THE POST OFFICE SAVINGS BANK
The extension of banking facilities for the upper and middle classes of
this country during the eighteenth and nineteenth centuries only
benefited the working classes indirectly. If they wished to save
anything out of their earnings they were either obliged to resort to the
time-honoured expedient of hiding their money in out-of-the-way corners
of their houses or gardens or they entrusted it to the care of private
individuals or institutions, and were in consequence without adequate
security. Even in these days the old method of hiding their savings is
adopted by many people, but the treasure is now not always money but the
Savings Bank deposit book. A man once wrote to the Controller of the
Post Office Savings Bank to explain the loss of his deposit book, and he
said: “How I came to lose my book was, in a fright I buried it in my
garden with other valuables. The garden, unfortunately for me, is very
large, and I could never remember afterwards in what part I put it.
Within the last month I have sold the premises, and being so deep it is
not likely to be found by any one.” The value of the Savings Bank came
home to him when he realised that in burying his book he had not hidden
his money. A new book was all that he required.
I believe that the first recorded instance of the establishment of a
Savings Bank in the United Kingdom was in the year 1810, in the little
village of Ruthwell in Scotland. The minister of the church, the Rev.
Henry Duncan, D.D., conceived the idea for the benefit of his
parishioners, but found at first great difficulty in persuading people
to entrust their money to him. To meet the difficulty a box was provided
with three padlocks, which could only be opened in the presence of the
three different holders of the keys. This box is still in existence, and
was produced at the centenary of the opening of Savings Banks held at
Edinburgh in 1910.
In 1817 Trustee Savings Banks were established in certain towns under
regulations fixed by Act of Parliament, and for nearly half a century
these institutions provided a means by which the small savings of the
public could be deposited at a fixed rate of interest. But these were
local banks, and there were still vast areas of population unprovided
for in the matter of banking facilities. What was wanted was a system
for the whole of the country, something which could really be regarded
as a People's Bank.
The rapid extension of the Money Order system, and the creation in every
town and in almost every village of a post office where business other
than that of the receipt and despatch of correspondence was conducted,
suggested to Mr. C. W. Sikes, a bank official of Huddersfield, that here
was the organisation for the purpose. He wrote in 1860 an open letter to
Mr. Gladstone, who was at the time Chancellor of the Exchequer, in which
he pointed out that there were eighteen counties and 2000 towns without
a Savings Bank of any kind. He directed Mr. Gladstone's attention to the
success of the Money Order system, and he urged him to use the same
medium for savings, “for thereby you bring the Savings Bank within less
than an hour's walk of the fireside of every working man in the
Kingdom.” The appeal was successful. Mr. Gladstone with characteristic
enthusiasm adopted the plan, and carried a Bill through Parliament to
give effect to the proposals. On the 16th September 1861 Post Office
Saving Banks were opened in 300 towns, and from that date onwards the
story has been one of continued progress. According to the
Postmaster-General's report of 1910 the number of Post Office Savings
Bank accounts, excluding those which experience has shown are dormant,
was 7,913,295, and the amount of money standing to the credit of
depositors was £164,596,065. The average amount of each deposit was £2,
7s. 9d.
Here, therefore, we have a People's Bank actually established in our
midst, and the best excuse of the improvident no longer exists.
During the fifty years of its existence, remarkable developments have
taken place in the working of the Post Office Savings Bank. The
facilities for the public have been increased enormously, so much so
that the old idea of a bank existing simply for the encouragement of
thrift has been considerably modified. The ease with which withdrawals
can now be made, and the extension in the limits of money which may be
deposited annually, have provided the man or woman of small means with
most of the advantages to be obtained from the possession of a current
account at a private or joint-stock bank. And he obtains one additional
advantage, in that on any sum from £1 upwards he obtains 2½ per cent.
interest. These increased facilities are looked upon with disfavour by
those who consider that the slight difficulties which were for many
years placed in the way of those who wished to withdraw money, were
created in the interests of the depositors themselves.
