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Edinburgh Savings Bank, The Report of the Committee of the Highland Society, but especially Mr. Duncan's Essay, 2d edition. This last gives an account of the principles on which Saving Banks are founded, and contains the forms and details both of his own and other plans. The third part contains many excellent remarks on Friendly Societies, and on the propriety of uniting them with Saving Banks, so that one set of persons might manage both at the same meeting, though the funds of both should be kept separate. We really wish that Mr. Duncan would omit the title of this division of his Essay in future, and throw his remarks on Friendly Societies (in the promotion and improvement of which he has greatly exerted himself) into a separate section. At present we shall only oh. serve, as an obvious objection to bis proposal, that, as by his plan, the Managers of the Friendly Bank, and of the Friendly Society, are each to be appointed by, and responsible to, all the members and depositors, such a plan would exclude every one from the management of either society who should not be connected with botb. Besides, simplicity, which may be called the first, second, and third requisite of this institution, is likely to be destroyed by the proposed union. We give Mr. Duncan great credit for pleading so ably the cause of Friendly Societies in opposition to those who wish to see them superseded by this new plan. He shows the two to be perfectly consistent, and calculated to promote the same iinportant results. From his concluding remarks we shall make two short quotations.
• Every thing, however, must depend on the activity, the zeal, and the intelligence of those under whose management the system is conducted; and I cannot conclude without earnestly recommending it tv the continued and increasing patronage of the public. Much may be done, with this view, in various ways, by persons in all the different stations of life. The rich may support it by benefactions, the poor by their example; the prudent may promote its prosperity by their advice, men of rank by their influence, the active and skilful by their judicious exertions. But, perhaps, it is in the power of no description of persons more essentially to advance the interests of the lostitution, ihan heads of families, and men engaged in trades and manufactures which require them to employ a number of dependents. Were it possible to persuade such persons of the immense importance of the object in view, we might from this circumstance alone indulge the most flattering bopes.'
The other is from that part of the pamphlet which answers an objection that has sometimes been made to the moral tendency of Provident Institutions.
• It has been alleged, that, in guarding against the idleness and proDigacy of the lower orders, we are attempting to erect a system calcufated 10 excite and to cherish the opposite vice of selfish niggardliness
Were this objection made to an institution, the tendency of which was to increase the parsimony of those who are already blessed with independent fortunes, or even with a competency, no person could be more ready than myself to admit its force ; but it must not be forgotten that the Parish Bank is intended for the benefit of the lower orders, in whom industry and frugality are not only themselves moral virtues of the first class, but also the foundation of many kindred virtues. There is something noble and affecting in the struggle which a poor man makes to preserve his independence, and to rise superior to the difficulties and discouragements incidental to his situation. The end he has in view, and the privations be must undergo before he can attain that end, are such as must attract the applause and sympathy of every good man. When, from the scanty pittance wbicb be bas earned by his honest industry, and which, though it suffices to supply the common wants of nature, is inadequate to procure the conveniences or comforts of life, wheb, from that scanty pittance, he is able, by the exercise of a virtuous self-denial, to lay up a provision for the exigencies of his family, he exhibits a pattern of prudence and manly resolution, which would do honour to the highest station. The sentiments which give rise to this conduct are nearly allied to the best feelings of the human beart, and the man who can, with such a becoming fortitude, deprive himself of present indulgence for the sake of future independence, will not readily stoop to the suppleness of duplicity, or the baseness of fraud.
To complete the plan which we proposed, we must make some observations on Mr. Rose's Bill, which was introduced on the 15th of May, but, after passing the House of Commons in an amended form, was, in the House of Lords, postponed for thesession. This delay we consider as a circumstance by no means to be regretted. The discussion which it has undergone will render it much more perfect when it shall be passed into a law, and the marked attention which it has already received will in the mean time tend to extend the benefits of the plan to various parts of the kingdom. The few suggestions and amendments which we shall venture to offer are chiefly on the Bill as it was submitted to the House, as we have not yet received the copy sanctioned by the House of Commons, though we shall allude to some of the alterations which have come to our knowledge through the medium of the parliamentary reports.
Mr. Rose's Bill gives permission to any number of individuals to form Banks for the savings of industry, on the principle of mutual benetit, and in this, as well as in its other leading enactments, agrees with Mr. Duncan's plan. The original rules, and every alteration that may be made in them, are to be exhibited to the justices of the peace, at their quarter sessions, and a duplicate, written on parchment, is to be filed by the clerk with the rolls of the sessions, without any fee. This duplicate is to be referred to in case of need, and is to be binding on all parties till such rules shall be legally altered. The 14th clause, requiring all such sums of money deposited, as may not be called for by the immediate exigencies of the Institution, to be invested in the government funds of the United Kingdom, has met with great and, as we apprehend, well. founded opposition. By several Scottish members it was combated as equally impracticable and impolitic, and it was chiefly, we believe, in consequence of this clause, that the bill was prevented from extending to Scotland. The advantages
to be gained by this mode of investing the money deposited with Friendly or Saving Banks, are set forth in the Report of the Bath Provident Institution. These are chiefly two: the first is, that the Funds afford the best possible security.--This is undeniable ; but then it is an advantage which may be too dearly purchased. The 3 per cents., which were some time ago considerably below par, have lately proportionably exceeded it, and by purchasing at 65 or 70 there is a probability of an eventual loss upon the capital. If the value of the stock purchased with the money of the depositors is to remain always exactly equal to the purchase, whatever may be the rise or fall in the market, the depositors who may withdraw their money will indeed have reason to be satisfied, should the price of stocks have fallen below their purchase: but should the price have risen above it, when they withdraw, they will be apt to consider themselves as not only deprived of their legitimate profit, but, if they have purchased above par, even robbed of part of their property. We do not observe any regulation as to the point in Mr. Rose's Bill; nor is it a proper subject for legislation. But to prevent as much as possible ihe feelings of irritation likely to arise in the minds of the lower classes from the fluctuation of the public funds, and the gambling propensity which such a fluctuation sometimes excites, we are inclined to advise, that all the deposits of individuals which may be vested in the stocks, should be entered at par in the Friendly Bank's books. In this way there will be no eventual loss to the concern: and any present defalcation may be made good from the subscriptions of the benevolent, and surplus interest.
