It is believed that the first school savings bank was established in Germany in 1820. Other school banks were founded in other European
countries, including England, later in the 19th-Century. The methods employed were generally one of two basic systems:
- cash
received was recorded on a card or book issued to the pupil, the teacher crediting the sum in the associated bank's accounts;
- cash
was exchanged for a stamp (or coupon) of equal value that could be deposited to an account in the associated bank at a later date,
or redeemed for cash.
The first system was employed by schools in Birmingham and was the system 'taken over' by the BMB following negotiations
with the City's Education Department in 1919 - despite (or perhaps, because) the Bank having had considerable experience of coupon
based systems.
In his book Britain's First Municipal Savings Bank, the Bank's first General Manager (J P Hilton), included a Chapter
on the subject of School Savings Banks. This chapter covered the period from the Bank's commencement in 1919 to the date of the book's
publication in 1927.
The Minutes of the Bank's Management Committee and Sub-Committees, plus reports to the City Council and in the
Annual Accounts, provide some background to Hilton's history and also provides details of the progress made from 1927 to 1975.
On the publication of Mr J F Fitch's proposal for the establishment of savings banks in Board schools, the Education and School Management
Committee, of the Birmingham School Board requested one of its members to examine and report upon the scheme, with a view to its adoption
by the Board, and the subsequent opening of banks in the various Board schools. The report was prompted in June, 1875, and stated
that in the opinion of the writer the plan was worthy of adoption by the Board; that it would entail little trouble on the part of
the masters and mistresses; could be simply and easily carried out; and that the establishment of such banks in the Board schools
would be productive of much good to the scholars. The report concluded by recommending:
1. That in each Board school a savings
bank be opened.
2. That the head-master, or one of the assistants, be appointed for that purpose, receive the deposits from the boys;
the head-mistress, or one of the assistants, from the girls; and the mistress of the infants' school from the infants.
3. That two
or three managers be appointed to act as trustees of the bank, who need not necessarily be members of the School Board. Their duties
would be to open accounts with the Post-office Bank, to see that all accounts were properly kept, and that the sums received from
the children, when they had reached a fixed amount, were deposited in the Post-office Savings Bank.
4. The duties of the receivers
would be, to receive the small sums from the depositors, enter them in each depositor's book, and at stated times, to pay over the
sums to the trustees.
The controller of the savings bank department will supply forms, and deposit books for the use of the children
without any charge, and the authorised rules issued by the department for such banks are:
1. Deposits of one penny and upwards
will be received.
2. The money received will be invested in the Post-office Savings Bank, on behalf of the above-named penny bank,
in the following names, being those of the trustees of the said penny bank.
3. Depositors may withdraw all or a portion of their deposits
on giving one week's notice. The deposit book to be left with the trustee in attendance.
4. Women and children may deposit and withdraw
money in their own names.
5. No person will be allowed to have in this penny bank more than £5 in all. So soon as the amount paid by
any depositor reaches £1, he will be assisted to open a separate account in his own name at the Post-office Savings' Bank, and he
will thus be able, if he wish it, to make his subsequent payments direct to the Post-office. As, however, no deposit less than one
shilling can be received at the Post-office Savings' Bank, he may continue to pay into the penny bank as before.
6. Each depositor
will be furnished with a bank-book free of charge, but should it be lost he will be charged twopence for a new one.
7. Strict secrecy
will be observed respecting all deposits.
8. Interest will be allowed at the rate of 2½ per cent. per annum.
The report and its recommendations
were approved by the Committee, and afterwards adopted by the Board. It was determined that the experiment should be tried for a time
in one school only, and that in Elkington-street was selected for the purpose. Mr J S Wright, vice-chairman of the Board, consented
to act as trustee or treasurer. The bank was opened, and the first deposits received in June, 1876, so that at the time of writing
this paper the bank had been in existence for a year, a period sufficiently long to enable us to form a judgement as to the probable
usefulness of such institutions, and the desirability of establishing one in every school.
The average attendance of children at the
Elkington-street School is: Boys, 315; girls, 301; total, 616. During the year the number of depositors has been: Boys, 247; girls,
152; total, 399, or more than half the average school attendance. The total amount of deposits has amounted to £121 11s. 4d., of which
sum the boys had deposited £61 10s 2d., and the girls, £60 1s. 2d., which shows that a larger capacity for saving has been displayed
by the girls, the average amount of the individual deposit being, for each boy depositor, 4s 11¾d., and for each girl, 7s. 10¾d.
At
the present time, June 1877, the total number of depositors is 187: boys, 97; girls, 90; the sum in the bank being only £36 2s. 8d.,
of which amount £18 3s. 6d, stands to the credit of the boys, and £17 19s. 2d. to the credit of the girls. This is not a large sum,
nor is the number of depositors satisfactory; but it must be borne in mind that a great depression of trade has been felt for a long
time, and that almost all the children attending the Board schools belong to the working classes, whose means for saving, small in
the best of times, are entirely taken away when trade is bad. Much good has, doubtless, been effected by the working of this Board
school bank. Habits of thrift have been contracted by the children, which may be productive of incalculable good in their future lives.