In order to bring out clearly what are the benefits of which I have
spoken, let me state briefly the possibilities which are open to a man
who becomes a depositor. He goes to any post office where Savings Bank
business is transacted, and after signing a declaration and depositing
any sum, not containing fractions of a shilling, up to £50, a book is
handed to him in which his transactions are recorded. That book can be
used at any Post Office Savings Bank in the United Kingdom for deposits
or withdrawals. He can deposit £50 in any year until a total of £200 is
reached, and in addition he can replace the amount of one withdrawal
made during any year. Further, he can invest in six different kinds of
Government Stock to the amount of £200 Stock in a year, or £500 Stock in
all, and he can make special deposits to cover his investments,
irrespective of the limits fixed for his deposit account. Roughly
speaking, he can therefore hold £200 in his deposit account and at the
same time be the possessor, through the medium of the Post Office, of
Stock of the nominal value of £500. The smallest amount of Stock he can
purchase is one shilling. Means are provided by which he can transfer
his Stock from time to time to the books of the Bank of England, and so
enable him to continue purchasing Stock by means of his deposit account.
Or he can buy a Stock certificate with coupons for dividends annexed.
The commission on every transaction is considerably below that charged
by a stockbroker.
Occasionally there appears in the press a demand for the popularisation
of Consols, and it is suggested that the Post Office should be the
medium of selling across the counter to the British public scrip for
small amounts of Government Stock. There should be no book transactions
with the public, and the scrip could be disposed of at the price of the
day, when the owner wished to sell. The people who make this demand
usually show a lamentable amount of ignorance as to what the Post Office
does in this matter. They argue as if there were no opportunities for
the British public to invest in Consols in small amounts, as the French
do in their own Government securities. It may come as a surprise to many
people, who are inclined to entertain favourably the proposals I have
mentioned, that considerably over £23,000,000 Stock is held already by
depositors in the Post Office Savings Bank, and that the average amount
credited to each person is about £140 Stock. The facilities for purchase
and sale are as easy as it is possible to arrange.
There is also another consideration which should make the present system
more valuable to the man of small means or the workman who wishes to
invest in Government Stock. The purchase is registered in his name in
the Stock registers of the Post Office. If he were to buy the Stock
across the counter he would be handed the scrip or bond, and he would
have the great responsibility on his shoulders of keeping it in a safe
place. A great deal of the value of the Savings Bank to the working
classes is that it takes care of their property: they get the money out
of the house, where its presence is always an anxiety. Under the
proposed arrangement the man would have to look after his scrip. A poor
woman was asked why she despatched £100 in bank notes direct to the
Controller of the Post Office Savings Bank without her book or any
letter showing what she wanted done, or without even indicating whether
she held an account at all. She simply replied, “I wanted to get it out
of the house: the anxiety was wearing me to pieces lest it should be
stolen, and I was told the Controller would take care of it for me.”
That is surely the supreme advantage which the Post Office system
offers, and it is a backward step to ask poor people to become again
their own bankers, and in fact force them once more to the hiding of
their treasure in the back garden or under the floors.
It is interesting to know that the small investors of the Post Office
Savings Bank follow the rise and fall in the Stock markets with
considerable keenness. A fall in price means an immediate increase in
the number of investments, and of course with a rise the sales are
similarly affected. Many, however, unfortunately invest in sheer
ignorance of what they are doing, and the reputation of the Post Office
suffers in their eyes when they lose by the transaction.
But let us get back to our imaginary depositor. If he wishes to withdraw
from his deposit account a sum not exceeding £1, he can obtain it on
demand from any post office on production of his book, and on his
satisfying the paying officer of his identity as the depositor in the
account. If he wishes to withdraw any sum by the ordinary means he
forwards a notice of withdrawal to the Head Office in London, and he
receives a warrant for the amount payable at any post office named by
him.
If he is in urgent need of any sum not exceeding £10 he can, instead of
forwarding by post a notice of withdrawal, telegraph for the money to
the Head Office, and instructions will be sent by telegram to the local
postmaster to pay him on production of his book and proof of identity.
In out-of-the-way villages the paying officer is often a small tradesman
who has a limited vocabulary and does not readily grasp the meaning of
his instructions from headquarters. The meaning of the word “identity”
was evidently misunderstood by one postmaster, who replied to the Head
Office after paying money to a depositor, “The postmaster is quite
satisfied with the depositor, and finds no identity in him whatever.” I
cannot imagine to what ignominious examination the depositor was
subjected, but as he was paid his money without establishing his
identity, I presume he as well as the postmaster was satisfied.
