SAVINGS-BANKS 



177 



those of friendly societies, were made subject 

 to confirmation by justices at quarter sessions, 

 and in the following year the system was introduced 

 into Scotland. In 1828 it was, however, enacted 

 that the rules should l>e submitted to a barrister 

 appointed by the National Debt Commissioners, 

 who was to certify that they were in conformity 

 with law; and in 1844 it was provided that one 

 of the two copies of rules thus certified was to be 

 returned to the institution, and the other trans- 

 mitted to the commissioners, while the barrister 

 was also empowered to settle all disputes lietween 

 the trustees and the depositors. In 1863 the law 

 was consolidated by an act which repealed all 

 previous acts, and enacted that the rules of all 

 banks should contain regulations providing for (1) 

 the attendance of at least two trustees, managers, 

 r specially appointed paid officers on all occasions 

 <>f public business ; (2) the comparison of the pass- 

 hooks of the depositors with the ledger on every 

 repay ment, and also on their first production at the 

 hank after each 20th November; (3) the audit 

 half-yearly of the hooks of the bank by a public 

 accountant, or one or more auditors appointed by 

 the trustees and managers, but 'not out of their own 

 body ;' (4) a book containing an extracted list of 

 the depositors' balances made np every year to the 

 20th November, to be kept open at any time during 

 the hours of public business for the inspection of 

 the depositors; (5) meetings of the trustees and 

 managers half-yearly at least, and the keeping of 

 minutes of their proceedings in a separate book. 

 The trustees and managers were required to trans- 

 mit weekly returns, showing the amount of the 

 week's transactions, to the National Debt Commis- 

 sioners. Lastly, the interest payable to depositors 

 which, together with that payable to the banks, 

 was, until 1828, 3d. per diem, or nearly 5 per cent. 

 was reduced to 3, Os. lOd. per annum, that pay- 

 able to the banks having been previously reduced 

 to 3, 5s. per annum by the Act of 1844. 



Post-office Sai-inns-bunks were established in 1861 

 by an act designed to grant additional facilities for 

 depositing small savings at interest, with ' the 

 direct security of the state' for the repayment of 

 the deposit*. It empowers the Postmaster-general, 

 with the consent of the Treasury, to authorise 

 'guch of his officers as he shall think lit to receive 

 deposits for remittance to the principal office and 

 to repay the same,' under such regulations as, with 

 the consent of the Treasury, he may prescrilx>, 

 paying the moneys so received to the National Debt 

 Commissioners. It provides for the transfer of 

 deposits to and from ordinary savings-banks, and 

 fixes the rate of interest on deposits at 2, 10s. |>er 

 annum. The Act of 1861 was amended in 1863 by 

 one which provided for the transfer of the accounts 

 of minors, and also for the closing, under certain 

 conditions, of trustee banks, and the transfer of 

 their funds to the post-office banks. 



Since 1863 several acts relating to savings-banks 

 have been (unwed, three of which apply to trustee 

 banks only, the others to both classes of banks. 

 In 1876 the Savings-liank Barrister Act transferred 

 the powers of settling disputes and certifying rules 

 vested in the larrister appointed by the National 

 Debt Commissioners to the Friendly Societies 

 Central Office. The Savings-bank Act of 1880 

 reduced the interest payable to the trustees of 

 Havings-hanks to 3 per cent., and that payable to 

 depositors to 2, I'm. or to within 5s. of that pay- 

 able to depositors in post-office banks viz. 2, 10s. 

 per cent. Ite most noteworthy provisions, however, 

 were those authorising the investment of deposits 

 in post-office and trustee banks in government 

 stock, to the amount of 100 in any one year, and 

 to a total amount of 300. Regulations issued 

 under this act in 1881 were amended by those of 



1888, which fixed the minimum amount of stock 

 purchasable at one shilling. The act thus doubled 

 the original limits of investment, which now 

 amount to 130 in one year instead of 30, pro- 

 vided the 100 be for investment in stock, and to a 

 total of 300 plus 200 deposit. The Savings-bank 

 Act of 1887, while extending the powers of the 

 Postmaster-general to make regulations, conferred 

 a similar power on the Treasury as respects trustee 

 savings banks, and three important sets of regula- 

 tions have lieen issued under it. In the same 

 year the failure of the Cardiff Savings-bank, 

 through a deficiency of 37,000 in the funds due 

 to the frauds of the actuary, led to the passing 

 of the Trustee Savings-bank Act, 1887. Similar 

 failures, chiefly caused by the negligence of trustees 

 in controlling the work of the paid officers of banks, 

 have been of frequent occurrence, one of the earliest 

 being that of the Mildenhall Bank (Suffolk) in 

 1823. Between 1842 and 1837 there were twenty- 

 three in England and four in Ireland, the loss to 

 the depositors in some cases being very heavy, 

 while in others it was made good by the trustees, 

 and since 1857 there have been fourteen coses of 

 defalcations by paid officials, eleven of which 

 resulted in the closing of the bank. Prior to 1828 

 the trustees and managers appear to have been 

 personally liable for any deficiency unless they 

 protected themselves by their rules. The Act of 

 1863 has now provided that no trustee or manager 

 of any bank in the United Kingdom shall be 

 personally liable except ( 1 ) for moneys actually 

 received by him on account of or for the use of the 

 bank, and not disposed of as directed by the rules ; 

 (2) for neglect or omission in complying with the 

 regulations prescrilied by the act as to the mainten- 

 ance of checks, the audit and examination of 

 accounts, the holding of meetings and keeping 

 minutes of proceedings ; (3) for neglect or omission 

 in taking security from officers as required by the 

 act. The 50 ami 51 Viet. chap. 47 empowers the 

 Treasury, if satisfied, on the representation either 

 of the depositors or of the National Debt Commis- 

 sioners, to a|ipnint a commissioner to hold a local 

 inquiry with regard to any trustee bank and to 

 report thereon ; while it also provides for the wind- 

 ing-tip of trustee banks as ' unregistered associa- 

 tions under the Companies Acts. The Savings-bank 

 Act, 1891, takes a further step in the same direction 

 by providing for the appointment of an Inspection 

 Committee of Trustee Savings-banks, charged with 

 the duty of ascertaining, by means of inspectors, 

 whether the banks are duly complying with the law, 

 and are keeping their expenditure within due limits. 

 If the committee, on the report of any inspector, are 

 of opinion that a bank has made default in either 

 of these respects, they are to report the matter to 

 the National Debt Commissioners, who may, in 

 their discretion, either close the account of the 

 trustees, or report to the Treasury, with a view of 

 an inspection being made of its affairs under the 

 Act of 1887. 



Progress of the System. The first trustee savings, 

 bank in the United Kingdom was established in 

 1799. By the end of 1817, when legislation on the 

 subject first began, upwards of 135 were in exist- 

 ence, of which 122 were in England, 4 in Wales, 5 in 

 Ireland, and 4 in Scotland. The establishment of 

 the post-office system in 1861 almost immediately 

 caused a decrease in the business of the older insti- 

 tutions, and by the end of 1869, 145 of the 638 trustee 

 banks open in 1860 had been closed, and capital 

 amounting to 1,816,335 transferred to the post- 

 office banks, the number of which has risen from 2535 

 in 1862 to 9681 in 1890. The average of the deposits 

 in each seems to show that the latter class of banks 

 benefit a lower social stratum than t In' former. 



In 1829, after the passing of the Act of 1828, the 



