ON THE ORIGIN OF SAVINGS BANKS.
"It would be difficult, we fear, to convince either the
people or their rulers that the spread of Savings Banks is
of far more importance, and far more likely to increase
the happiness and even the greatness of the nation, than
the most brilliant success of its arms, or the most
stupendous improvements of its trade or its agriculture.
And yet we are persuaded that it is so."--_Edinburgh
Review_, 1818.
Great Britain can with justice, we think, lay claim to the original
establishment of the system of Savings Banks. One well-known
writer[11] on this and cognate subjects has traced them to
Switzerland, if not to Hamburg, at a time prior to any experiments
with them in this country; but from the best investigation we have
been able to make, the institutions in question were something very
different from Savings Banks as English people understand them,
dealing, as they did, in business more like the sale of deferred
annuities. The institution at Hamburg, which is said to have been
founded in the year 1778,--and which is interesting to readers of
history as being one of those whose coffers the First Napoleon swept
of their funds, thus giving it its death blow,--simply took the spare
cash of domestic servants and handicraftsmen, and granted annuities on
the members arriving at a certain age. No withdrawal of money was
allowed. In this country the first proposals for a bank for savings
were made in 1798 or 1799, according to the judgment of the reader as
to which of the two original schemes best deserves the name of Savings
Bank, or whether either of them is entitled to the honour. The two
persons whose names it is customary to speak of in connexion with the
earliest people's banks are those of the well-known Priscilla
Wakefield, and the Rev. Joseph Smith of Wendover. In the mind of each
of these estimable persons we think the question of becoming the
bankers for the poor around them was at first only a subordinate
measure, and quite auxiliary to other matters deemed of greater
importance. Mrs. Wakefield's scheme arose out of a well-meant anxiety
to better the condition of the weaker and more defenceless portions of
the community, an object to which she devoted much of her literary
ability, and was first started in 1799, for the benefit of women and
children in her own village of Tottenham, and under her immediate
superintendence. Members paying according to their age certain sums
per month became entitled to a pension after sixty years of age; in
case of sickness, four shillings a week; in case of extraordinary
misfortune a certain amount could be withdrawn; in case of death a sum
of money was allowed for the funeral. Honorary members paid
subscriptions, which went to meet deficiencies and current expenses.
In 1801 there was added, first, a fund from which loans were made to
those who had been members for six months; and second, a regular bank
for savings. The interest given in the latter case was the same as
that charged in the former, or five per cent. The clauses relating to
children were such as almost to entitle the founders to the honour of
being the originators of Penny Banks, if nothing else; juveniles were
encouraged to deposit their penny per month, which was kept for them,
along with interest, until such a time as the accumulation was needed
for apprentice fee, clothes, or such like object. The management of
this Parent Institution, as it may well be called, was equitably
divided amongst the honorary and the "benefited" members. In 1804 the
Tottenham Bank was more regularly organized, and Mr. Eardley Wilmot,
M.P. and Mr. Spurling, were appointed Trustees.[12]
The Wendover institution, which was really started a year before that
at Tottenham, partook at first so largely of the nature of a charity
as to make it almost of the character of a private undertaking between
a rich and benevolent rector and his poor parishioners. Still, there
was here the germ of that of which we are in search. Mr. Smith, and
two of his richer parishioners, who joined him in the work, circulated
proposals in the summer of 1798 to receive any surplus money which any
of the working population round them felt they could spare--provided
it were not less in amount than twopence; to keep a strict account of
every deposit made in this way; and then to repay the money during the
winter season, or generally about Christmas, with the addition of one
third of the whole, which would be allowed as interest on their
deposits--or to speak, perhaps, more correctly, as a bounty for their
economy. Any depositor might receive his money before Christmas on
demand; and it was further stipulated that, in case of sickness or
loss of employment, these fruits of his savings should not preclude
him from parish relief, if otherwise he could obtain it. A Christmas
dinner was the comfortable addition to the good round sum which,
generally, was garnered at this time, the dinner, too, being provided
by the three directors. It is rather curious that the time chosen to
receive deposits was limited to Sunday evenings; but we suppose this
would be justified by the scriptural text, not generally applied in
this fashion, which they chose for their motto, "Upon the first day of
the week, let every one of you lay by him in store, as God hath
prospered him." For several years these benevolent gentlemen carried
on their operations, and had generally about sixty subscribers, who
deposited from five to ten pounds every season.
In February, 1807, Mr. Whitbread introduced his Poor Laws Amendment
Bill into the House of Commons, and went over the whole ground of the
condition and the wants and requirements of the working population in
an eloquent manner. That speech--which must have been of several
hours' duration--dealt with the past legislation on the subject, and
commented on the various steps which ought to be taken, over and above
the mere collection of poor-rates, to alleviate the condition of the
poor. After dwelling on the subject of national education, and hinting
at a mode such as was eventually brought into operation many years
afterwards, Mr. Whitbread went on to describe the want felt by the
poor of some safe and profitable investment for their earnings; "that
so few are found to make any saving may in a great degree be accounted
for by the difficulty of putting out the little they can raise at a
time." He described the action of Friendly Societies, and showed that
at that early period they were open to the same objections that are
now being continually raised against them. "Mr. Malthus,"[13] said Mr.