A depositor can also purchase an Immediate or Deferred Annuity through
the Post Office Savings Bank, and payments are made to him at his local
post office. He can insure his life, and his premiums are paid by
deductions from his deposit account. But this cannot be said to be a
prosperous business. The Post Office is at a disadvantage compared with
more popular Industrial Insurance Societies because of its steady
refusal to employ canvassers.
Broadly speaking, these represent the chief advantages of an account in
the Post Office Savings Bank, and the great principle which underlies
the whole of the undertaking is that every transaction, in whatever
corner of the United Kingdom it takes place, has to be registered at the
Head Office in London. Every depositor's account is entered in a ledger,
and the account must correspond exactly with his deposit book.
The average cost to the Department of every transaction is now about
5d., and it will readily be seen that after payment of 2½ per cent.
interest, and allowing for thousands of small deposits and withdrawals,
there is not much room for profit to the Government out of the business.
For the funds of the Savings Bank are invested in Consols, and the
reduction in the rate of interest on Consols from 3 per cent. to 2¾ per
cent. and again to 2½ per cent. has seriously affected its
revenue-producing capacity. But previous to 1896 a different tale was
annually told, and the total surplus up to that year amounted to
£1,598,767. Then in the years immediately preceding the South African
War, the price of Consols rose considerably above par, and the day of
annual deficits began. A slight profit was again made in the years
1900-1902, but the rate of interest on Consols was then reduced to 2½
per cent., and there has been no appreciable recovery since. No
Government seems inclined to make the obvious but unpopular move of
reducing the interest allowed to depositors.
There is, however, another way of looking at the matter, which perhaps
disposes us less to insist on the Department being managed entirely as a
revenue-producing institution. The advantages to the public outweigh the
comparatively small annual loss which is now sustained—the loss in 1909
was £50,481—and the primary object of the founders of Savings Banks was
benevolence. The Post Office Savings Bank makes no such claim, but it
does aspire to be a convenience to the people of this country.
The depositors are drawn from all classes of the country. Though
originally intended for the benefit of the working classes, the
conveniences provided appeal to almost everybody. The Post Office is
always at hand in every village or town to receive small sums. Cheques
are accepted for deposit, and it is found that many people use their
accounts chiefly as a means by which they can dispose of crossed cheques
received by them.
At the back of this huge undertaking is the credit of the nation: there
is complete security for every depositor, and it is difficult to
conceive of a run on the Savings Bank, although a very large number of
the depositors are of that class which most readily succumbs to a panic.
The Head Office is at Blythe Road, West Kensington, and the size of the
building can be imagined when I say that the staff consists of 3263
persons, of whom 1826 are women. The Ledger Branch, in which every
depositor's account is kept, is managed entirely by female clerks. The
Correspondence and Account Branches are in the hands of the men clerks,
and to them falls the duty of directing and advising the depositors as
to their transactions. Much of the work provides an admirable index of
the ways of the British people. It has been said that a man lays by
money for a rainy day, but the experience of the Controller of the Post
Office Savings Bank is that he more often lays money by for a fine day.
Large sums are annually deposited, only to be withdrawn at the different
Bank Holidays. At Christmas time the largest amounts are usually
withdrawn, and then immediately afterwards, during the first weeks of
January, under the influence of the good resolutions which are usually
formed at this period, vast sums are deposited, and the largest number
of new accounts are opened.
To the outsider the business of the Department may seem to consist
mainly of the simple work of receiving and paying away money, but the
correspondence with the public on matters arising out of their accounts
is a huge item in the day's work. Correspondence is necessary on such
subjects as depositors insane, depositors abroad, depositors married,
husbands' claims, depositors deceased, lost deposit-books, fraudulent
withdrawals, and “depositors apprehensive.” The difficulties and
perplexities of the British public on the subject of money are known to
no person more fully than the Controller of the Post Office Savings
Bank. He is sometimes tempted to wonder what are the benefits achieved
by the Compulsory Education Acts. For instance a depositor writes: “I
received from your General Post Office a paper containing all about
Stock, and I do not quite understand it, whether it is for land, corn,
or silk stuffs. As I am taking up in it will you kindly write and let me
know.” Many farmers who are familiar only with one application of the
word “Stock” have desired to make purchases of cattle through the medium
of the Post Office. And one lady who had exceeded the amount allowed in
her deposit account was asked if she would like to invest the excess in
Stock, and she replied regretfully that her garden was already full up,
and she had no room for more.
