SAVINGS' BANKS are banks esta blished to encourage habits of prudence in the poorer classes, who were previously without any places where they could safely and profitably deposit their savings.
The origin of savings' banks has been attributed to the Rev. Joseph Smith, of Wendover, who, in the year 1799, circu lated proposals, in conjunction with two of his parishioners, in which they offered to receive from any inhabitant of the parish any sum from twopence upwards every Sunday evening during the summer months, to keep an exact account of the money deposited, and to repay at Christ mas to each individual the amount of his deposit, with the addition of one-third to the sum. The depositors were at liberty to demand and receive back the amount of their savings, without this addition of one-third, of any time before Christina., if they stood in need of their money.
The next institution of this kind that was established, of which we have any account, was founded at Tottenham, in Middlesex, by Mrs. Priscilla Wakefield. This, which was called the Charitable Bank, bore a nearer resemblance to the savings' banks of the present day than the Wendover plan. The Tottenham bank was opened in 1804. At first the accounts were kept by Mrs. Wakefield, who was assisted by six gentlemen who undertook each to receive an equal part of the sums deposited, and to allow five per cent. in terest on the same to such depositors of 20 shillings and upwards as should leave their money for at least a year in their hands. In proportion as the amount of the deposits increased, additional trustees were chosen, so as to diminish the loss which might otherwise have been con siderable, owing to the high rate of in terest that was allowed. In 1808 a so ciety was formed at Bath, managed by eight individuals, four of whom were ladies, who received the savings of do mestic servants, and allowed interest upon the same at the rate of four per cent.
The Parish Bank Friendly Society of Ruthwell was formed in 1810 by Mr. Henry Duncan, who published an account of his institution with the hope of pro moting similar establishments elsewhere. This was the first savings' bank regularly organised, which was brought before the public, and it is owing to this successful undertaking that previous to the year 1817 there were seventy savings' banks established in England, four in Wales, and four in Ireland.
In the year 1817 legislative provisions were made for the management of these institutions. Acts were passed (57 Geo. III. c. 105 and 130) for encouraging the establishment of banks for savings in Ire land and England respectively. Under these acts, the trustees and managers, who were prohibited from receiving any per sonal profit or advantage from the insti tutions, were required to enrol the rules of their institutions at the sessions. A fund was established in the office for the reduction of the national debt in London, entitled, ' The Fund for the Banks for Savings,' and to this fund the trustees were bound to transmit the amount of all deposits that might be made with them when the sum amounted to 50/. or more. For the amount so invested the trustees received a debenture, carrying interest at the rate of threepence per centum per diem, or 41. 118. 3d. per centum per an num, payable half-yearly. The rate of interest then usually allowed to depositors was four per cent. In Ireland the depo sitors were restricted to the investment of 501. in each year, and in England the same restriction was imposed, with a re laxation in favour of the first year of a person's depositing, when 100/. might be received. No further restriction was at this time thought necessary as to the amount invested, neither was the depositor prevented from investing simultaneously in as many different savings' banks as he might think proper. This circumstance was found liable to abuse, and an Act was passed in 1824, which restricted the ieposits to 501. in the first year of the ac count being opened, and 301. in each sub sequent year, and when the whole should amount to 200/. exclusive of interest, no further interest was to be allowed. Sub scribers to one savings' bank were like wise not allowed to make deposits in any other, but the whole money deposited might be drawn from one savings' bank in order to be placed in another.