Whitbread, "had just proposed the establishment of county banks, but
he would go farther than Mr. Malthus, and extend his principle." It
seemed to him that there would be less trouble in his proposals than
in the less extensive proposals of Mr. Malthus.
Mr. Whitbread then went into the matter of his proposals under this
head, and we give his own words:[14] "I beg gentlemen not to start at
what I am about to suggest, which to many who hear me may be quite
new, but to afford it their cool and deliberate consideration. I would
propose the establishment of one great national institution, in the
nature of a bank, for the use and advantage of the labouring classes
alone; that it should be placed in the metropolis, and be under the
control and management of proper persons; that every man who shall be
certified by one Justice of the Peace to subsist on the wages of his
own labour shall be at liberty to remit to the Accountant of the
Poor's Fund (as I would designate it) any sum from 20_s._ upwards, but
not exceeding 20_l._ in any one year, and not more than 200_l._ in the
whole." He then proceeded to show how the money might be invested in
Government Stock, in the name of commissioners to be appointed, and by
this means interest would be allowed to depositors at the highest rate
possible. "The plan," added Mr. Whitbread, "will be more amply
detailed in the Bill itself, and such regulations are provided as
will, _with the intervention of the Post-office_, give ample
facilities to its execution. Gentlemen need not to be told that the
perfection attained in the management of that great machine is such as
to give the most easy and rapid means of communication with the
metropolis, much greater, indeed, than usually subsists between the
remote parts of any county and its capital town." Mr. Whitbread then
went on to say, that in addition to this form of investment, the same
machinery might be employed to give those who might wish it an
opportunity of purchasing annuities by the payment of stated regular
sums up to a certain age; and even to insure their lives. So strong,
indeed, was this feeling, that he eventually proposed, as an addition
to his bill, that under the same management there should be an
Insurance-office for the poor, with properly-calculated tables and
modes of payment. We need not here dwell upon the miscellaneous items
which he fully went into in his admirable speech. He finally begged
the patient attention of the House and the country to the
consideration of the general outline of the plan which he had
proposed, in order to encourage the labourer to acquire property, and
to secure to them the certain and profitable possession of it when
acquired. He had the greatest hope of a happy effect from its being
put in practice. "If the poor," said he, "should be found to avail
themselves of it to any extent, the advantage to them and the country
would be incalculable, and the expense attending it would speedily be
covered." This Bill went through several necessary stages; there was
little objection manifested to Mr. Whitbread's plans for securing the
savings of the poor, but there was also little anxiety to forward the
measure. Mr. Whitbread in this, as in many others of his wise
proposals, was far ahead of his time, and he suffered the matter to
drop towards the end of the session.[15]
One at least of the important organs of public opinion frowned upon
Mr. Whitbread, and laughed at his scheme; an organ whose frown and
whose laugh was no joke at that date. It has not unfrequently been a
subject of remark how persistently the _Quarterly Review_ stood in the
way of progress, clogging the wheels of all kinds of reform. In
matters of this kind, however, it generally showed a most enlightened
policy, and was not unfrequently in the van of improvement instead of
obstruction. It was not so always with its more powerful rival, the
_Edinburgh Review_. It commented upon Mr. Whitbread's "strange
project" of uniting the savings banks throughout the kingdom in one
national establishment, and his minor proposals under that head, and
very warmly ridiculed all. "Neither from theory nor from experience,"
it concludes an article, "are we able to discover any kind or degree
of good as likely to result from so vast a project; though it is easy
to see that it might be productive of infinite confusion, trouble, and
expense. In fact, every savings bank is perfectly competent in itself
to transact the whole of its affairs, and can have no great difficulty
to provide the requisite facilities or securities without either
disturbing its neighbours, or withdrawing the attention of Government
or the Legislature _from their proper concerns_."
Before we come to the plans and exertions of Mr., afterwards Dr. Henry
Duncan, of Ruthwell, we ought to speak of the original foundation of
the savings bank at Bath. The idea of establishing a bank for taking
the wages of industrious domestic servants only, and granting them
interest for their money, originated with Lady Isabella Douglas in
1808. The managers consisted of four ladies and four gentlemen. No
servant could deposit more than 50_l._, and the entire amount of the
funds in the bank could never exceed 2,000_l._ A servant might deposit
up to 50_l._, withdraw the money and place it in safety, and deposit
again in the servants' bank. Interest was allowed at four per cent.,
and the money could be withdrawn at will. This scheme, so far as it
proceeded, was very successful; so much so, that an endeavour was made
in 1813 to convert it into a general savings bank, which should know
no limit, either in the amount of the deposits or in the class of
people from whom the deposits could be taken. For this purpose a
committee, "highly respectable for their rank, ability, and
benevolence," met frequently at Bath; but only to find, "after much
deliberation," that these conditions "were utterly impracticable."[16]
In 1815, the Provident Institution of Bath was projected, on very
different conditions; and this time, through the exertions of Dr.
Haygarth and the Marquis of Lansdowne, who was president, the bank was
successfully floated. This bank was essentially the first of its kind
in this country, and upon its basis have been formed almost all
subsequent banks of any note. The sums deposited were invested in the
public Funds, and each man's interest at this early period varied
according to the price of the Funds on the day when the investment was
made for him.
In November, 1815, the Provident Institution of Southampton was
established, principally through the exertions of the Right Hon.
George Rose, who was appointed president, and who soon afterwards
wrote an account of the undertaking.[17] The exertions of Mr. Rose on
behalf of savings banks will frequently require to be spoken of in
subsequent pages. The Southampton Bank was an improvement on the Bath
institution, having copied several of the details of the bank at
Edinburgh. The average rate of interest given was four per cent.
Notice had to be given for withdrawing deposits. One regulation, new
at that period, which was a suggestion of Mr. Rose, empowered the
officiating clergyman or other responsible person, in adjacent
parishes, to receive sums "on account of the institution," and remit
them to the treasurer at Southampton. It was stipulated, however--and
this had an ill effect upon the public, though the proviso was by no
means unreasonable in itself--that the institution should not be
answerable for the money until it absolutely reached the office. We
will here refer to two other original English savings banks, quite
equal in importance to those of Bath or Southampton. The Exeter
Savings Bank, since better known as the Exeter and Devon Bank, was
established in 1816, principally through the exertions of Sir John
Acland, one of the county members. The rules of this bank limited the
amount which could be deposited to 50_l._ in the first and second
years, and 25_l._ in any succeeding year. The distinguishing feature
about the Exeter bank was the application, attended with much greater
success, of the Southampton plan of rural or branch banks. In 1817,
there were sixty of these branch banks, all contributing sums to the
parent bank through village clergymen, who acted as the agents. The
plan only entailed a trifling expense for printing, postage, &c., and
even these expenses were paid out of a fund raised by voluntary
contributions. At the date of the first enactment relating to savings
banks, this bank had 946 depositors, who had paid in 14,525_l._ in
1,380 deposits. The interest given was at the rate of four per cent.
Within the two years of which we have spoken, only 984_l._, or about a
fifteenth-part of the deposits, were paid as withdrawals.
The original Hertford Savings Bank was a charitable concern, after the
fashion of Mr. Smith's at Wendover. "The Sunday Bank," as it was
called, was established about the year 1808, by the vicar of the
place, the Rev. Thomas Lloyd. Sums of from sixpence to two shillings
were received by the benevolent pastor from his poorer parishioners
after morning service on Sundays, and in this way about 300_l._ a year
was invested between 1808 and 1816. The money did not accumulate from
year to year, but was repaid on New Year's day, with the addition of
_ten_ per cent. interest, which the vicar was able to give by the help
of some charitable funds at his disposal.
We must now, without referring to other early banks, such as the
important institution in St. Martin's Place, London, and other
societies, turn to Dr. Duncan, whose exertions on behalf of savings
banks were much greater than those of any other person, and which
exertions, more than any original suggestions which he may have made
with regard to them, entitle him to the foremost place in any history
of savings banks. Dr. Duncan's claim to be considered the founder of
savings banks rests on the ground of his having originated and
organized the first self-sustaining bank, and in having succeeded in
so arranging his scheme as to make it applicable not to one locality
only, but to the country generally.[18] It remains to be seen whether
the bank established by Dr. Duncan in his own village answers the
description here given of the distinctive character attaching to the
banks of his proposing. It is very true that all the banks established
up to 1810 partook very much of the character of eleemosynary
institutions, supported in great part by the benevolence of the rich,
and therefore very unsuitable to some localities, where the benevolent
rich did not preponderate. Dr. Duncan's great merit--merit for which
he has received neither enough credit nor praise, but which should
entitle him to a high place in the ranks of those who have sought to
do their fellow-men good service--seems to us to lie in having deeply
studied the nature and wants of the industrial classes; in having
modified existing proposals in order to make them suitable to the
general requirements; and, finally, in having laboured with
unremitting energy to make his plans known around him, and to secure
their general adoption. A writer in the _Quarterly Review_ of October,
1816, incidentally referring to Dr. Duncan and his proposals for
parish banks, says, "It is our belief, founded on no slight
investigation, that but for this Scotch clergyman, there would at this
time have been found only a few insulated establishments for the
savings of industry, of which the intelligent and wealthy would have
had little knowledge, and from which the lower classes in general
would have derived no advantage."
