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rigour of this blockade is not generally known; so effectual did it prove, that numbers of the native inhabit ants, particularly of the lower orders, such as gondoliers, absolutely perished through famine.

On the Isle di Murassi, already mentioned, are a number of houses, of a pretty enough appearance at a distance, but miserable on a nearer view; they are inhabited by fishermen, who, with their wretched and squalid wives and children, flock around a stranger, begging with deplorable looks and tones of penury and want. The great Laguna, or shallow lake, also already mentioned, varies in depth from half a foot to three and four feet and more. From the eastern termination of the pier at the Bocco del Porto, the course of the deeper channel, accessible to very large vessels to the port of Venice, is marked out by wooden stakes, or beacons, placed at short distances.

The long continued blockade of the English annihilated the commerce of the port, and proved very disastrous to the Venetian vessels, many of which became ruinous, and have been found incapable of repair. For some days during September last (1816), only two vessels cleared out at the customhouse one for Constantinople, and another for Corfu. About half a dozen of small craft, Swedish, Danish, Dutch, and Italian, were then lying at the births, waiting for cargoes, but with little expectation of obtaining them. During the war, capital was wasted, and mercantile spirit extinguished; it is not surprising, there fore, to find the commerce of Venice at the lowest ebb. The merchants are now endeavouring to obtain from the Austrian government some advantages, at the expense of the rival ports of Leghorn and Trieste, but with slender hopes of success; and it is not perhaps without reason, that the Venetians have begun to despair of any signal revival of the commerce of this ancient and once celebrated emporium-to which Europe, it may be remarked, was indebted for the invention of public banks.

ON THE CONSTITUTION AND MORAL EFFECTS OF BANKS FOR THE SAVINGS OF INDUSTRY.

MR EDITOR, AMONG the numerous modern discoveries, by which the limits of hu

VOL. I.

man power have been extended, and the condition of the lower orders of society ameliorated, a very conspicuous place ought to be assigned to the establishment of Saving Banks. They have originated in a spirit of pure benevolence placed within the reach of the lowest and most helpless portion of the community the means of a secure and profitable deposite, of which they are now eagerly availing themselves-and in proportion as they are multiplied and extended, so must necessarily be the industry, the frugality, the foresight, and the comparative independence, of the lower classes. What is no small recommendation-no complicated or expensive machinery is required for either their formation or their management; the time of the contributors needs not be wasted in discussions and arrangements to which their knowledge and habits are but ill adapted; and no opportunity is afforded for combination. Every one may lodge and withdraw his little hoard according to his convenience, instead of the time and amount being prescribed and enforced by penalties, by which the savings of many years may, without any delinquency which it was in the contributor's power to avoid, be suddenly transferred to his less needy or more fortunate associates. To give facility and encouragement to the la-. bourer to save a little when it is in his power to save, with the most perfect liberty to draw it back, with interest, when his occasions require it, is the primary object, and ought to be the sole object, of this institution. Much of the distress of the lower orders may thus come to be relieved from their own funds, instead of their having recourse to poor rates or private charity.

It does not seem necessary to enter into the details of these establishments, which are now sufficiently numerous to furnish room for selection, whatever may be the local circumstances in which it may be proposed to introduce them. Nor is it consistent with my present purpose, and the limits to which this letter must be confined, to examine the rules by which their business is conducted. Little, that is of real utility on this head, can be added to what has been already laid before the public, in the numerous pamphlets and reports which this interesting

C

novelty has produced, and in the periodical works in which their merits have been discussed. What is wanted, is not the knowledge of minute particulars regarding the plan and conduct of the establishment, which ought to be varied, perhaps, with any considerable difference in the number and character of the contributors, and in the tract of country over which it is expected to extend. I shall therefore content myself at present with a few remarks on the nature and purpose of Saving Banks in general, which after all that has been written on the subject, do not seem to be well understood even by some of those who have made the most meritorious exertions in promoting them.