A depositor who had presumably suffered from recent fluctuations of
price in the Stock market wrote a letter to the Controller and addressed
the envelope: “The Roleing Stock Department, General Post Office.” It
was delivered in the first place, of course, to the Stores Department,
General Post Office.
A large proportion of the depositors are still unable to read or write.
A man, not connected with any Savings Bank account himself, wrote on
behalf of a depositor and explained his action in this way: “I 'ad the
whole business thro' my 'and cos he was an ilitrate.” This is clearly a
case where a little knowledge may produce a swollen head.
“I am married and wish to carry on as before,” wrote a lady depositor.
This is not the first time a daughter of Eve has made the effort to eat
her cake and have it.
Friendly Societies, Provident and Charitable Societies, and Penny Banks
are allowed to deposit under special concessions as regards limits, and
vast sums are dealt with annually in this way. Large numbers of these
societies are managed entirely by the working people themselves, and the
rules which are drawn up have to be approved by the Department before
any money can be accepted. An application was once received from three
trustees of a Friendly Society addressed to the Postmaster-General, who
was at the time Lord Wolverton. From the alterations in the letter it
was apparent that much discussion had arisen as to the proper manner in
which a letter to his Lordship signed by three persons should be
commenced. “My Lord” was evidently considered ungrammatical, and the
letter eventually started with the words “Our Lord.” The effort to
construct rules which shall pass muster with the Postmaster-General
often appears to tax the members of the working class clubs
considerably. Some try the grand style. “The objects of this club are
the glory of God, the honour of the King, and the decent interment of
our members.” Not so bad for a small burial club. Better, perhaps, still
is this from musicians: “That the objects of the band shall be to work
for Christ's Kingdom, the Bankshire and West Mercia Tabernacle to have
first claim on its services.” Others endeavour to imitate legal
phraseology with wonderful results. “Any member while on the funds
carrying on his proper or improper occupation shall forfeit his
benefit.” It would evidently be no use to plead that though you had
earned other money while receiving benefits your luck was due to having
successfully backed a winner. But in most cases the rules are drawn up
in the people's own idioms. For instance, “Our Society is in case if a
member should have a Pig Die with the Swine Fever or any unnateral death
so as to receive the worth of the Pig out of the Fonds of this Society.
We are cheefly agriculteral laberers.” I like the last touching
confession. I like also the quiet assumption that the Postmaster-General
will know what is the natural death of a pig.
“All our transactions with the General Post Office have been straight
and above-board so far,” wrote the secretary of a society, thus holding
out grim possibilities of what might be expected in the future.
“Any member who has a complaint can give it to the under-mentioned
gentlemen who were elected at the committee.” So runs a rule of a
working man's sick club, and it seems to me a far simpler plan than
sending for the doctor.
“Help one another Infectious Diseases Club,” is the pleasant name of
another society.
But perhaps the most human documents of all are to be found in the
correspondence relating to the claims of deceased depositors'
representatives. In hundreds of cases there are to be found tragedy and
comedy, and glimpses of what the struggle of life means to the working
populations. All accounts under £100 of deceased depositors who have
left no will have to be distributed by the Postmaster-General under the
Statutes of Distribution, and a difficult matter this is sometimes in
the case of large families. Payment of these small sums is also made on
production of a will, and these documents are often pathetic as well as
amusing. Here is one: “I leave everything to my wife. I did not know it
was wrong to sell those hens. I will be a teetotaller as near as
possible. I have said things which had no meaning.” This was evidently
written when the man was seriously ill, and we seem to understand at
once his own little weaknesses as well as the trials of his wife. One
likes especially the way he hedges about the drink question: there is
evidently a chance of his recovery from the illness.
A mother on claiming the money deposited by her dead son was asked if
the father were alive. “Father living but insignificant,” was her
illuminating reply. A claimant to the money of a deceased depositor
explained his omission to furnish a correct list of the next of kin in
this way: “Her relations are robbing me through thick and thin, and I
think it is my turn to start.” The Department declined to admit the
cogency of the argument.
