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Good Words 1860
Penny Savings Banks

At the present time, when there seems to be such a desire on the part of every one to do as much as possible to assist in ameliorating the condition of those in the humbler ranks of society,— and as, from some unknown cause, there seems to be an earnest desire to increase the facilities for enabling the poorer classes to save even small sums, instead of spending them foolishly, not to say sinfully,—we have thought that, as the increase in the number of Penny Savings Banks promises to be an immense boon to the working classes, and as correspondents have asked information regarding them, it would be well to give a few hints as to the manner of working these institutions, shewing that they are so simple that any one with an ordinary knowledge of numbers and a little order and system, can easily manage them. Very likely some persons never thought of having anything to do with them, from having taken up the idea of a bank being some mighty great establishment. Let them divest themselves of this idea, and let them look on it as the means of collecting together small savings, and keeping them safely till they are needed for some useful purpose. Many, many a small sum is thrown away carelessly, and sometimes for drink, for no other reason than that it is found lying in the pocket. The first requisite for success, then, is:—Let perfect confidence be established between the depositors and those who are to have the care of the money. This can easily be obtained. Let five or six gentlemen of influence in the locality sign a letter of guarantee, obliging themselves to become security to the depositors for the safety of their money; they will incur very little risk by so doing, as they can protect themselves by keeping a strict watch over their agent or clerk; and for this purpose the money should be deposited, as soon as convenient, in the nearest bank—if a branch of the National Security Savings Bank, so much the better, as they are most accommodating and obliging to the smaller establishments. Let one of the trustees of the small bank take upon himself the responsibility of examining the pass-book of the larger bank every week, to make sure that the money has been paid in, and in this way not more than the amount collected on one night could be lost, even supposing the clerk should turn out to be dishonest. Another very proper precaution is to make the orders for money to be drawn from the larger bank only payable when signed by the clerk and one of the trustees. The only books that are required are a ledger and cash-book, which vary in size according to the prospect of a large or small amount of business being done. The cash-book may be of the simplest form possible, all that is required being a column for the number of the deposit and the ordinary money column. A very simple form of ledger is the following:—The two first columns being for the date, we have then eight accounts, or any number according to the size required, usually twenty in the two pages, and three additional columns,—the first being intended for repayments, the second for transfers, and the third for the total sums received on each night.

The name of the depositor is written on the top line, and a progressive number, corresponding to the number on the depositor's book, is carried throughout the whole ledger. The sums deposited and repaid are entered under their respective numbers, and, at the close of the transactions for the night, they are added across and filled into the outer columns. It is quite evident, then, that when the additions of the outer columns are put together, they must agree with the cash and also the cash-book, provided they have been correctly posted. By having the ledger made long enough, twenty-six lines may be introduced from top to bottom, which, supposing the bank to be open during one night in the week, will last for six months. Each depositor is furnished with a small book, in which are inserted the sums paid in on each night, till a part of the money is to be drawn out, when the different sums are added together, the amount of the repayment is entered, and deducted so as to shew the balance remaining. It is not thought advisable to write the name of the depositor in the small book, as, independently of the great saving of labour, this plan has been found useful in cases where books have been lost and presented by the finder, who could not get the money from not being able to tell the name, shewing plainly that it belonged to some one else. After the first expense of the ledger and cash-book has been got over, and a supply of small deposit-books and hand-bills procured, the current expenses may be very small indeed — a hall, or school-room, or session-house can easily be procured, and a small sum will pay for coal and gas; but there is one item of expenditure, which, after the experience of several years, we believe cannot well be dispensed with, viz., a small allowance to a clerk, who will take the entire charge of the ledger. Gratuitous assistance in this matter is generally freely offered; but our experience has taught us that paid services only can be relied on for any length of time. Many a young man would willingly undertake the duty for L.5, 5s. a-year, which is not too much for two or three hours' attendance for one night in each week, besides balancing the ledger twice in the year. The clerk should be assisted by other parties, who will attend in rotation, and give their services gratuitously, to take charge of the cash-book, as he should confine his attention entirely to the ledger. The ledger should be balanced at the end of every six months, to make sure that the accounts are all quite right. This is a very simple matter, if care has been taken to make the entries correctly on each night. All the accounts still open must be added up, and the aggregate amount being found to agree with the balance at the credit in the larger bank, will shew that everything is correct. For many reasons, it is not thought expedient that a large sum should accumulate in the Penny Bank. To obviate this, whenever a depositor's account has reached the sum of 20s., it should be transferred to the larger bank, to an account in the depositor's own name, when he will receive interest for it, the smaller bank not allowing any interest, partly on account of the useless labour of dividing a trifling sum of interest over a large number of accounts, and partly because the interest should go, in so far, to pay the expenses connected with the bank. When a transfer is made, the pound is deducted from the sum at the credit, the balance is brought down, and the pound is entered in the second last column in the ledger headed "Transfers." The large sums which have been accumulated in these small establishments would astonish those who have not had their attention turned to this matter; in some cases, from L. 15 to L.20, and in many cases, L.6, L.7, and L.8 have been transferred in the course of a year or two. One of the Penny Banks in Glasgow has, since May 1852, received in small deposits—from 1d. upwards—no less a sum than L.2030. * That they have been productive of a vast amount of good there can be no doubt, as the gratitude evinced by those who have been benefited by them is a convincing proof; and, unlike most institutions, we are not aware that any bad results can be traced to them. There are some persons—fortunately they are very few in number—who object to these Small Savings Banks. They may suppose that they have good reasons for doing so; but we would advise them to look in on a Saturday night at any of them in full operation, and see the crowd of happy faces of the depositors; or if they could see, as we have seen, the mother with tears in her eyes drawing out her money because there was "trouble in the house," thanking God that she had still something left to carry her through, and then, before leaving, turning to the bank manager and saying, "Oh, sir, if it had not been for you I would not have had a penny," surely they would change their minds, and lend a helping hand to these institutions, instead of damping the spirits of the promoters of them. Prom what has been said, it will be seen that the right conducting of a Penny Bank is a more simple matter than might at first be imagined; regularity and a correct system, however, being absolutely necessary; but where these are brought into play, with full confidence on the part of the depositors in the honour and honesty of those engaged in the work, success is very certain. A prejudice exists in some minds among the working classes against these banks, because they suppose that, from the circumstance of their masters being connected with the bank as trustees, they have an opportunity of seeing how much money the depositors are able to save, and may endeavour to lower their wages. This is altogether a very mistaken idea, and one that no master would for one moment think of acting on; so much is the reverse the case, that we venture to say, that there is not a master of any of our public works who would not rejoice to see all the men and women in his employment having their bank books; and, so far from reducing their wages, it would give them a far better opinion of their workers than if they knew that all their wages were spent and no part of them saved. It must be well known to many of our readers, that one of our wealthy manufacturers, not long ago, requested his workers to shew him their savings-bank books; most of them complied with his request, a few hung back and did not gratify him. The result was, that he exactly doubled the amount at the credit of each depositor who had the confidence to shew his book. The depositors may rest assured that the state of each depositor's account is kept strictly secret, and is not divulged to any one for any reason whatever. It would be well

that they dismiss this prejudice from their minds, as it has no good foundation to rest on. One word of advice to those who purpose setting up a Penny Bank. Do not be discouraged if, after a time, say six months or so, you find that the deposits are falling off; this is very generally the case, but by and by they will increase in number and amount; in fact, the receipts will ebb and flow, and the bank should not be allowed to go down because for a time it has not been encouraged as might have been expected; take courage and carry on, and by and by, when better known, it will gain new strength and increase. A good plan is to circulate hand-bills through the houses, reminding the inmates that the bank is open; let them contain a short address on the advantages of saving habits, few will take the trouble to read a long bill.

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