They have also been taught the value of a little foresight in providing for some object which they desired to obtain, for the largest
amount of withdrawals from the bank has been at Christmas, Easter, and Whitsuntide, which shows that they were saving for the purpose
of obtaining extra clothing in winter, or, perhaps, for a healthy holiday in summer, both of which objects are deserving of encouragement
and praise. Altogether, I think the results of this little history of a Birmingham Board school are sufficiently encouraging to justify
the Board in establishing such savings banks.
It should be noted that the Birmingham Board used the Post Office Savings Bank
(established 1861) to deposit funds, the Birmingham Savings Bank having ceased to exist in 1863. At some subsequent date, Lloyds Bank
replaced the Post Office Savings Bank.
The BMB established an early contact with the City Council's Education Committee with
the object of utilising the Bank to continue the work of the school savings banks. The Minutes of Bank Committee meetings of November
and December 1919 record that interviews took place with the Chairman of the Education Finance Sub-Committee, Mr F W Daniels. Subsequently,
some Committee members visited a local school in order to see the existing system in operation.
A visit was also was made to
Leeds to see the system worked there in co-operation with the Yorkshire Penny Bank - the Bank being represented by the Chairman of
the General Committee, accompanied by the City Treasurer, the [General] Manager and Mr Daniels. - the main outcome of this visit was
the inclusion of a provision for the automatic transfer of funds saved by the pupils to the BMB. Some years later, a fact-finding
visit was also made to Perth.
On June 7th 1920, the Bank's Finance & General Purposes Sub-Committee submitted the following
report:
Your Sub-Committee report that your Chairman with Councillors Fryer and Keatley and the Manager have recently had an
interview with representatives of the Education Committee on the above matter. At this Meeting proposals were submitted by Mr Daniels
as to the working of School Savings Banks in co-operation with the Municipal Bank.
Your Sub-Committee have considered the proposals
and now recommend that the following Scheme be submitted to the Education Committee for their approval, with a suggestion that the
same become operative as and from the 1st September 1920:
Suggested scheme of co-operation between the Municipal Bank and the
School Savings Banks:
(1) That the School Savings Banks shall work in conjunction with the
Municipal Bank.
(2) That the School Savings Banks shall retain their identity, and carry
on business in a similar manner as at present.
(3) That the Municipal Bank shall take the
place of and do the work at present done by Lloyds Bank.
(4) That six months before a child
leaves school its account shall be automatically transferred from the School Savings Bank to the Municipal Bank, and that every encouragement
shall be given to children to continue the practice of thrift after leaving school.
(5) That
the rate of interest allowed by the Municipal Bank be 3½% per annum, or such other rate as may be in force in accordance with the
Rules of the Bank.
(6) That to avoid competition between the two Banks, the Municipal Bank
shall advise children attending Council Schools to join the School Savings Banks in preference to opening accounts direct with the
Municipal Bank.
(7) That the Municipal Bank in conjunction with the School Savings Banks
shall be advertised on all suitable occasions in the school.
(8) That the Council be recommended
to appoint the Treasurer of the School Savings Banks as a member of the Bank Committee.
It was resolved that the scheme of co-operation
between the Bank and the School Savings Bank be approved, and that a copy of the scheme be sent to Mr Daniels for submission to and
approval of the Education Committee, with a suggestion that the scheme should become operative as and from the 1st September.
Following
consideration of the scheme by the Education Committee, it was decided that the introduction date should be August 1st 1920 and that
Mr F W Daniels be co-opted to the Bank Committee. Consequently, the Bank reported to the City Council on July 20th 1920:
An arrangement
has recently been made with the Education Committee whereby a close co-operation will be maintained between the Municipal Bank and
the School Savings Banks. The collections in the various schools will be paid over to the Municipal Bank, and the accounts of children
transferred thereto before they leave the schools. By these means the children are brought into touch with the Municipal Bank, and
it is hoped that this will be to their advantage in after-life. In order to secure the close co-operation which is considered advisable,
your Committee recommend that the Treasurer of the School Savings Banks for the time being should become a member of the Bank Committee.
However,
the arrangement did not come into operation until February 1st 1921 - the original date being postponed until some administration
details were agreed with the teachers, as reported to the Bank Committee on two occasions:
November 22nd 1920: Your Sub-Committee
have had under consideration a Report of the Manager on this matter, outlining the proposed arrangements for banking deposits etc.
Out of the total of 178 School Banks, it is anticipated that 142 can be dealt with through the medium of the Daily Branches. It was
proposed to deal with the bulk of the remainder at evening branches, but the Education Committee indicate that they cannot see their
way to sanction this arrangement, as it would necessitate the teachers being engaged out of School hours. The latter Committee further
do not favour the suggestion that the Money should be collected by the Bank at certain schools in certain areas.
