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Savings Banks

Volume 117: debated on Tuesday 24 June 1851

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said, the best appeal he could make to hon. Members in reference to his Motion was, by reading a few figures that would show the circumstances of the parties interested in one of those institutions, the melancholy fate of which had rendered his present Motion necessary. In the Rochdale savings hank the depositors consisted of 1,245 women, of whom 722 were unmarried, 292 were married, and 231 were young persons or children; besides these there were 953 miners, 539 labourers, and 191 members of sick clubs. The total number of depositors was 2,928. He would only ask any hon. Member who might be impatient at his bringing forward this subject, to imagine the mass of misery which those figures represented. The right hon. Chancellor of the Exchequer would probably tell the House that these parties had no legal claim for redress. He (Mr. H. Herbert) unfor- tunately was compelled to admit that at once, because, if they had had a legal remedy, the House of Commons would not be the tribunal before whom their case could be argued. But there were many instances in which the House had afforded redress to parties who had no legal claims; he might mention the case of the holders of the forged Exchequer-bills. No less than 262,000l. was granted to those parties. But, then, among those holders there were powerful parties, who, if satisfaction had not been given to them for the losses they sustained, would have been able to excite public opinion, and would have had able advocates in that House; but on this occasion, he submitted that the case was one not only of justice, but, from the very poverty of the individuals, it was one which was entitled to even greater consideration than the one he had just mentioned. It would be urged, in all probability, that the case of these persons had been inquired into by a Committee, and that he was seeking to overthrow the decision of that Committee; but that was not the fact. In the first place, the Committee did not inquire into the Rochdale case. Besides, the Committee did not state that there were no claims on the part of the depositors in savings banks in general; all that they said was, that there was no case made out to distinguish the case of the savings banks of Tralee and Killarney from that of other savings banks. Now, the position he had to prove was, that there was a strong case in regard to the other banks. He was not arguing against the decision of the Committee, but he only wished to show that there existed strong claims to the sympathy and favourable decision of the House in regard to those other banks. The Committee reported that there were peculiar circumstances with regard to the Cuffe-street, Dublin, bank. He (Mr. H. Herbert) did not deny it; but he could not understand why, because there was a greater proportion of irregularity on the part of the public functionaries in the management of a savings bank, the principle of justice should be applied to the benefit of the depositors in in that bank, and not to the benefit of the depositors in other banks. He founded the claim of the depositors in all these banks on the ground that the Legislature had just meddled sufficiently with these institutions to induce a general and well-founded belief that the depositors had Government security, and at the same time had removed the actual security which for- merly existed, namely, the responsibility of the trustees. That belief was fostered and encouraged by the Government. And what seemed to him to give additional strength to the claim of these parties was the fact that the Government had been tampering with their money, it having been used for public purposes. The Government having done this, they had no right now to turn round and say to these individuals, "We are mere trustees and guardians of your money," when they had been using that very money for public purposes. The rules also which had been established, gave the people an additional reason for believing that they had the security of the Government; for no savings bank could be formed without the consent of the Commissioners for the Reduction of the National Debt. A barrister was appointed by whom the rules of the bank must be sanctioned; annual accounts were furnished to the Commissioners, copies of which were published in the local papers. These precautions were framed in such a way as to give the depositors every reason to believe that they had Government security for their money. He admitted that every one conversant with the law know that that was not so. But before this belief was created, they certainly had another security—that of the trustees. When a person saw the names of parties as trustees of whose solvency he was convinced, and of whose integrity he was satisfied, he was immediately willing to deposit his money in the bank of which those persons were trustees. This was a bonâ fide security enjoyed by the depositors up to 1844. But in that year a failure took place in the Hartford savings banks, on which occasion many noble Lords and Gentlemen had to pay considerable sums of money to make good the deficiency. What was the course adopted by the Legislature to remedy that evil? In order to protect for the future the trustees of these savings banks, a clause was introduced which totally took away from them all responsibility, and that without Substituting any other security whatsoever. It was not necessary that he should argue the policy of that exemption. When those banks were first established, it was believed that 1,000,000l. would be the largest sum ever invested, but that sum had risen to upwards of 28,000,000l.; therefore it might be justly argued that the amount of responsibility thrown on the trustees was greater than it was fair to ask them to sustain. He (Mr. H. Herbert) admitted that; but the very necessity which existed for exempting the trustees from that responsibility, if a proper regard had been paid to the interests of these unfortunate depositors, would have suggested an equally urgent necessity for establishing some machinery by which some other security might have been substituted. Still it was clear that the Legislature contemplated that some security should be given, for in the clause which exempted the trustees it was stated, "that it should be lawful for each