Henry Duncan, who was the son of a Dumfriesshire clergyman, was born
at Lochrutton manse, in that county, in the year 1774. At the age of
twenty-five he too was ordained a clergyman, and appointed to the
charge of the parish of Ruthwell, a remote locality in the same
county. When very young, it is said, he showed remarkable powers of
mind; and it appears he early exercised them in writing for the young,
with whom he was an especial favourite. Before he was thirty he had
made great progress in geology, and a book he published on the subject
when he was about that age gained him the friendship of Dr. Buckland
and Mr. Sedgwick. Perhaps, however, he showed most zeal during all the
periods of his life in the prosecution of schemes for the benefit of
the poor and distressed around him; and his manse in this way, lonely
as it was, and far from the busy haunts of men, soon became a place of
resort to much of the young and remarkable talent to be found in that
part of Scotland. David Brewster, and James Grahame, the Sabbath bard,
Dr. Chalmers, and Dr. Andrew Johnson, were frequent visitors beneath
his roof; Robert Owen, then an amiable enthusiast in the walks of
philanthropy; Thomas Carlyle, a young man who had not then emerged to
fame; Robert McCheyne, and many others who subsequently rose to
eminence, were friends of the village pastor, and frequently met to
talk over with him different schemes of practical benevolence. "Few,
indeed," says his biographer, "whose lot has been cast in a retired
spot like that of Ruthwell, have been more fortunate in attaching the
affection and good-will of so many of the best class of their fellow
men," and the boast is neither an idle nor a vain one. Mr. Duncan must
have been no ordinary man to have brought round him such a circle of
friends. His literary abilities were of no mean order, but gave a
charm to all he wrote. Delighting in humble usefulness, he edited, in
1809 and 1810, a number of Tracts for the instruction and moral
improvement of "the lower orders," to use the vulgar term then in
constant use. The greater part of the work seems to have been the
production of his own pen. One series of these Tracts, called "The
Cottage Fireside; or, The Parish Schoolmaster," was afterwards
published separately with Duncan's name attached, and had a very large
sale at the time. "In point of genuine humour and pathos," says a high
authority of that period,[19] "we are inclined to think it fairly
merits a place by the side of 'The Cottagers of Glenburnie;' while the
knowledge it displays of Scottish manners and character is more
correct and more profound." Whether the plans which he laid for the
benefit of the poor, and which occupied so much of his after life,
came up at any of the _réunions_ at his house, we have no means of
knowing. However it was, we have Mr. Duncan's own statements to show
that they were originated in his mind by the frequent discussion at
that time of the question of poor-rates, and the endeavours on the
part of many of his friends to prevent their introduction into
Scotland. It is also clear, that though Mr. Whitbread's name is never
mentioned, the parish minister had heard of his scheme, and had been
much struck with it. The result of Mr. Duncan's reflections on the
subject were given in the _Dumfries Courier_, with which paper he
seems to have had some literary connexion. A discussion ensued in the
columns of this paper, in the course of which some books and pamphlets
on cognate subjects were forwarded to Mr. Duncan by Mr. Erskine,
afterwards Earl of Mar. Among the pamphlets he found a very curious
and ingenious paper by John Bone, the originator of a charitable
institution in London, the plan of which was there sketched. The
Society was called by the whimsical title of "Tranquillity, or an
institution for encouraging and enabling industrious and prudent
individuals to provide for themselves, and thus effecting the gradual
abolition of the Poor's Rate." This pamphlet, which we have carefully
examined, contains, among much matter of a visionary and impractical
kind, many proposals for the safe keeping of the savings of the poor
similar to those acted upon in the case of the charitable bank at
Tottenham. These subordinate provisions attracted the notice of Mr.
Duncan, as he himself admits, and he thought that if he could in any
way reduce them to a regular scheme, the result would be beneficial to
the working classes, wherever they might be adopted. He resolved to
form some such scheme and give it a fair trial in his own parish,
when, if successful, he would endeavour to get it introduced
elsewhere. With this object he published a paper, as a sequel to the
discussion he had commenced in its pages, in the _Dumfries Courier_,
in which paper he directly proposed to the gentlemen of the county the
establishment of a Bank for Savings in all the different parishes of
the district. "The only way," said Mr. Duncan in making these
proposals, "it appears to me, by which the higher ranks can give aid
to the lower in their temporal concerns, without running the risk of
aiding them to their ruin, is by affording every possible
encouragement to industry and virtue; by inducing them to provide for
their _own_ support and comfort; by cherishing in them that spirit of
independence which is the parent of so many virtues; and by
judiciously rewarding extraordinary efforts of economy, and
extraordinary instances of good conduct. Friendly Societies, excellent
as they are in their way, do not in every respect appear to be
calculated for this intended effect; advantages are held out which
cannot always be realized, but in simple Parish Banks there can be no
objection of this sort." Mr. Duncan met with little response to his
appeals from the gentlemen of the neighbourhood, but he resolved to
make the attempt single-handed. The fact that an institution of the
kind contemplated could possibly be carried out by a single
individual, however benevolently disposed, is evidence enough of that
person's sagacity and perseverance; but the ordinary difficulties were
greatly increased by the circumstances in which this particular parish
where Mr. Duncan was located was placed. Few parishes, we are told,
presented so many and such unusual obstacles to the progress of a
scheme of this kind. Almost every adult member of the parish belonged
to some Friendly society, and many of these found it extremely
difficult to fulfil their engagements to the established societies.
