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.

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.