It cannot be too frequently recommended to those who may take the lead in establishing banks for savings, to study to combine simplicity with security, and to give to them such a constitution as may not contain with in itself the seeds of dissension and party spirit. While the security of the funds is not impaired, a preference should always be given to what is simple, and promises to be permanent, over what is artificial, of a remote or doubtful tendency, or merely calculated for producing a temporary effect. Upon this principle I would venture to suggest, that a Saving Bank should approach as nearly as possible in its character to a. Mercantile Bank-that no inquiry into the character or conduct of the depositors should be tolerated for a moment-that the choice of managers should not in general be vested in the depositors, nor the managers themselves taken from that body, and that it should be kept entirely distinct from Benefit Societies, Annuity Schemes, Loan Banks; and its provisions strictly confined to its own proper object of safe custody and prompt payment with interest.

In hazarding this opinion, it is not necessary to deny the influence of great names on the list of honorary and extraordinary members, in giving a momentary eclat to a new institution, and in inspiring the public with confidence in its respectability. But it may well be doubted, whether, after the advantages of a Saving Bank have been generally understood, a parade of inefficient officers will contribute much to its permanency, and to its utility among the lower classes. My own opinion cer

tainly is, that to place the Lord Lieutenant, the Members of Parliament, and the Sheriff of the county, for the time being, among the honorary members of so humble an institution as a bank for the savings of the labourers of a small district, is calculated to call down ridicule on the whole undertaking. But should these gentlemen, constituted members of the bank merely in virtue of their official situations, choose to interfere with the details of its business, either directly or indirectly, without having first acquired by their personal character, or the interest they may have taken in the prosperity of the institution, the confidence of the great body of the depositors, there is every reason to believe that the consequences would be most pernicious. The lower classes would be ready to suspect, whether with or without reason is of little consequence, that the knowledge of their circumstances, and the control over their funds, possessed by these official characters, might be employed in enforcing obnoxious measures of public policy. And on every occasion, when the popular feeling is opposed to the enactments of the legislature, how soon soever it may subside, we might expect to see such a run made upon our Saving Banks, as happens on a larger scale of business, whenever the creditors of individuals, of societies, or of the public, begin to lose confidence in the prudence or ability with which the affairs of their debtors are conducted. Add to this, the habitual jealousy which the lower classes have been taught to entertain of their rulers, so frequently kindled into phrenzy by the arts of the disaffected; and it may be laid down as a rule, that in these simple institutions, which ought to have no other object than the ostensible one, every ground for suspecting the influence of government should be carefully excluded, as not only unnecessary, but likely to be injurious.

With this impression, it is impossible not to feel some degree of alarm at the Bill introduced into Parliament last Session by Mr Rose. As I do not know the provisions of this Bill in its amended form, I shall only venture to observe, that the clause which requires the funds of the Saving Banks to be invested in government securities, ought on no account to be extended to Scotland, where banks of the most

tion, but which is not the less just when this obvious distinction of character is, as I am inclined to think it should be, preserved, both in its original constitution and in the conduct of its affairs.

undoubted responsibility are always
ready to receive, and to pay four per
cent. interest for money deposited;
and some of which have displayed so
much liberality, as to allow even five
per cent. on the deposites of Saving
Banks. It may be doubted, whether
such a clause would be advisable even
for England. The first and imme-
diate advantage of such a provision, it
is said, is greater security; and the
next and more remote one, that it will
give the lower classes a greater interest
in the stability of the government. But
its disadvantages are not less obvious,
and to many may appear to prepon-
derate in the scale. From every just
view of the nature and object of Sav-
ing Banks, every thing that has the
appearance of compulsion must be ex-
cluded. This is one fundamental
principle which should not be lost
sight of in any of its operations.
Against this greater security, too,
must be placed the perpetual and often,
even to well-informed people, the un-
accountable fluctuation of the public
funds, produced, as is well known, by
means not always the most creditable,
and therefore more likely to irritate
the minds of the depositors than to
attach them to their rulers. Besides,
it may be asked, what is the amount
of this security, in so far as individual
contributors are concerned? They can-
not go to the stock exchange to make
the purchases themselves, but their
money must pass through the hands
of two or more individuals before it
can be invested in the public funds,
and through as many again when they
choose to withdraw it; so that the res-
ponsibility of their own directors must,
at least in the first instance, be their
principal dependence; to say nothing
of the delay that must occur in the
payments of the bank, unless a con-
siderable proportion of the deposites
be retained by the treasurer, and con-
sequently be unproductive. The Quar-
terly Reviewers observe, (No 31)
that "the investment of money be
longing to friendly banks should be
left to the direction of their members,
or to that of the trustee whom they
may appoint, and from whom they
may require security for its proper ap-
plication" an observation which im-
plies, indeed, that the different char-
acters of a creditor and of a member
of a Saving Bank, must necessarily be
identified in the plan of its constitu-

I have already expressed my conviction, that a Saving Bank, in its character, ought as nearly as possible to approach to a common trading bank, or to that branch of its business which consists in receiving and returning money deposited; and, as in Scotland, with interest for the time it has been under its care. Whatever departure from this principle, therefore, may be desirable in the commencement of a very limited local establishment, such as the parish bank of Ruthwell, in Dumfriesshire, the inconvenience and danger that must be felt from the popular election of the officers of a numerous and extensive association, composed, with few exceptions, of the least informed portion of the community, seem to outweigh all the advantages which have been ascribed to it. While the institution is in its infancy, and the zeal for its success, which in some measure supplies the want of experience in the managers, may be paramount to every other feeling in the minds of the depositors, there may be no great inconvenience in general meetings and periodical elections, which, at this early period, it cannot be difficult for its philanthropic founders and patrons to direct or control. But it is by no means probable that men, whose education and property entitle them to influence the proceedings of such associations, will always be found ready to undertake so difficult a task, and always successful in the attempt. There is certainly more reason to fear, after the zeal of novelty has subsided, and the founders have been removed by death or otherwise, that the management of the concern may become the object of caballing and intrigue among the members themselves, or among others in a station very little higher, and be seized by men whose knowledge of business, or whose integrity, is far from being their chief recommendation. It would display little knowledge of human nature to predict different consequences from the popular election of the officers of Saving Banks in a great town, where the association must contain a large portion of heterogeneous and repulsive materials.

It may naturally be asked, who shall be the officers of these banks, if they are not to be chosen by the contributors themselves, either out of their own body, or from the higher classes? To this I might answer, by referring to the highly respectable self-constituted banking companies in every part of Britain; but I am aware, that the analogy between these and Saving Banks is by no means complete. The object of the one is the profit of the partners, whereas that of the other ought to be to promote the welfare of the labouring classes; and, on this account, the services of its managers should be either altogether gratuitous, or paid for at so low a rate, as to hold out no inducement, in the shape of emolu ment, to such men as it would be safe. to intrust with its funds. But if there be a want of benevolent individuals among the higher classes, of their own accord to incur the responsibility, and assume the direction of those Saving Banks, which by their constitution exclude popular elections, it does not readily appear, that the circumstance of being elected by the members, perhaps in the face of much opposition, will inspire benevolence, or insure efficiency. For, let it be observed, that whether the officers be or be not named by the depositors, it is indispensable to the success of the establishment, that they should be men of property and education, much above the level of the depositors themselves. Even Mr Duncan, the founder of the Ruthwell Bank, and the advocate of the popular system, has confined the choice of its office-bearers, in the first instance, to the donors and annual benefactors of the society. It cannot well be doubted, that there are in almost every country parish, and certainly in every town, a few respectable individuals, able and willing to undertake the management of a Saving Bank, who might not, however, choose to attempt the far more arduous task of preserving order in a large assembly, or of appearing in it as candidates for nomination, and mixing in the discussions, which, on such an occasion, can hardly fail to be introduced.

It may be said, however, that there can be no need for going out of the society itself for the necessary officebearers; and the organization of Benefit Societies may be adduced, in proof of the competency of the depositors in

a Saving Bank to the management of all its details; and the success of these Societies as a further proof of the advantages to be expected from the choice of their own functionaries by the depositors. But a Saving Bank and a Benefit Society are usually as different in the information and circumstances of their members, as in their objects. The frequent meeting of benefit societies, or of their committees, is necessary for the admission of new members, and for carrying into effect, as occasions require, the very purpose of their establishment. The cases of applicants must be speedily examined, and such allowances made to them out of the funds as they are entitled to receive by the rules of the society. The responsibility of the managers is not confined to the security of the funds, but extends also to the mode in which they are employed, and the receipts and disbursements must there fore be investigated at short intervals. Every member has an equal and undivided interest in the welfare of the concern, from which he cannot withdraw himself at pleasure, like the depositor in a Saving Bank. The partners of a company in which the members reciprocally insure one another, are held together by a bond of connexion, which can terminate only with their lives, or the dissolution of the partnership. Every member must therefore be known to the great body of his associates, all of whom are nearly on the same level. But it is of importance to observe, that this level is placed somewhat higher than that of the great body of depositors in Saving Banks. The most numerous members of benefit societies are not of the class of common labourers, but men bred to trades, who have had the advantage of being educated in their youth, or have since acquired that knowledge of business which is necessary to success in their professions, in which many of them arrive at independence. From the very different objects and materials of a benefit society, therefore, it cannot be inferred, that the principle of their organization is either necessary or suitable to that of a Bank for Savings.