Again, there were few, if any, resident heritors or proprietors of the
land to whom Mr. Duncan could look in any difficulty that might arise,
or to whom he could look for any assistance of a pecuniary kind.
Nevertheless, he resolved to commence. He had arrived at that
experience of human kind which made him understand that, in even the
poorest family, "there are odds and ends of income which are only too
likely to get frittered away in thoughtless extravagance." Could he
but induce the mass of the people to comprehend the value of the
savings which might by a reasonable economy be gathered from this
source alone, and could he succeed in supplying the means of investing
these savings securely, affording them at the same time the prospect
of a fair rate of interest, not from charity, but from the resources
of trade, he was confident the hopes he cherished would be
realized.[20] The scheme was started in May, 1810, and savings to the
amount of 151_l._ were deposited under the stipulated conditions
during the first year. In the two succeeding years they rose to
176_l._ 241_l._ and in 1814 to 922_l._
Mr. Duncan's work was far from completed when even his most sanguine
expectations were realized in the progress of the Ruthwell Bank. His
advice and assistance was now continually sought in aid of the
formation of similar institutions, both in Scotland and England. In
1813, "the Edinburgh Society for the Suppression of Beggars" conceived
the idea of adding to their already extensive operations a Savings
Bank on some similar principle to his. A neighbour of Mr. Duncan's,
who was also a member of the Edinburgh society, communicated a full
account of the Ruthwell Bank, and all the accounts of it which had up
to that time been published. The opening of the Edinburgh Bank, of
which we shall presently speak more at length, took place in 1814. In
1814, Mr. Duncan paid a long promised visit to Kelso, in order to
forward the proposals for a Savings Bank at that place. Mr. Duncan
relates[21] that during his journey to Kelso he passed through the
town of Hawick, and was much gratified to find that his scheme was
freely talked of there. In the shop of one of the booksellers of the
town he found a large number of copies of an account of the Ruthwell
Bank wet from the press, which had been taken from the pages of the
_Dumfries Courier_ and supplied by himself. These handbills, which
likewise gave a copy of the Rules of the Parish Bank, had been printed
by order of the magistrates of the county at their ordinary meeting.
Finding that his scheme had many favourers in Hawick, he promised to
call on his journey home and assist them in the formation of a bank.
On his arrival at Kelso an important meeting was held, with the Duke
of Roxburgh in the chair, when Mr. Duncan addressed the meeting; the
Kelso Savings Bank, one of the most important of the Scotch
institutions, being the direct result. The number of letters which Mr.
Duncan received and wrote per day is described as something enormous;
they arrived by every post, not only from his own and the sister
country, but even from Ireland. Not only did these letters contain
requests for information and advice; but they frequently were of a
controversial nature, and generally from such people, ardent friends
of the poor, as required consideration and some reply. That Duncan was
an agreeable and clever correspondent is evident from his published
letters; that this correspondence was voluminous we can well believe.
With a view of lessening the amount of his labours in this respect, he
was induced to publish a full account of his scheme, together with all
the rules and regulations for its working; and this pamphlet, which
came out in 1814, went through three editions very rapidly. Even at
this date Duncan's "Essay on the Nature and Advantages of Parish
Banks" will well repay perusal, and besides, its intrinsic worth as a
literary production is interesting as the first published pamphlet on
a subject which will always possess attractions to the philanthropist,
if to none else. We have the clearest evidence that Mr. Duncan
laboured with uncommon zeal to spread a knowledge of the plans he
proposed, and to help to their general introduction; and it is a
matter of wonder to us, that, whilst many names are familiar to the
world who did not do a tithe of the real hard work he did to benefit
the poor around him, Duncan's name should be for all essential
purposes really unknown, and that but for the filial regard of his
son, scarcely an account of his existence should have survived
him.[22] Speaking during his life time, the _Quarterly Review_ warmly
noticed his labours of love: "Justice leads us to say that we have
seldom heard of a private individual in a retired sphere, with
numerous avocations and a narrow income, who has sacrificed so much
ease, expense, and time, for an object purely disinterested, as Mr.
Duncan has done." Some years before his death, in 1846, Mr. Duncan
attained to the honorary degree of Doctor of Divinity, and he was for
one year chosen Moderator of the Assembly of the church to which he
belonged. The Duncan Institution at Dumfries, one of the few mementos
of the man who did so much for Savings Banks, serves the purposes of a
Savings Bank in the principal town of his native county, a statue of
Dr. Duncan being very appropriately placed in front of it.
Not long after the establishment of the Edinburgh Savings Bank, there
was great contention as to whether that bank or Dr. Duncan's at
Ruthwell had the priority of merit on the score of general advantage.
Pamphlets were written on the subject, not always without bitterness,
and even the great _Reviews_ interfered. The dispute was scarcely
called for at that early period, seeing that posterity is best able to
judge of such matters, and there was nothing dependent upon an earlier
settlement. The Edinburgh bank followed the village bank by three and
a half years, so it was not a claim for priority of establishment. The
question as to which of the two possessed the materials best fitting
it to be a model for all subsequent banks would not be so easily
settled; and, in fact, this was the point in dispute. Seeing the
question was one of considerable importance for many years, and is so
still in an archaic point of view, we cannot do better than attempt to
give some idea of the difference between them, as gathered from the
two accounts now before us.[23] Unquestionably the arrangements of Mr.
Duncan suffer considerably by a comparison of points, and though we
admire the character and arduous labours of the man, there is not the
slightest need that we should abstain from hostile criticism of his
measures. For example, Mr. Duncan laid great stress on the fact of his
bank being the first self-sustaining bank, and the first not partaking
to any extent of the nature of a charity. It will be seen how far this
was absolutely true. The Ruthwell institution consisted of ordinary,
extraordinary, and honorary members. The ordinary members were the
poor who deposited their savings; the extraordinary, those who paid to
an auxiliary fund an "annuity" of 5_s._, or a single donation of
2_l._; and honorary members were those who paid to the same fund an
"annuity" of 1_l._, or a single donation of 5_l._ The general business
of the society was transacted by a Court of Directors, consisting of a
Governor, five Directors, a Treasurer, and one or more Trustees, to be
chosen from the honorary and extraordinary members. The court acted
under the superintendence and control of a Standing Committee, which
consisted of fifteen persons chosen from the self-same kind of
members. Both these bodies were subordinate again to the General
Meeting, composed of all the members of the two courts mentioned, and
all the ordinary members of six months' standing. We scarcely think
there could be any possible necessity for such elaborate machinery. In
circumstances such as the rural population of Ruthwell, were cast, one
would have supposed that rules as little stringent as possible,
hampered with conditions as few as possible, would be needed, to
induce that population to save the trifles they could spare.
Inducements were held out to encourage and reward the frugal and
attentive; and so far admirable: but the system of fines inflicted
upon those who did not deposit a certain sum each year was a
questionable proviso. Mr. Duncan put the case very plausibly in his
_Essay_, where he said the chief defect of the scheme was, originally,
the want of some strong motive for regular payments; and, "as what we
have no pressing motive to do at a particular time we are apt to delay
till it is beyond our power to do it at all," he decided to fix a
small sum as penalty, should not a certain moderate amount be
deposited each year, a decision which we think was neither proper nor
wise. The regulations acted upon in the case of a proposed new member
were, we think, equally uncalled for, and likely to scare the
well-disposed away, rather than induce them to join. Before a person's
first deposit could be received, the elaborate machinery of management
commenced to make inquiries into the age, the family affairs, and
moral conduct of the proposed contributor, and according to the report
which followed, it was considered whether his deposits would be
admitted at all, or if admitted, what rate of interest it would be
proper to allow. The society lodged its money with the British Linen
Company, and got five per cent. interest for it. Four per cent. was
the usual interest allowed to depositors; to those, however, of three
years' standing whose deposits reached 5_l._, an indulgence of the
higher rate of 5 per cent. was made, provided the depositor wanted to
get married; in case of his having arrived at the age of fifty-six; to
his friends in case of his death; or, fourthly, in case the possession
of the money _should appear to the Court of Directors_, after due
inquiry, to be advantageous to the depositor or his family.[24] To put
a climax, as it were, upon this charitable disposition of a man's own
hard-earned savings, we would merely recite the fifth statute, which
directs that "when the depositor shall have become incapable of
maintaining himself, from sickness or otherwise, a weekly allowance
may be made to him, _at the option of the Court of Directors_, out of
the money he has deposited."
The auxiliary fund, to which the honorary and extraordinary directors
were required to contribute, was employed in awarding premiums to
those who were most regular with their deposits, especially to those
regular depositors who should have exhibited proofs of superior
industry or virtue. It may well be thought that, in such delicate
matters as were thus dealt with, differences of opinion would arise,
so it was wisely provided, that any aggrieved member should have the
power of appeal from the Court of Directors to the Standing Committee,
and from the Standing Committee to a General Meeting, whose decision
should be final. "The example set by Dr. Duncan at Ruthwell," says Mr.
Smiles,[25] "was shortly followed in many other parishes in Scotland,
and in most of the principal towns in England," and, so far, we have
seen this is true. What follows is certainly open to question: "In
every instance, the model of the Ruthwell Bank was followed, and the
vital, self-sustaining principle was adopted. The Savings Banks were
not eleemosynary institutions, nor dependent upon anybody's charity or
patronage; but their success rested entirely with the depositors." Our
readers may judge from the details of management which we have given
how far this is borne out by the facts of the case; for ourselves, we
are slow to take from the merit which undoubtedly should attach to Dr.
