CONTRIBUTIONS OF THE BRITISH SMALL INVESTOR, 1914-9 (Decreases are printed in italics)
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369
Date
Post Office and Trustee Savings Bank Depos- its (Net Receipts)
Post Office Issues
War
Savings Certificates Purchase Price
Certificate Repayments including Exchanges for War Loans, etc.
Net Cash Total
4l*and 5 %t War Loans
5 and 6 % Exchequer Bonds
5 % National War Bonds 4 % Victory Bonds J 4 % Funding Loan **
Total for five months 1914
1,152,000
1,152,000
Total for year 1915 .
6,4^6,000
39,961,000*
33,505,ooo
Total for year 1916 .
11,938,000
138,000
43,900,000
42,371,000
200,000
97,781,000
Total for year 1917 .
5,683,000
36,6o6,ooof
4,092,000
to,856,ooo
66,824,000
3,133,000
120,928,000
Total for year 1918 .
38.813,000
38,70o,ooo
108,349,000
6,28^,000
179,575,000
Total for year 1919 .
43,541,00011
13,700,0005
9,900,000!
7,400,000**
79,013,000
19,864,000
133,690,000
. Aug. 1914 to Dec. 1919 .
94,671,000
76,429,000
47,992,000
80,556,000
296,557,000
20,574,000
566,631,000
1[ The deposits included 55,109,506 on account of war gratuities to soldiers and sailors. N.B. During the year ending Dec. 31 1920, 57, 787,499 certificates of a cash value of 44,785,311 were sold, and repayments, including exchange for War Loans, etc. (excluding interest), amounted to 31,829,879.
and economy. Government securities furnish by far the best and safest medium for the investment of small sums of money, and we are glad to notice that steps are to be taken, by means of savings associations, to continue the policy which had proved so successful during the war."
Immediately after the Armistice steps were taken to con- solidate the position of the organization and to render perma- nent the machinery which had been set up during the previous three years. The county committees were disbanded, their work having been delegated to local committees which they had formed in practically every local area in the country. Steps were taken to devise a complete representative system through- out the organization. Adopting the association, or savings club, as the fundamental unit of the movement, steps were taken to ensure representation of the associations on the local committees. The local committees in their turn elected representatives on a new body called " The National Savings Assembly," which was to meet twice a year to discuss questions relative to the move- ment and at one of these meetings to elect representatives on the National Savings Committee, which, by the authority of the Government, dropped the word " war " out of its title. At the same time the personnel of the National Committee was con- siderably strengthened. In 1921 it formed a powerful body composed of representatives of Government departments and corporations and interests connected with thrift, together with representatives of the savings organizations in London and the provinces elected ort a wide franchise, so that its continued influence could not fail to be beneficial to the community.
Savings and Local Government Finance. In the summer of 1920 a step was taken which might well have far-reaching effects on the relations between local and Imperial finance.
The Finance Act 1920, Section 59, provided that 50% of the proceeds of the sales of savings certificates could be invested through the National Debt commissioners in local loans stock or bonds on the security of the local loans fund. Half the pro- ceeds of the gross sales after Oct. i 1920, in the area of each local authority, would be available, if required, for loans to meet authorized expenditure in connexion with the assisted housing scheme of that authority. These loans were to be made, irre- spective of the ratable value of the local authority, by the Public Works Loan commissioners, on the terms in force for the time being for ordinary loans to local authorities from the local loans fund for subsidized housing schemes. In the first instance, such loans would be restricted to housing purposes, but it was hoped that, when the existing difficulties with regard to housing finance had been overcome, the scheme would be given a more general application and that the system would become a permanent feature of local finance, bringing to the aid of local authorities a new source of capital which many of them had long been seeking. The authorities derive the greater part of
the benefit under the scheme, since, although they receive only half the proceeds of the .certificates sold, they are not responsible for finding any of the money required to meet withdrawals.
A critic of the ordinary savings bank in the last century said: " The savings bank is after all only a slot in the wall, with a sure grasp, but no tongue to advise it. Having no fructifying use for the money that comes to it from productive employment it closes over it like a grave and effectually sterilizes it"; and Sir E. Brabrook, Chief Registrar of Friendly Societies in 1897, said he " could look upon ordinary savings banks merely as infantile efforts in thrift." He regarded " a person who deposited his money in a savings bank so that it should be kept safe for him by someone else as very much less worthy of encouragement than a person who used his savings in some way in cooperation with other people for his own benefit or the benefit of others." He " did not look upon the progress of the savings bank with unalloyed satisfaction, but only as one step to self-help."
The system of linking up National Savings certificates with local finance becomes, in effect, a national credit bank spread over the whole country. The credits of the small investor, even the half-pennies and pennies saved by the school-children, are rendered, through the machinery of the savings certificates, the Post Office, the National Debt commissioners, the Treasury, the local loans fund and the local authorities, available for investment in social and beneficial enterprise for the good of the people themselves. Owing to the widespread area from which the money is raised, short-term borrowing can be used for long- term loans with the minimum of risk, while saving is stimulated amongst the very class to whom in the past it has been most difficult to teach economy and saving. The linking-up of " saving " with the definite use of the money saved continues effectually the teaching of the war and inculcates the lessons of economy, and goes far to meet Sir E. Brabrook's criticism of the savings bank. The system is certain to stimulate the interest of the small investors in local finance generally. Not only will this be a source of financial strength to the local authorities, but educationally it will be a great advantage, and the active cooperation of the local authorities and the savings committee should do much to stimulate habits of thrift and saving. OTHER COUNTRIES
The American savings movement is dealt with later. As regards other countries in the war it may be noted that the British National Committee had its organization in the East for the sale of War Savings certificates, the China and Japan War Savings Association having nine centres in China and three in Japan. The Japanese Government itself during the war sent its representatives to inquire into the methods of the National Savings Committee, and established its own system of National Savings certificates with terms of three, five and ten years.
In Canada, war savings and thrift stamps were issued by the Canadian Government.