A person on applying for an insurance through the Post Office Savings
Bank was asked among other questions to state the cause of his father's
death. His answer was: “I don't know; I can't remember; but it was
nothing serious.”
The son of a depositor claimed his father's money, but inquiries made by
the Department revealed the fact that he was born before marriage, and
consequently could not claim as next of kin. The claimant was delicately
informed of his disqualification. He then tried to establish a claim as
creditor of his father's estate, and sent in a bill containing the
following item: “Shock to system on learning of my illegitimacy, £2,
5s.” This is what the late President Kruger would have called “moral and
intellectual damage.”
Here is a bill for an Irish wake charged against the estate of a
deceased depositor:—
Bought of —— Grocer, &c.
6 gallons of whisky £5 8 0
12 bottles cordial 0 3 0
½ lb. tobacco 0 2 0
½ lb. tea 0 1 6
Drinks 0 0 8
—— —— ——
£5 15 2
==== ==== ====
Nobody can complain of the last charge being excessive, but we are
curious to know to what use if not for drinking purposes the other
liquids were put.
A man of advanced years applied in the Inquiry Office of the Department
for an annuity, and he was asked to produce some evidence of his age in
the shape of a certificate of birth or of baptism. He said he had no
certificate of birth in his possession, but it might be possible for him
to obtain a certificate of his baptism. The official told him this would
meet the case, and the man departed. At the end of a fortnight the old
man returned with a certificate of his baptism; he had complied with the
instructions, although the certificate showed that the ceremony had only
taken place the preceding day. When the poor man realised that this did
not remove the difficulty he was most unhappy: he said he had had great
difficulty in obtaining the certificate, and certainly the commercial
value he attached to the rite seemed to justify the clergyman's
reluctance to baptize this man “of riper years.”
The same unconsciousness of the importance of a religious ceremony is
often observed in the case of people who consider themselves married
though they have no certificate.
Many of the old Trustee Savings Banks have during the last twenty years
transferred their funds to the Post Office, and when any particular bank
is closing its doors officials from the Post Office Savings Bank attend
to advise depositors who consent to their moneys being handed over. Here
is a true conversation which took place when the Whitechapel Savings
Bank was closing. There entered the bank a working man and a working
woman.
_Working Man._ Mornin', sir; what I came to see yer abaht is just this
'ere. If I puts my little bit in the Post Horfice 'ow abaht 'er
(_pointing to the lady_) when I dies? Will there be any trouble abaht
payin' 'er? There ain't no kids.
_Clerk._ Of course you are married: in that case it would be all right.
_Working Man (doubtfully)._ Married! don't exactly understand, sir.
_Clerk._ Well, have you got any marriage lines?
_Working Man to Working Lady._ 'Ave, we, Sal?
_Working Lady (confidently)._ Na, not likely.
_Working Man._ Well, young man, it's like this 'ere; we've lived
together twenty year: she's my missus, I'm 'er 'usband, and I wants 'er
to 'ave my little bit when I goes aloft. Ain't that it, Sal?
_Working Lady (coyly)._ Yus.
_Clerk._ Well, did you go to church to be married?
_Working Lady._ Get out; not likely.
_Clerk._ Did you go to a Registry Office?
_Working Lady (indignantly)._ Not me.
_Clerk._ Well, you'll excuse me saying so, but you are not married.
_Working Man (puzzled)._ I dunno; yer see my missus and I 'ave been
twenty years together, and it's 'ard on 'er if she can't get this 'ere
brass. Can't say as it ever occurred to us to go to church or a Horfice.
What am I to do, young man?
_Clerk._ Why don't you get married?
_Working Lady._ 'Ow much does it cost?
_Clerk._ Oh, only a few shillings.
_Working Man._ Well, Sal, what do you think?
_Working Lady (tossing her head)._ Oh, if it won't do us no 'arm, I
'spose we'd better.
_Working Man._ It'll make the money right for you, Sal.
_Working Lady._ Well, come on: it's all them thievish lawyers—it's
another do to get money out of yer. The idea for the likes of us to go
to church. Oh my!
But a week or two afterwards the couple returned and produced their
marriage lines.
_Working Man._ Well, it's all right; we planked our money down, and
we're wery much oblig'd to you for the suggestion. Sal's been a good 'un
to me these 'ere twenty years, but it never occurred to us, or we'd 'a
done it before. It jest made us both laugh outright when the parson chap
harsks me if I'll 'ave 'er. It do seem ridic'lous, but the law is the
law, and we ain't none the worse. Much obliged for the suggestion. Will
you 'ave anythink, young man?
But the clerk with stern probity declined, and said magnificently, “I am
glad you have done the right thing: it is what you ought to have done
twenty years ago.” The man he had evidently converted to a partial
recognition of the value of Holy Matrimony, but he saw that the lady was
hopeless from the first. The Savings Bank is evidently a powerful
lieutenant to the Church in its insistence on the commercial benefits to
be derived from baptism and matrimony.
The lost book is often a fruitful source of curious explanations and
experiences. The moment when we start saving any money is of course one
for much personal satisfaction. In some cases it may even induce wild
exhilaration. A lady wrote to the Controller this delightful letter:
“Having joined your Bank I put my Bank Book in the fire. Will you please
see to it.” Another depositor writes: “My wife and me was having some
words and she broke the book in pieces.” And yet another in the same
vein: “Through a falling out with my wife she tore the Bank Book. I
enclose the Relics.” The husbands, however, do not always have it their
own way, and one wife writes as follows: “I had a quarrel with my
husband on the day I lost the book. He stole my book once before. He
denied the same as he does now.” We must admit that the evidence against
him is merely circumstantial. Another man takes a morbid view of the
characters of church-goers. “As I left it in church I do not expect ever
to get it back with some other matters.” People have often complained of
the want of privacy at our post offices when we desire to transact
confidential business there. But we do not all suffer from shyness or
modesty. A lady writes: “I was not aware that any leaves came out of my
book. I was travelling about so much that I sewed it up in my stayes,
and I never took it out except in the Post Office.”
An old lady informed the Department that she had lost her book, which
she said stood in her maiden name. When asked for her marriage
certificate, she said she was not married, and explained, “I used to
take very strong tea, which has made my memory bad.” Perhaps it was a
case of love's old dream.
Then the explanations which have to be furnished for differences of
handwriting are often very human and amusing. For instance: “I am
instructed by my Father to write and state the difference between his
handwritings may have been the cause of his rheumatics.” Those who saw
the handwriting were not surprised. Another writes: “The difference in
the riten is that I have been promoted.” He was clearly not examined in
orthography before his advancement. Another application for an
explanation of difference in handwriting was met in a rather cryptic
fashion. A medical certificate was forwarded: “This to certify that J.
S., residing at——, is suffering from an inflamed foot.”
I have given enough instances to show how closely the Savings Bank comes
into touch with the people. Indeed it is the most human, in its
relations, of all the departments of the General Post Office. It looks
more closely into the inner life of the man and woman: it possesses also
the people's secrets, which are safe in its keeping.
Efforts have often been made to compare the saving habits of the British
people with those of other countries, but little reliable guidance can
be obtained from the comparative statistics of the various Postal
Savings Banks. In some countries, there are more facilities for saving
money in private institutions and public concerns; in others there are
considerably less than in England. Still it is to be feared that the
younger generation, especially in our large towns, do not save to any
great extent. The temptations to spend are at every corner, and perhaps
the best recommendation of the Post Office Savings Bank, in the eyes of
the masses, is that withdrawals are easy. Many people would, however,
like to see the old idea of a Savings Bank more strongly emphasised, not
only by the people, but by the management. But this is a question of
policy with which we have no concern.
I ought to add that the example of Great Britain in establishing Post
Office Savings Banks has been followed in our colonies and in foreign
countries. Many countries have systems modelled largely on our own, and
in the case of several of our colonies, arrangements exist by means of
which accounts can be transferred from the Savings Bank of the mother
country to that of the colony.
Nor must I omit to mention the introduction of “Home Safes.” The
depositor places his small savings in the safe, the key of which is kept
at the post office. When the amount has reached a substantial sum it is
deposited in his Savings Bank account. This means increased
opportunities for saving to the depositor, and economy to the
Department.