of such trustees to limit his responsibility to such sum as should be specified in any such instrument," meaning the deed constituting the trusteeship. Yet in only one bank in the whole kingdom had that limited security been entered into. It was, therefore, clear that the Legislature contemplated that some responsibility should exist on the part of the trustees. Accordingly, in 1844, Mr. Tidd Pratt, who had boon appointed the public officer under the Act, wrote a circular to all those institutions both in England and Ireland. The consequence of this change in the law was, that these depositors, who believed that they had a Government security, found themselves suddenly deprived of all their money without any redress whatever the opinion of the public was, that the public officer did take on himself to exercise a control; and he thought it was the duty of Mr. Tidd Pratt, when he found the change of the law deprived these parties of the security they had, to call the attention of the public to that fact, and not to allow them to believe that they had a security which they really did not possess. He (Mr. Herbert) held in his hand an extract from a letter sent from the War Office in 1843, directing the paymasters of pensioners in different parts of the United Kingdom to advise the pensioners to lay by something for the contingencies of sickness and want of employment, and to invest their savings in the savings banks, where they would have Government security for their deposits. It was true the pensioners had been returned their money; but what he contended for was the general impression that had been created that these banks were based on the security of the Government. Again, the school books published under the auspices of the Government, and used in the public schools in Ireland, declared that "when the poor man placed a little money in the savings bank, he became a Government creditor." So that the Government had actually been educating a generation in Ireland in the same belief. He held in his hand a remarkably able pamphlet written upon the subject, in which it was shown that the Government, when exigencies existed, had made sales of stock by means of the money belonging to the savings banks at periods when there were no corresponding demands by drafts upon the savings banks. An actual loss had thus occurred to the public through this stock jobbing of the Government, amounting to nearly 2,000,000l. The accounts brought before Parliament clearly showed that these sales and transactions were constantly made, wholly irrespective of any demands by the depositors in the savings banks. Between the months of February, 1823, and July, 1824, the Commissioners sold out 3,350,000l. at low prices, and invested upwards of 6,000,000l. in Exchequer-bills. During the two years ending in November, 1834, the payments to the savings banks to the reduction of the national debt, amounted only to 1,750,000l., and the investments made by the hands of the Commissioners amounted to upwards of 3,000,000l. The solution of these incomprehensible transactions could only be found in the statement of the Chancellor of the Exchequer for the time being. The late Sir Robert Peel stated, on the 18th March, that the time had arrived when tampering with the savings banks, and with the five per cent upon customs duties, must be abandoned. Then he thought that the Government had no right to turn round, after making use of those funds in an emergency, and to say that they only hold them for the benefit of the depositors, and that if any accident occurred, those depositors had no claim. In the part of the United Kingdom with which he was connected, a general distrust had been created by the failure of the savings banks. In 1846 there were seventy-four savings banks in Ireland. Since then twenty-one had ceased to exist. In Connaught, for example, there were as many before as after 1846, namely, five; while in Munster, six out of fourteen; in Lein-ster, six out of twenty-six; and in Ulster, nine out of twenty-five, had been discontinued. Of these, six out of eight had been closed in the county of Down. It might be said that various causes led to that result; but he found that in the districts least visited by famine, and where the industrial habits of the people rendered these institutions more necessary, there had been the greatest diminution of these banks. He called upon the House to consider, when the depositors in savings banks found themselves deprived of their money, what a serious injury was inflicted, not only in a pecuniary sense, but in respect to all those feelings of prudence and economy which a good Government ought to encourage. In the Rochdale case, he thought it right to mention that the trustees subscribed the large sum of 17,000l. to meet the demands; but he had read an account in the newspapers of a meeting of the depositors to receive their portion of the money deposited—parties who had passed all their lives in honest and industrious habits, and who, finding most of the little money they had saved swept away, left the meeting room openly declaring that in future they would squander and drink away their money instead of saving it. In two other cases he had been witness of a fearful amount of utter and entire ruin. He had seen widows, whose husbands had spent their lives in the service of the country, becoming dependent on charity for bread; servants, who had spent their lives in honest toil, literally dying broken-hearted in consequence of the destitution in which they were plunged; and young men, whose parents had saved up sufficient money to enable them to start well in life, thrown, instead of that, into a career which, he was sorry to say, was not likely to end with credit to themselves. The House might obviate, in part at least, the deplorable effects which must ensue, and restore confidence to the parties interested for a sum less than would fit out one line-of-battle ship, not exceeding the third part of that which was voted the other night for the Kaffir war, the two-hundredth part of that at which they had purchased the freedom of the slaves, the fifth part of that which the noble Lord opposite annually spent on a crusade against the slave trade. This amount of misery might be mitigated by extending to the depositors in the banks mentioned in his Motion the same amount of relief which had been given to the depositors in the Cuffe-street savings bank.

Motion made, and Question proposed—

"That this House will, To-morrow, resolve itself into a Committee, to consider an Address to Her Majesty, praying- that She will, be graciously pleased to extend the same measure of relief to the depositors in the late Rochdale, Scarborough, Tralee, and Killarney Savings Banks as has been already extended to the depositors in the late Cuffe Street, Dublin, Savings Bank."

sec- onded the Motion. In a petition which he had that night presented on this subject from his constituents, it was stated that the amount of claims was about 100,000l. To meet this sum there was at the time of the failure in the hands of Government 26,000l.; in the hands of the local treasurer 1,788l.; and in actual property 16,000l., making altogether very nearly 44,000l., in addition to which some benevolent persons had made a subscription amounting to 17,000l., reducing the actual loss to 38,307l. The petitioners stated that they relied upon their moral right and claim for the intervention of Parliament to assist them, inasmuch as Parliament had relieved the trustees from responsibility, and left the petitioners without proper security, although the depositors believed that Government was responsible. It might be useful to review the legislation that had taken place on this subject. At first savings banks were voluntary associations, and in 1817 an Act of Parliament was passed to permit the investment of the funds in Government securities. In 1824 another Act was passed, which obliged the trustees to invest the deposits in Government securities. In 1828 an Act passed relieving the trustees from liability, except in cases of fraud. In 1844 all liability was removed from them. Thus the State had ultimately destroyed the liability of trustees; it had enforced the investment of the money in the funds, and had made itself responsible for the deposits of the military. The State having thus compelled the people to put their money into its purse, it was clearly responsible for any loss that might be incurred. The claims of the industrial classes were paramount to all others. If the State made bad laws, it was responsible for their consequences, and the people ought not to suffer from their operation. It might be said it was difficult for the State to make itself responsible, because the laws affecting savings banks were not uniform. Ought the poor to suffer on that account? He wished to see no divided security. If the State interfered at all, it ought to give full and complete security; otherwise to abstain from interfering entirely. The right hon. Chancellor of the Exchequer brought in a Pill last Session relative to the management of savings banks; but that Pill did not pass, and the right hon. Gentleman had not brought in any other Pill during the present Session. Why should the poor sufferers from those frauds, be re- fused their meed of justice? If the State interfered at all with these undertakings, the security of the State should be full and complete. Savings banks were a great benefit to the rich in reducing the demands of the poor upon the poor-rates; and if complete security were not provided to the depositors, was it to be believed that the poor would continue to lodge their money in these institutions? If the Government disavowed any responsibility, no honest man could recommend a poor man to invest his earnings in the savings banks, but would rather recommend him to withdraw his money, constituted as they were at present. He confessed there was no peculiarity in the case of Rochdale calling for interference. The trustees, though under no legal responsibility, had subscribed to a large extent; and had that case gone before a Committee like the others, it would have been proved that great irregularities had existed in the mode of keeping the accounts. Nothing could be more injurious than to allow the impression to prevail that the poor could not have justice done them; and such would be the result if this Motion was refused.

thought the Government ought not to refuse to make good these losses. The sufferers by the forgeries of Exchequer-bills, who were indemnified by the State, had not so strong a claim as the depositors in these savings banks, who, he thought, ought to be paid their losses in full.

trusted that the House would make some allowance for the not very agreeable position in which he was placed. On most occasions he was accused of wilful extravagance in throwing away the public money; he had now been attacked, both in that and the preceding Motion, on very different grounds. However painful to him to do so, it was his duty to oppose this Motion. Whatever distress had been occasioned by the failure of these savings banks, no ground had been shown why the Government should make good losses which had occurred through no fault of theirs. In the report on the Cuffe-street bank, peculiar circumstances had been shown to exist. It was proved that on two occasions the state of the bank had been brought to the knowledge of the Commissioners for the Reduction of the National Debt; and though no blame whatever was cast on the Commissioners, the Committee thought that if they had pursued a different course, the loss would have been proportionately less; and on those grounds they "recommended the case to the favourable consideration of the Government, with a view to the adoption of some measures which should at least mitigate the loss." In compliance with that recommendation, Parliament granted 30,000l., or 10s. in the pound on the amount of defalcation. The Committee had reported that there were no peculiar features in the Tralee and Killarney banks; and on the present occasion no distinction was attempted to be shown as to the four cases which the hon. Member had mentioned. If the Motion now before the House were agreed to, he did not see how it was possible to stop at those four banks, because there were other banks, the depositors in which had suffered from the fraud of the officers, or the negligence of the trustees. He might mention, for example, the losses sustained by the savings banks at Dartford and Poole, which must be fresh in the recollection of the House. What he was asked to do by this Motion was, that whore a loss had been incurred by the depositors in a savings bank, from whatever cause, whether the trustees were in fault or not, the Government were to step in and propose to make good that loss. He did not very well see how he could ever refuse to do so, if this Motion were agreed to, or what he should say to the hon. Member for Carmarthen (Mr. Morris), if he said, "Pay us who suffered by the failure of a savings bank many years ago what you pay to Rochdale or Scarborough." In that case the vote required would not be limited to 100,000l., at which the hon. Gentleman the Member for Kerry had put it. The hon. Member (Mr. H. Herbert) was content if the Government would pay 10s. in the pound; but the hon. Member for Carmarthen contended for the right of these parties to be paid in full, so that 200,000l. would be required to make up the losses sustained by these four banks. Then, the hon. Member for the city of Dublin (Mr. Reynolds) was not likely to be satisfied with 10s. in the pound, when these banks got 20s. and would no doubt put in his claim for 10s. additional. [Mr. REYNOLDS: Hear, hear!] Now, he could not recommend the House to make itself responsible for this sum. Allusion had been made to the way in which Government had dealt with the money of the savings banks; but for the purposes of the Motion, that was wholly irrelevant; as, whatever money had been received from the trustees of savings banks, the Government was liable for, was prepared to pay, had paid, and would pay. If it were proved that any loss had been incurred by the mode in which Government had dealt with the moneys of savings banks, that loss would fall upon the public, and not upon the depositors. It would not be difficult to show that the way in which the money was applied was advantageous to the public service; but that was a consideration utterly beside the present question, and which had been introduced somewhat ad captandum, for it was not proved that the depositors would lose a farthing by the mode in which the money had been applied. The chief difficulty in dealing with this great and important question, in which the interest of the poorer classes was so deeply involved, arose from that which often happened in this country—an institution, voluntary in its foundation, utterly outgrew all the bounds anticipated at its commencement; the Government was more or less called upon to interfere; and the great difficulty was to reconcile Government control and responsibility with that voluntary action which was an essential sine quâ non to the existence of savings banks; for without the voluntary, unpaid assistance of benevolent individuals in managing these institutions, they could not possibly exist. The liability of trustees had been gradually diminished, and, lastly, by the Act of 1844, almost taken away, except in certain cases. The present liability was not a compulsory responsibility, for neither the Government, nor Mr. Tidd Pratt, nor anybody else, could compel the trustees to assume it. Generally speaking, trustees had abstained from doing so, especially since 1844; and he did not remember a single case where the legal liability of the trustees had been appealed to to make good the losses. In every case voluntary contributions had been relied on. On the failure of the Carmarthen bank, in 1824—one of the worst cases, and the only really large loss which had taken place—the Lord Lieutenant came forward and paid all the depositors under 5l., and the rest were unpaid; so that the legal liability was practically good for nothing, even when it existed in its fullest extent, and no great difference had been made by its removal. The question at the time was, whether it was better to take away a liability which practically had never been enforced, or to withdraw from the management of these institutions those gentlemen on whose exertions their existence depended; and the Legislature had decided that it was more desirable that the local management thould continue, than that the legal liability should remain in terrorem over the trustees. Thus a body of managers had been retained, who would, probably, not have been retained otherwise, and without whose assistance the institutions could not be carried on. He had never heard it denied that the accounts of the Rochdale bank had been regularly transmitted; but the actuary, a man implicitly trusted by all classes in Rochdale, had kept two sets of books, one true, the other forged—copies of the latter being sent to the National Debt Commissioners, by an inspection of which it was utterly impossible to discover any fraud. He was not quite sure that the trustees of that bank had done their duty, or they might have detected the fraud: but the actuary was highly respected, and thus had the power of defrauding the depositors to the extent named. In the Scarborough case, the trustees had apparently done their duty perfectly, and not the slightest ground appeared, from the accounts submitted to Government, for suspecting any irregularity. The trustees had themselves attended for the last twenty years, and had not the slightest suspicion that anything was wrong with the bank. At Poole, in the same way, the trustees had no idea until the death of the actuary that there had been any fraud upon the bank; therefore there was no pretence for saying that Government were in any way liable to make good the deficiencies in these cases. He (the Chancellor of the Exchequer) regretted very much that so severe a loss should have fallen on a class of persons so badly prepared to sustain it. Last year he entertained a hope that he would have been able to carry a Bill through Parliament affording better security than at present to depositors he had not abandoned that hope: and he might say that it was his intention, in any Bill he might bring in, to appoint a responsible treasurer to each bank—responsible to him (the Chancellor of the Exchequer), which would consequently give him a direct and positive control over him, and of course make him responsible for all monies received by such treasurer. He had received, and every day was receiving, information that would enable him to bring forward in the next Session of Parliament a better Bill than that he had brought forward in the past Session. When in that position no one could feel more anxious than himself to see security afforded to the industrial classes; but at present he did not think it would be fair or just that the Government should take on themselves the payment of all the losses, known and unknown, which might, up to the present occasion, have occurred by the neglect or otherwise of the managers or the trustees of certain savings banks.

said, that the right hon. Gentleman the Chancellor of the Exchequer, in speaking of the Cuffe-street savings bank and of the vote of 30,000l. for it, had designated that vote as a vote of charity. Against that phrase he (Mr. Reynolds) must protest. When the vote was passed, the right hon. Gentleman had used the same phrase, and he (Mr. Reynolds) had then emphatically declared, on the part of the depositors, that they would decline to receive the money on the ground of charity. If the right hon. Gentleman should accede to the present Motion, he (Mr. Reynolds) should very likely put in his claim for the balance of the other 10s. in the pound, and he believed that if he did the House would agree to it. When the 30,000l. was voted, the right hon. Gentleman the Member for Ripon (Sir J. Graham) said he would be no party to a charitable vote, for either the country owed the whole amount, or nothing; and though there was a considerable difference between the Cuffe-street and the other savings banks named in the notice of Motion, yet the right hon. Chancellor of the Exchequer had admitted that if the bank had stopped payment in 1844, when the insolvency of it was known, the creditors would have received 17s. in the pound, instead of 10s., which the right hon. Gentleman admitted was wrung from him, not from any feeling of justice or legal liability, but because of charity. Now, charity knew no bounds; charity never thought of 10s. or 15s. in the pound where it had the power to discharge the whole debt; and on that benevolent principle he appealed to the right hon. Gentleman, and asked for a check on the public purse for the additional 30,000l. to pay his unfortunate constituents, amounting in number to about 2,000, whose property had been destroyed by the failure of the Cuffe-street bank. In his opinion not one point of the argument of the hon. Member for Kerry had been answered. The hon. Member had con- tended that the Legislature had given a sanction to these banks; and the civil and military authorities had proclaimed that every man who lodged money in them had a Government security; yet that, in fact, when the banks failed, the depositors found they had neither personal nor Government security. And now as to the magnitude of this question. There were 700 savings banks in the United Kingdom, and the aggregate amount lodged in those banks exceeded 1,000,000l. sterling; and what was the state of the law? This, that if the managers and trustees made away with the money in transitu between the depositors and the Commissioners for the Reduction of the National Debt, the depositors had no security or remedy for one shilling. The Government seemed, indeed, to rely upon one officer who was said to have great powers; but when those powers came to be analysed they appeared to be none at all. During the three or four months that he sat upon the Committee he asked that officer, Mr. Tidd Pratt, 1,000 questions; and, without attaching any personal blame to that gentleman, he received from him 900 unsatisfactory answers. If he were a director of a joint-stock bank, and if it were his duty to appoint the inspectors, and any one of the inspectors were to give such an account as Mr. Tidd Pratt gave, he should certainly vote without delay for his dismissal. The right hon. Gentleman the Chancellor of the Exchequer had spoken of amending the law, and said that he had met with considerable opposition in his efforts to do so; but he (Mr. Reynolds) was not aware of any opposition to the Bill brought in by the right hon. Gentleman last Session. It seemed to him that the right hon. Gentleman had only got leave to bring in the Bill, and then backed out of it. If a merchant lodged money in a joint-stock bank, he had the property of every shareholder in the bank, to the last penny, as security. If a gentleman deposited money in the public funds, he had the whole income of the nation as security. But if a tradesman or industrious labourer lodged money in savings banks, he lodged it on the false pretences held out to him, and got no security whatever. Therefore, he thought it better savings banks should be altogether abolished, than continued as constituted at present. Although he intended to vote for the Motion, he regretted that it was limited to 10s. in the pound, for if the parties were entitled to 10s. they were entitled to 20s., and with interest also. He had heard it said if that wore granted, 200,000l. would be required; but surely the representatives of a great and powerful and wealthy country, such as England, ought not to shrink from a liability to that or any other amount, if due. He trusted that it was only a matter of time, and that the whole loss would be made good.

said, if the hon. Member for Kerry (Mr. H. Herbert) divided the House, it would be certain to appear that there existed a great difference of opinion on the subject. Yet he was inclined to believe it was not a difference of opinion with regard to the facts of the case, but with regard to time. He thought it was advantageous to the object in view to have brought forward the question at present. But yet great weight was duo to the arguments of the right hon. Chancellor of the Exchequer, particularly when he showed the obstacles that existed to the payment of the money. He (Mr. Bright) had accompanied several deputations of the depositors of the Rochdale bank to the right hon. Chancellor of the Exchequer; and he thought the right hon. Gentleman would admit that they always argued their case with great moderation, and with great allowance for the difficulties that surrounded the position of a Chancellor of the Exchequer in considering the question. [The CHANCELLOR of the EXCHEQUER: Hear, hear!] Nothing could be so fatal as that the right hon. Gentleman should at once have handed out the sum of money shown to have been lost by those defalcations, because such a coure would only afford a premium in future delinquencies. Still, in the present case, it would be impossible to shut their eyes to the fact that it was one of great hardship, and formed a sort of justification—he admitted somewhat vague—for the present claim. If the Government had never legislated on the, subject of savings banks, there would be an end of the question, and Parliament would not now he called upon to make good any deficiency. But at present nine out of every ten depositors believed they had the security of Government for whatever money they invested, and that in placing their money in the local savings banks they were securing it better than if they lodged it in the hands of the very wealthiest private banks in the country. His (Mr. Bright's) view was this. He thought the principle of the right hon. Chancellor of the Exchequer, the principle of not paying any thing at present, a sound and a wise one, not knowing how much was to be paid, or where the demands would end. But he thought the right hon. Gentleman might bring in a Bill to meet the question, and fix the responsibility somewhere. Let the hon. Member for Kerry bring the whole matter before Parliament, and trust to the generosity of the representatives of the people. He (Mr. Bright) believed there would be found a large majority in favour of paying the claims of these depositors, Parliament having previously secured itself against the occurrence of future losses. Therefore, he hoped no decision would be come to to-night, but let a Bill be brought in by the right hon. Chancellor of the Exchequer to put the matter on a sound footing he begged to suggest to the right hon. Gentleman that he should select one or two competent persons to visit and examine into the management of some of the best-conducted banks in the country; and then, having acquired all the necessary knowledge and information, to prepare a Bill to be submitted to Parliament, which, in his (Mr. Bright's) opinion, should have the effect of solving the difficult question. He was delighted with the firmness and magnanimity with which the depositors had borne up against the trials that had befallen them. Their conduct in treating with the trustees, and in their applications to the Government, only gave them a greater claim to all the kind consideration which it was possible for that House and for the Government to bestow upon them.

knew nothing of the particulars of the Scarborough and Rochdale Savings Banks; but having been a Member of the Committee to inquire into the defalcations of the Irish banks, he left that Committee with the full conviction that, although there was no legal liability on the part of Government to pay the amount, the Government was morally bound to do so, for the unfortunate depositors left their money in the Irish banks under the impression that the Government was liable for the full amount. In Prance the Government undertook the responsibility of naming the officers of the savings banks, and were liable for every shilling; but in England there was a divided responsibility, partly on the depositor and partly on the Government, and the poor depositors knew not where their responsibility began, and where it ended. The fact was, that the Government was not legally responsible for any money until it had reached the Treasury; but how was the depositor to know when that took place? That was the difficulty which he had attempted to remedy in 1842 and 1843; and if the course he suggested had been adopted, all the present evils would have been avoided. The Government ought to have either the whole responsibility or no responsibility, that the public might know where was their security, and how they were to act. In his opinion the Government were now morally liable, and justice ought not to be refused.

thought it clear that every succeeding Speaker involved the House in greater difficulties. He quite agreed with the hon. Member for the city of Dublin (Mr. Reynolds), that these were debts, or they were nothing. The hon. Member very properly, in words, repudiated all compromise; but the House would recollect, notwithstanding, that the hon. Member took 10s. in the pound. The hon. Member for Manchester (Mr. Bright), and the hon. Member for Montrose (Mr. Hume), expressly said these matters were to be dealt with by the generosity of the House, because legislation had made the Government responsible for the money which reached its hands. He (Mr. Henley) would not admit that legislation had had anything to do with these unfortunate losses. If the money of the depositors had been left in private hands, the losses would probably have been greater, and have imposed a check on the excellent habit of the people putting by their small savings. The hon. Member for Montrose had drawn a distinction between the Irish and the English cases, because there had been a Committee on the former; but that Committee drew a distinction between one Irish case and others, on the ground that the others rested on the same footing as the English savings banks, and therefore he (Mr. Henley) was at a loss to know how any distinction could be drawn between the Killarney and Tralee, and the Rochdale and Scarborough banks. In dealing now with the public money, the Government must act on the principle either that the money was due or not. If it was due, it ought to be paid to the utmost farthing; if it was not duo, it ought not to be paid at all. Losses of this description had been met from private sources, and that was really the best way of meeting them. With regard to future legislation, whilst these banks remained in private hands, it was difficult to bring them under Government control. The great difficulty of the case was in compelling the deposi- tors to bring in their books within a certain period. It was impossible to get the depositors to do that, yet until it was done there could be no guarantee against frauds. It was said the hardship of compelling the depositors to bring in their books at a certain time was so great that it would defeat the object of those institutions. But, however that was, he thought the House should hesitate before they assented to the present Motion.

considered this to be one of the most painful cases upon which he had ever been required to vote. The parties suffering had no legal claim on the Government; but a strong moral obligation rested on the Government, for, he asked, was there not in the minds of the depositors a complete conviction that the Government was responsible for the amount of money deposited? It was said they were only responsible for the amount which reached their hands. But was any man in humble life able to distinguish the difference? It was said, too, that it was the duty of the Government to have applied a remedy before the evil had become so great; but was it possible for persons in humble life to deposit their money in any other way than in sayings banks? They could not purchase lands or take mortgages, because of the complexity of title; and they were prevented putting money in trade, because of the complexity of our law of partnership. Under the circumstances he thought it would be better if the hon. Gentleman (Mr. H. Herbert) withdrew his Motion, in order to give time to the right hon. Gentleman the Chancellor of the Exchequer to bring in his Bill, which would make more safe these receptacles for the savings of the humble classes; and then he might renew his Motion, with a view to its having that acceptance which he (Mr. Slaney) believed it would meet with at their hands.

thought the true way of arguing this question, was to press what amounted to a legal claim upon the part of the depositors. It might not be written on the law of parchment; but it was on the law of justice and of custom. What would be thought of a banker who pleaded that the money which had been paid over his counter had been embezzled before it reached his strong box? The cases were analogous. This money had been paid over the Government counter, and they were, in justice, responsible for it. Virtually, and by the undisputed law of usage, the counter was the Government's, and the receivers were the agents of the Government. The question was not settled by saying the Government had never written up, "This counter is ours." Neither did a private hanker ever do so; hut this did not affect men's judgment on the case. If the question was raised of who was to pay, it was not the laches of the Government, nor of the House; it was the laches of the nation, which had not sent to Parliament men who would see the Government took proper precautions to prevent embezzlement, and therefore the nation must not complain when it had to pay, as he was sure, in the end, it would have to do.

regretted that the hon. and gallant Member who had last addressed them should have stated anything so much at variance with the truth of the case, and so calculated to hold out a false prospect to the depositors, as that there was in this case anything like a legal claim upon the Government; for the Government had never stated in any way that they were responsible for these amounts. He agreed with every word that had been stated as to the unsatisfactory state of the present law with regard to savings hanks, and he entirely approved of the various endeavours made by his right hon. Friend the Chancellor of the Exchequer to amend it. The year before last, and last year again, his right hon. Friend had brought in measures upon the subject, and he knew the great disappointment which he had experienced when he found that the state of public business last year prevented his carrying that measure. The case was surrounded with difficulties; but still he thought, after the disposition which the House had evinced, that it might be possible to remove some of the great anomalies which at present we had to deplore. With respect to the Motion before the House, he regretted that the hon. Member (Mr. H. Herbert) had mixed up the English with the Irish banks, because by that course he had destroyed the sympathy which he (Mr. J. A. Smith) felt for the Irish banks, and would prevent his voting for the Motion. Undoubtedly the change made in the law in 1844, had, in some cases, worked most unjustly. In the case of the Killarney savings bank, for instance, there was a considerable balance; but Mr. Tidd Pratt, who was sent to examine the state of the accounts, decided that the trustees were liable for all amounts depo- sited before 1844, and also that the trustees might use all the money in the possession of the bank at the time of the stoppage to discharge the claims against them. The consequence was that the deposits of those persons who had placed money in the bank subsequently to 1844, were employed by the trustees to pay off the claims to persons who had deposited previously to 1844. He was bound, in the discharge of his duty as Chairman of that Committee, which sat for two Sessions, to say, that though he entirely concurred in the opinion of those who wished for an early alteration of the law, he did not believe the impression as to the liability of the Government had been so general as to justify the right hon. Chancellor of the Exchequer in taking a course so dangerous and so completely at variance with his duty as to hold out any expectation that these losses would be repaid from the public funds.

would support the Motion. He considered that the Government were bound to inquire whether there had been any default in the management of the hanks to which it referred. He believed that in some cases a printed notice had been exhibited in the banks, stating that the Government were responsible for deposits, and such a notice had led persons to believe that the Government really were responsible.

Question put.

The House divided:—Ayes 56; Noes 63: Majority 7.

List of the AYES.

Archdall, Capt. M.Guernsey, Lord
Baird, J.Gwyn, H.
Barrington, Visct.Halsey, T. P.
Beresford, W.Hamilton, Lord C.
Blair, S.Henry, A.
Blake, M. J.Hindley, C.
Boldero, H. G.Hodgson, W. N.
Booth, Sir H. G.Hume, J.
Boyd, J.Johnstone, Sir J.
Brisco, M.Keating, R.
Bunbury, W. M.Keogh, W.
Clifford, H. M.Knox, hon. W. S.
Davies, D. A. S.M'Cullagh, W. T.
Dod, J. W.Meagher, T.
Dunne, Col.Monsell, W.
Edwards, H.Morris, D.
Farnham, E. B.Naas, Lord
Forbes, W.Neeld, J.
Fox, W. J.Norreys, Sir D. J.
Fuller, A. E.O'Brien, S. L.
Gallwey, Sir W. P.O'Connell, J.
Goold, W.O'Flaherty, A.
Grace, O. D. J.Power, Dr.
Grattan, H.Reynolds, J.
Greene, J.Seaham, Visct.

Slaney, R. A.Vesey, hon. T.
Stafford, A.
Thompson, Col.

TELLERS.

Urquhart, D.Herbert, H. A.
Verner, Sir W.Crawford, W. S.

List of the NOES.

Armstrong, Sir A.Martin, C. W.
Baines, rt. hon. M. T.Matheson, Col.
Baring, rt. hon. Sir F. T.Mostyn, hon. E. M. L.
Bellew, R. M.Mulgrave, Earl of
Bouverie, hon. E. P.Mullings, J. R.
Boyle, hon. Col.Paget, Lord A.
Bramston, T. W.Paget, Lord C.
Brotherton, J.Palmerston, Visct.
Buller, Sir J. Y.Parker, J.
Christy, S.Phillips, Sir G. R.
Clay, J.Pilkington, J.
Cockburn, Sir A. J. E.Pusey, P.
Craig, Sir W. G.Rice, E. R.
Dalrymple, J.Rich, H.
Duncuft, J.Romilly, Sir J.
Dundas, Adm.Seymour, Lord
Elliot, hon. J. E.Shafto, R. D.
Farrer, J.Shelburne, Earl of
Frewen, C. H.Smith, J. A.
Grenfell, C. P.Somerville, rt. hn. Sir W.
Grey, rt. hon. Sir G.Spearman, H. J.
Grey, R. W.Spooner, R.
Hanmer, Sir J.Stansfield, W. R. C.
Harris, R.Stanton, W. H.
Hawes, B.Tancred, H. W.
Henley, J. W.Willcox, B. M.
Hodges, T. L.Williamson, Sir H.
Hollond, R.Wilson, J.
Hutt, W.Wood, rt. hon. Sir C.
Kershaw, J.Wood, Sir W. P.
Lewis, G. C.

TELLERS.

M'Taggart, Sir J.Hayter, W. G.
Martin, J.Hill, Lord M.