Abstract

"Legal change and financial efficacy: The impact of the 1844 Savings Bank Act on trust accounts and trusteeship"

Linda Perriton, University of Stirling (linda.perriton@stir.ac.uk)

Savings banks were legally instituted in Britain in the early nineteenth century with a particular aim to help the working poor. Their arrival marked the rise of formal thrift provision for small depositors, with little competition for funds until the arrival of the Post Office Savings Bank in 1861. Savings banks filled an important financial function for those on the periphery of the banking system, but they were embroiled in recurrent debates about middle-class appropriation of services intended for the working poor.
In this paper, we explore the impact of legal change on the social and economic efficacy of the savings bank movement. The 1844 Act brought about several key changes with respect to the trust arrangement. Firstly, the individual for whom a trust account was established had to enjoy the benefits of the account, and, on withdrawal, signatures of both trustee and beneficiary were required. With respect to bank trustees, individuals were no longer liable for deficiencies at the bank unless they had made a written declaration – but few did. Perhaps unsurprisingly, defalcations followed – precipitating “the search for security” in the following decades (Horne, 1947).
We explore the use of trusts through a dual micro (depositor) and macro (institutional) perspective. We use the detailed ledger records of Limehouse Savings Bank (London) to provide insights on the characteristics (name, address, and occupation) and account behaviours of depositors around the 1844 Act. We supplement this with a wider contextual analysis of the impact of the Act on the institutions; and an appraisal of the changing legal context - critical to placing the development of savings banks in their socio-political context.