The Pamphlet Collection of Sir Robert Stout: Volume 37
At present nothing so keeps down our lowest laborers as the want of investments for their savings. To employ these the wellmeant institution of Savingsbanks has been devised; which must necessarily prove less efficient in proportion as the scale of operation enlarges.
My inquiry is not whether individuals should use it in the defect of anything better; perhaps they ought: but my inquiry is whether the Government should establish and support the system.
The [first question is—Whence is the means of paying interest to be got except by taxing the people?
The answer which will be given is—That the money paid into the savingsbanks may be invested in purchasing shares in the National Debt; consequently, if the debt be estimated at £750,000,000 no difficulty is encountered as long as the total accumulated in the savingsbanks is less than this sum. The Government does but pay to the depositors the yearly interest which otherwise some other parties would have received.
It is true that the deposits of the banks are paid over to the commissioners for reducing the debt; and as long as the sum is under £100,000,000 the public will perhaps remain blind that there is a powerful agent for artificially buying up the value of government securities, and riveting this noxious system more firmly than ever on the nation.
Parliament has agreed to allow to these banks £3 16s. per cent, yearly. A State which is now so hopelessly in debt that it will make no vigorous effort for relief to plunge itself into a voluntary guarantee of £3 16s. per cent, for whatever sums the industrious classes may choose to intrust it with seems like an infatuation. What else is it but to volunteer to become a borrower of any number of additional millions, with the further embarrassment of being liable to pay to the depositors any sums at call? If a panic arose which caused a run on these banks the government must of necessity refuse payment.
Many years ago a system was in operation which was called the "Sinkingfund," intended to lessen the national page 55 debt. This was at last destroyed by Parliament on finding that it had simply caused a new loss of £11,000,000!
There is a feeling of misgiving as to the modern Commissioners for Reducing the National Debt, to whom the money of the savingsbanks is intrusted. Of course they do as they are bid—that is not the point; but possibly when this matter some years hence is closely looked into it may appear that the savingsbanks have cost the nation a second £11,000,000!
The whole idea is preposterous and ruinous of the State finding investments for individuals. It is an idea which never could have been conceived except where the vastness of Centralisation and the entanglement of an artificial system of revenue darken men's view of natural tendencies.
People seem to forget that the annual taxes must be paid out of annual skill and industry, and that Parliament has no fertile farm where sovereigns will grow into guineas of themselves. If a law of "commandite" was passed I cannot but think it would be a most wholesome thing to enact, That within five years' time the whole money of the savingsbanks be repaid to the depositors, and the system totally destroyed.
If our operatives were once accustomed to invest their savings in their masters' trade—nay, or even in other trades by the side of it—there is no reason why everyone who was moral and prudent and enjoyed good health should not by the ago of thirty be a little capitalist.
All wellbeing tends to its own increase: better education, better habits, more knowledge, sounder sense, would all grow together. Moreover when the workman began to receive visible gains from capital they would rapidly leave off their grudge against capitalists, and the feud of the orders would come to an end.
The Ciubs might survive, but be directed to far better ends, especially if they elected rich men to be their treasurers, and admitted all persons of the same locality without reference to trade or station. But in all these matters they must fight their own battles and win their own happiness. They repudiate advice as dictation; other orders therefore must be satisfied with securing that there be nothing in the public enactments to perpetuate the wilfulness and misery of this class.
(Professor F. W. Newman.)