deposits of half a million each. In Exeter
there is a bank with thirty-five thousand
depositors, and half a million of money.

This immense amount of business is done
at no very great cost. For the five hundred
and eighty-four banks, there are altogether
only eleven hundred and forty paid officers.
The salaries of these officers amount to no
more than seventy-five thousand pounds
a-year; and they manage the business of
more than a million of depositors, whose
accounts exceed twenty-eight millions sterling
—a sum equal to the capital of the Bank
of England.

The mere fact of any institution having to
deal with so enormous a capital, renders it one
of great importance commercially. But when
it is remembered that the vast aggregate is
made up of small savings; and that additions
to, or withdrawals from it, furnish a clue to
the fluctuations between the prosperity and
depression of the largest, most useful, and
least wealthy among us—the thews and
sinews of the nation—the administration and
management of Savings' Banks cannot be too
jealously watched.

Unhappily a painful interest has been lately
imparted to the system by the abstraction of
large sums by certain local managers; and
by the discovery that to make these defalcations
good, there exists no government
liability. Indeed by law (the act of 1844)
even the Trustees are not liable; but honour
has always, as we shall see, proved with them
stronger than the statute. A clear
understanding of the actual connection of the State
with Savings' Banks is of vital importance,
not only to depositors, but to those who
interest themselves in promoting the banking
system among the humbler classes; a system,
which, it may be safely affirmed, has hitherto
proved of the utmost benefit not only to the
worldly prosperity, but to the morals of the
working bees of our Great Hive.

Savings' Banks were first established from
motives of benevolence. They soon, however,
came to involve such great responsibility that
the managers were anxious that the State
should give them the benefit of its support.
The State was nothing loth, for it saw the
advantage of having such large amounts of
money in possession. Accordingly, in 1817,
there was opened at the National Debt Office,
a "Fund for the Banks for Savings," and an
act was passed compelling the Trustees to pay
in their deposits to that Fund, receiving a
debenture which bore interest at the rate of
£4. 10s. per cent.

The Government, therefore, is only responsible
for the money after it is paid to the
National Debt Office: it is not accountable for
deficiencies arising in the course of Savings'
Bank transactions, or from the embezzlement
or mismanagement of local officers. Still
depositors are seldom defrauded; for when such
defaults have happened, the Trustees and
Managers of the Bank concerned have
stepped in to cover the deficiencies, except in
a case which occurred in Wales in 1824, and
in other instances subsequently in Ireland.
In no one case, on the other hand, has the
Government ever rendered assistance to the
value of a farthing. Why, will be seen when
the dealings between the local authorities of
these banks and the National Debt Office are
explained. They are simply as follows:—The
accumulated deposits of each Savings' Bank,
are paid over to some neighbouring banker,
or other person, who acts gratuitously as
treasurer. The treasurer pays the money, by check
or otherwise, to the National Debt
Commissioners, who invest it in Exchequer Bills or
Stock. At the end of the year they allow
an interest upon the amount deposited. Out
of this interest the Savings' Banks Trustees
are authorised by law to pay interest to the
depositors at the rate of not less than £2. 15s.,
nor more than £3. 0s. 10d. per cent. per
annum. The Banks vary in the precise rate;
the average rate of interest afforded by all
the Banks in the United Kingdom is £2. 17s. 6d.
Thus 7s. 6d. per cent.—which constitutes the
difference between £2. 17s. 6d. and the £3. 5s.—
forms the fund out of which is defrayed the
charges of management.

In the majority of Banks, there is only one
paid officer; but of course the number varies
according to the amount of business. The
St. Martin's Bank is the most complete
establishment of the kind, and consists of
sixteen persons. Some Banks have only one
remunerated official. In every case, the
National Debt Commissioners have power to
make such regulations, under the Savings'
Bank Act, as enforce each paid officer giving
heavy security for his honesty.

It is of great consequence that the public
should understand that the defalcations which
have of late caused some distrust in the
stability of Savings' Banks, have not arisen from
any defect of the great principles, but only
in the details, and from the abuses of the
system. They have happened chiefly in
consequence of the culpably loose and irregular
conduct of the local managers; but partly from
the carelessness or ignorance of depositors.
The chief manager of an Institution in
default—as in the latest case which has come
before the public—has left everything to the
actuary or cashier, who did precisely as he
pleased, and he is blamable for laxity. On
the other hand, most of the monies of which
depositors were plundered never passed
through a Savings' Bank at all. They were
paid to the Officers of the Banks at their
own abodes, and these officers never gave
any account of them to the Managers. The
only way to stop this, is to make it criminal
for any officer of a Bank to receive the money
of any depositor, at any other time or place
than at the Bank during the regular Bank
hours. The fact is that there have rarely, if
ever, hitherto been any genuine frauds upon
Savings' Banks. The frauds have taken