If we are to look forward to the general establishment, and to the permanence of Saving Banks, some fears may be entertained for the constant and ef fective operation of that part of the ma

chinery which is composed of the benevolence of the higher orders. It is not altogether improbable, when these banks have become very numerous, and stood so long and so firm, as to seem to require only that protection which the law confers on all the honest pursuits of private interest, that the zeal of that class, from which it is proposed the managers should be drawn, may not always be found sufficient for the conduct of their affairs. Should this apprehension be realized, much stronger reasons than at present will then be felt for having recourse to the alternative of the popular system; and with much less danger of inconvenience, after all the details of management have become familiar by long practice. But though I am not so well acquainted with the local arrangements of England, as to suggest the mode of eventually supplying this desideratum, by means of the resident magistracy or clergy; yet, if Saving Banks shall be found in any considerable degree to operate favourably upon the habits and condition of the lower classes, and particularly in diminishing poor-rates, there is every reason to hope, that the voluntary and gratuitous services of men of property and education will always be supplied in abundance. In Scotland, there is perhaps still less reason to fear the want of such talents and disinterestedness. In every parish there are at least two respectable individuals, the clergyman and schoolmaster, who may be confidently expected to undertake the executive department; and the landed proprietors of this country, justly alarmed at the progress of poor-rates in England, and anxious to ward off the evil from themselves, certainly would not hesitate to give the most ample security for the faithful administration of all the affairs of the institution.

From these remarks on the object of Saving Banks, and the principle on which they should be formed and conducted, it will be seen that I am de cidedly averse to the measure that has been recommended, of combining with them a scheme for converting the deposites into annuities. Those who, from the best motives, would thus hasten to rear the superstructure before the stability of the foundation has been proved, ought to consider, that the more complicated and laborious the duties of the managers may become,

the less probability there is of their being faithfully discharged by men who give their services without a pecuniary reward. The benefit to which the depositors would be entitled, if their stock were converted into an annuity, must depend upon a variety of circumstances, in particular upon their age; and the errors in calculation, which may justly be expected to occur, if an annuity scheme were ingrafted. upon a Saving Bank in country parishes, would, in all probability, soon bring ruin upon the whole establishment. It may be doubted, indeed, how far it may be advisable to urge it as a duty in the lower classes, to save a part of that income which barely suffices for their own maintenance, or to excite a blind zeal for accumulation, even though, as in the case of Saving Banks, they be allowed to withdraw their deposites at pleasure. In proportion as the zeal of all concerned may at first be somewhat immoderate, so is the danger that disappointment may be succeeded by indifference. All that is really necessary, or perhaps expedient, is to afford to the labouring classes the opportunity of depositing their earnings under safe custody, and of drawing them out again with interest, when they are too small in amount to be received by mercantile banks; and if the advantages of the measure do not form a sufficient inducement to them to avail themselves of it, it were idle to expect success to Saving Banks, as it is unjustifiable to seek it, by any other means of excitement.

To obviate the objections which I am aware may be made to this exclusion of popular interference, I must beg leave to conclude this part of the subject with observing, that hitherto I have chiefly had in view the Saving Banks of Scotland, in which the depositors are understood to be, at least the far greater number of them, of the very lowest description of accumulators. It is for such people, principally, that there is felt a want of Saving Banks in this country; for all our mercantile banks are in the practice of receiving so small a sum as £10 in one payment, and returning it on demand with interest; and their agents are spread throughout almost every part of the country. But I can easily suppose, that a higher class of depositors may avail themselves of this institution in

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