With a view
to coming to a suitable arrangement with the Education Committee on the matter, your Sub-Committee have instructed the Manager to
arrange a conference between Councillors Fryer and Keatley and Mr Daniels.
December 20th 1920: Your Sub-Committee report that
Councillors Fryer and Keatley have recently conferred with Mr Daniels on behalf of the Education Committee, and an agreement has now
been arrived at regarding the 36 Schools which could not be dealt with at the Daily Branches.
The scheme was publicised in the
Bank's Annual Report for the year ended March 31st 1921:
SCHOOL SAVINGS BANKS - These Banks, conducted for many years in the
elementary schools of the City, are now worked in connection with the Municipal Bank. The advantages of linking up these avenues of
saving with the Bank are valuable, and parents are strongly advised to make these School Banks real avenues of thrift for their children,
so that in after life they will reap the benefits taught in schooldays. Parents are also advised to see that six months before a child
leaves school its account at the school is transferred to an account in the child's own name at one of the offices of the Bank.
The
first statistical report relating to the new scheme covered the period from February 1st 1921 to March 31st 1922:
|
(a) Amount
deposited by scholars |
£48,111. 0. 7. |
|
(b) Amount repaid to scholars |
£42,966. 12. 3. |
|
(c) No. of school departments in the scheme |
351 |
|
(d)
No. of scholars' accounts opened in the Municipal Bank. |
302 |
|
(e) Amount transferred under (d) above |
£534. 6. 11. |
The
equivalent report, twelve months later, struck a note of disappointment with particular reference to the fact that only 59 transfers
were made to the Bank:
The work of collecting monies from school children has been carried out by the teachers under the directions
of the Education Committee as heretofore. A total sum of £42,556. 14. 8 has been received and £41,322. 6. 5 paid out. Only 59 transfers
to the Municipal Bank have been made by children leaving school totalling £170. 15. 10. One cannot regard the system as a success,
and efforts should be made to introduce a better and more effective system.
No progress was made in efforts to introduce a better
system as reported by the Finance Sub-Committee in July 1925:
Negotiations have taken place with the Education Department with
a view to improvements being effected in the present system of school savings, but it has not been possible up to the present to agree
satisfactory arrangements. Your Sub-Committee consider it would be advantageous if a conference could be arranged between representatives
of the Bank and the Education Committee in order that the question could be fully discussed and they propose to approach the Education
Committee accordingly.
It was resolved that the Education Committee be invited to appoint representatives to meet representatives
of the Bank Committee with the object of the question of School Savings being fully discussed. The Chairman (Councillor Appleby),
Alderman Lovsey, Councillor Carter (later replaced by Councillor Gelling) and Mr E Hallas with the General Manager were appointed
to represent the Committee. Any discussions held did not produce any improvements to the scheme and, in March 1927, the Finance Sub-Committee
reported with the suggestion that certain points be submitted to the Education Committee:
Your Sub-Committee have given further
consideration to the question of school savings banks with a view to ascertaining whether any improvements can be made in the present
system, and have requested Aldermen Sir Percival Bower and Lovsey, and Councillors Gelling and Salt, with the General Manager, to
interview the Education Committee and submit the following points for consideration:
1 That the School transfer system should be put into operation, and that whenever a scholar's account reaches £1 that amount should
be immediately transferred to an account in the child's name at the Municipal Bank.
2. That withdrawals of sums at schools should be limited to amounts remaining in the scholar's account, thus reducing the work of paying-out.
3. That arrangements be made for short addresses on "Thrift" to be given during school hours by members of the Education and Bank Committee
or their officials.
4. That conferences should be held between the Education
and Bank Committees and their officials, including representatives of the Teachers, each half-year, to discuss savings bank work with
a view to creating, or maintaining, enthusiasm in the work and improving the system.
However, later that year, the General Manager
reported:
Although unable to report any change in the arrangements, discussions have taken place between the Education Committee,
the Bank Committee, and the Chief Officers, as a result of which there is a likelihood of other arrangements being made for dealing
with School Savings Bank work in the near future.
The City's Education Department had already established School Savings Banks prior to 1919. It is not clear for how long such banks
had existed, but they may well have been a continuation of a system initially set up in June 1876 in the Birmingham Board Schools.
The
Birmingham Board Schools were established under the Elementary Education Act of 1870 in order to provide schooling for children between
the ages of 5 and 12. The 1861 Census indicated that of the 4.3-million children of primary school age in England and Wales, 1-million
were in voluntary church schools, 1.3-million were in state aided voluntary schools, and 2-million were receiving no schooling at
all.
Board School premises were built in the period up to 1902, after which they were taken over by Local Education Authorities. Approximately forty Board School premises were transferred to the City of Birmingham Education Department in 1902, the majority having been built in the 1870s and 1880s. Some of the school buildings have survived, including the Oozells Street Board School that opened in 1878 in order to educate 807 primary children; the building endures as the Ikon Gallery, just off Broad Street (right).
The
existence of school savings banks in the Birmingham Board Schools was the subject of a report by J A Langford, LL.D in 1877: