to note the progress of the savings of a nation such as ours, we append tables showing the amounts of the deposits in the Post-office Savings' Banks, and in the old Savings' Banks under trustees during the past twenty years. These tables are taken from the Statistical Abstract of the United Kingdom.
1 The Post Office and Trustee Savings' Banks have been severely criticized in some quarters, on the ground that they are managed on lines which would not be tolerated in the case of commercial banks, more especially that no adequate reserve of cash is kept, and that the assets are in some cases over-valued. See the paper by G. H. Pownall in the "Journal of the Institute of Bankers " for April, 1903.