The other advantage predicted as likely to attend the investment of the money of the Friendly Banks in the Funds, is, that it will create a new bond of union between the government and the people, and render the latter doubly interested in the good order and stability of the state. Hence submission to their share of those public burdens, which are the means of ensuring to them the regular fruits of their savings, may reasonably be anticipated. And in manufacturing districts, where a crowded population and high wages afford the best encouragement for Provident Banks, such a feeling of personal interest would be highly favourable to the public peace. All this may be true, and in our Twenty-third Number we stated this as one of the collateral benefits of the plan: but let self-interest, counselled by wisdom and experience, avail itself of this security in its own way and tiine. Compulsion, we appre-. hend, will injure the cause, and lead to suspicions that may be fatal to its success. The investment of money belonging to Friendly Banks should be left to the discretion of their members, or to that of the trustees whom they may appoint, and from whom they may require security for its proper application. The intercourse with the Funds, in Scotland especially, is difficult and little understood. But several of the public banks, particularly the Bank of Scotland, which was established in 1697 by Act of Parliament, and which, though in truth a private establishment, is considered as the national bank of that partof the kingdom, have acquired such strength and stability as to be very popular places of deposit, and it would be neither politic nor just to forbid individuals to avail themselves of the benefits which they offer. We must not force men to be patriotic by legislative enactments. We have stated the flucluation of the Funds to be one great objection to the monopoly which the bill proposes to give to them of the money of Friendly Banks; and we may now add that the delay in the sale of stock may expose these Banks to claims from their creditors which they are not prepared to meet, and may prevent depositors from having that command of their money which is so great a motive to accumulation, and which they might have through the facilities afforded in the ordinary course of business by the public banks.
In the 20ih clause of Mr. Rose's Bill, there is an oversight of some importance. It was certainly the design of the right honourable mover to enable the trustees to receive bequests as well as donations; yet the latter only are mentioned.
There are several other parts of the Bill which require revision and amendment, and which we doubt not will be attended to when it is again brought forward. We cannot, however, pass unnoticed the parts of it marked 21 and 22. The former of these proposes to enact that the members of Provident Institutions shall not be debarred from parochial relief in case of necessity. The principle on which this clase is founded is at once liberal and
politic; and without some such provision in a country like this, where poor-rates have taken deep root, and are contemplated as a certain resource against want, we cannot expect these institutions to extend generally through the lower classes. We are also of opinion with Mr. Rose, that the love and the habit of indepen. dence will in many instances prevent those who have saved much from applying for parochial relief. Yet the encouragement, we think, goes much too far; and the firm and able opposition which
VOL. XVI, NO. XXXI.
this part of the Bill encountered in the House of Commons is just what we expected. For it is to be observed in the first place, that there is no maximum fixed for the deposits of any individual; and in the second, that though the interest or dividend may in certain cases be applied in whole or in part, by the authority of the justices of the peace, to the support of an applicant for parish aid,
yet the principal sum subscribed (deposited) by such member shall not be affected or diminished thereby. Now a person might have five or six hundred pounds in a Friendly Bank, who from age or accident might be rendered unable to work, or, from having a sickly family, might require considerably more than twenty pounds, (the annual income arising from five hundred pounds, at four per cent.) for their support: Would it not be unjust that a poor tenant, struggling to maintain his credit, and scarcely able to supply his family with the mere necessaries of life, should be taxed to make up the deficiency, while he knows that the person thus relieved has an untouched capital which appears in his eyes to be affluence ? As the deposits are generally to be made in very small sums, it will not be, perhaps, an easy matter to separate the capital from the interest; but surely it can be no hardship in any case to use the whole interest for the support of the individual and his family, as far as it will go. Here the justices of the peace need not be required to interpose their casuistry.-- If they are to have a discretion, let it apply to the capital, and let them have power to protect a part or the whole of it from the overseer's gripe, according to circumstances, as a reward for past care, and a stimulus to future exertion, should health and opportunity return. That part of the Bill (No. 22,) we consider as peculiarly harsh and inexpedient, which prevents the legal heirs of a depositor who may die intestate from receiving the sum due, otherwise than by letters of administration; except in the case of a wife and children, when the whole amount of principal and interest shall not exceed fifty pounds. Many members of Friendly Banks may have sums at the time of their decease too small to defray the expense of administration, but which would be highly serviceable to their legal representatives. This surely might be in all plain cases departed from, when the sum is under fifty pounds, upon a certificate from a clergyman and two church-wardens, and a letter of security against any future claimants from one or two substantial persons. A clause should be inserted to exempt the Friendly Bank money from payment of the legacy duty.
Such are the reflections which a careful consideration of Mr. Rose's bill has suggested; but we are afraid that it is yet too early to legislate definitively on the subject, and it may be better to proceed with great caution, till, from the collision of different opinions,