Duncan. There were, doubtless, many circumstances connected with the
minister's own parish which made the arrangements to which we have
referred more excusable; but there must have been many districts where
the poor would never suffer themselves to be patronized, petted, or
provoked in the same manner. Hence the inapplicability of the details
to the country generally. Real, honest, independent workmen have
always had a great dislike to be experimented upon, "raised," or
"elevated," in the sense that some men use the terms; what was felt to
be required at this early period was, that there should be afforded
some facility for the depositing, without any unnecessary trouble or
annoyance, such small sums as the poor might have to spare, and wish
to save; and that this money should not only be safe, but produce
interest according to its value in the market, and neither more nor
less. That arrangements made with this laudable object should be
accompanied with others which should have the tendency, however
remote, to disgust and repel the poor, was unfortunate, to say the
least. Any interference with, or superintendence over the family
affairs or the private conduct of members, was likely to be, it seems
to us, most irksome, and no less to the poor than to the rich. The
arrangement by which various rates of interest were given to different
classes of depositors, according to their good or indifferent
characters, was eminently arbitrary, if not unfair.
We have already alluded to the Edinburgh Savings Bank, instituted
after the parent bank at Ruthwell, and to some extent upon its model;
the offspring, however, in many points presented a happy contrast to
the Ruthwell Bank, in the simplicity and greater fairness with which
its affairs were managed. As it is now a matter beyond doubt that many
banks formed subsequently were started on the model of the Edinburgh
institution, a few words of description of its principal new features
may not be out of place. All depositors were paid the same rate of
interest; they deposited their savings without any preliminary
investigation of any sort; and whilst the management was not left,
even in part, to the classes it was designed to benefit, contributors
had nothing to do but pay in such sums as suited them, and withdraw at
pleasure, altogether as the classes above them would deal in the
ordinary bank. From the pamphlet published in the same year as that of
Dr. Duncan's, and to which we have already alluded, we are enabled to
give some account of the plan of working in the Edinburgh Bank; and it
is very interesting at this distant period to see how nearly identical
with the modern Savings Bank this early one was, or rather, we think
we ought to say, how closely the example of the Edinburgh Bank has
been followed. The bank, we find, was open every Monday morning
between nine and ten o'clock. No less sum than one shilling could be
received. The uniform interest paid was at the rate of four per
cent.[26] The money might be paid back at any time on a mere demand
and production by the depositor of his _deposit sheet_. Each depositor
was furnished, on making his deposit, with a duplicate of the _leaf of
the ledger_ in which his account was kept; on each succeeding visit he
brought the duplicate with him, and each separate transaction was
entered in the ledger and on the duplicate at the same time. This
arrangement, as might have been expected, soon gave place to the more
convenient bank-book at present in use. It will be observed that up to
this time, and some years subsequently, the Savings Banks had no
connexion with Government, and the funds realized were accordingly
deposited with some banking company, and, as a rule, the interest
received was at a higher rate than has since obtained. One feature in
the Edinburgh Bank, as in other Scotch banks of the period, is unknown
at present. When the deposits of any one person amounted to ten pounds
(the minimum sum received by an ordinary bank), he was presented with
an interest-note upon any banking firm he chose to name for the
amount. Henceforth he held an account with the bank in question,
receiving a higher rate of interest, and a strengthened security for
his money. The Savings Bank, however,--and this is noteworthy,--was
still open to him as a bank for his small accumulations as before, and
until they again amounted to the sum of ten pounds. The Edinburgh
Bank, thus restricted to such small sums and simple operations, was
able to get through its work with little trouble and a minimum of
expense. Perhaps here the endeavour to save expense proceeded to too
great an extent, and resulted in more gratuitous service than the
depositing classes at any time have cared to see. No honest man would
object to have the legitimate expenses of a careful management
deducted from the interest of his savings. In recommending the system
to others, the penurious style in which it was thought not improper to
do the business is manifest in the language adopted. "It can scarcely
be doubted," says the author of the pamphlet, "that in every parish
and district there will be found persons benevolent enough to perform
the office of attending to this work, viz. one hour per week,
gratuitously, by turns; and it will be easy to procure a room rent
free. Thus the only expense of management will be the purchase of
stationery; and for this purpose the saving already described (a small
difference between the interest paid and the interest given) will be
amply sufficient, without lowering the rate of interest allowed to the
contributors. It may be supposed, indeed, that some expense may be
incurred for transmitting to the great house (the banking company
chosen) the money deposited in the Savings Bank." "But we are
persuaded," adds this man of cheap expedients, "that in every case a
safe and free conveyance will be furnished by the principal
proprietors or inhabitants of the parish." The growth of Savings
Banks, and the progress of banking generally, soon left out of view
all such minor considerations as these. Such was the excellent
institution at Edinburgh, and it deserved all the success it obtained.
At first it was thought that its connexion with the Society for the
Suppression of Beggars retarded its progress; and it was not at all
wonderful that this was the case.
Perseverance, and the laborious exertions of its originators,
especially the efforts and high character of Mr. (afterwards Sir
William) Forbes, soon made up what the bank may have lost by this
connexion, and in five years from its formation was in every respect a
decided success. Without ostentation, and without trenching in any
respect on the independence of those who needed their assistance, the
originators of this bank went on, not only in Edinburgh, but in other
Scotch towns to which their influence extended, and with which the
metropolis has always some connexion, and their endeavours to cope
with the improvidence and carelessness of that period resulted, in a
few years, in a complete spread of the principle. What society owes to
the men who at this early date laboured with such zeal and devotion in
behalf of their fellows, little thought has ever been given; the names
of many of them have not even been preserved. It ought to have been
far otherwise. "It would be difficult, we fear," says Francis Jeffrey
in an early number of the _Edinburgh Review_, "to convince, either the
people or their rulers that the spread of Savings Banks is of far more
importance, and far more likely to increase the happiness, and even
the greatness of the nation, than the most brilliant success of its
arms, or the most stupendous improvements of its trade or its
agriculture. And yet we are persuaded that it is so."[27]
Before we close this notice of original Savings Banks, we would refer
to their establishment in Ireland. The first Savings Bank in the
sister country of which record is made was one established at
Stillorgan in 1815, and was called the "Parochial Bank." The Rev. John
Reade, the parish minister of that place, was not only the founder of
this bank, but also of the second venture of the kind; for, on
removing to Clondalkin, he would seem to have taken his benevolent
disposition with him, and to have repeated the process among the poor
of his new charge. A peculiar arrangement existed in these early Irish
banks, of which no trace is found elsewhere. The deposits of each
subscriber were kept separately, and open to the inspection of the
owner when he brought any fresh deposit, on which occasion he might
count his money if he chose. So soon as the deposits of any person had
reached 1_l._ the money was invested in Stock, and produced interest,
but not till then. Both banks eventually formed the nuclei for
ordinary Savings Banks after the act relating to Irish banks was
passed in 1817. The Belfast Savings Bank, opened in 1810, was the
first formed after the ordinary model, and has always been very
successful.
[11] Mr. Scratchley's _Practical Treatise on Savings Banks_, 1st
edit. p. 36.
[12] See the _Reports of the Society for Bettering the Condition
and Increasing the Comforts of the Poor_, vol. iii. which contains
a full account of this earliest Savings Bank.
[13] "To facilitate the saving of small sums of money and to
encourage young labourers to economise their earnings with a view
to provision for marriage, it would be extremely useful to have
county banks, where the smallest sums might be received, and a
fair interest granted for them. At present, the few labourers who
have a little money are often greatly at a loss to know what to do
with it; and under such circumstances we cannot be surprised that
it should sometimes be ill-employed and last but for a short
time."--Malthus. _Essay on Population_, 1803.
[14] _Hansard_, vol. viii. p. 887.
[15] The most important clauses of this Bill we have given in the
Appendix (A). Besides its intrinsic importance, it is very
interesting, as viewed in the light of subsequent measures. The
similarity of Mr. Whitbread's proposals to the measures which
nearly half a century afterwards have been carried out, cannot
fail to strike the reader.
[16] _An Explanation of the Principles and Proceedings of the
Provident Institution at Bath_. By John Haygarth, M.D., F.R.S.,
one of the Managers, London, 1816.
[17] _Observations on Banks for Savings_. By the Right Hon. George
Rose. London, 1816.
[18] _Memoir of Dr Duncan._ By his Son, the Rev. G. J. C. Duncan.
Edinburgh, 1848.
[19] _Quarterly Review._ October, 1816.
[20] _Memoir_, page 98.
[21] _Ibid_, page 105.
[22] Strange to say, Dr. Duncan's name does not find a place even
in Mr. Robert Chambers's elaborate Dictionary of celebrated
Scotchmen, an oversight much to be regretted.
[23] (1) _An Essay on the Nature and Advantages of Parish Banks,
together with a corrected Copy of the Rules and Regulations of the
Parent Institution at Ruthwell; and Directions for conducting the
details of business; Forms showing the methods of keeping the
Accounts, &c._ By the Rev. Henry Duncan, Minister of Ruthwell.
Edinburgh. 1815.
(2) _A short Account of the Edinburgh Savings Bank, containing
Directions for establishing similar Banks, &c._ Second Edition.
Edinburgh. 1815.
[24] Duncan's _Essay_ page 27.
[25] _Workmen's Earnings, Strikes and Savings_, page 37.
[26] One clause in the Rules states that "Interest is to be
calculated by months, as the calculation by days on such small
sums would be extremely troublesome, and without any adequate
advantage."
[27] _Edinburgh Review_, xlix. page 146.