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Birmingham Corporation Savings Bank:
Coupons

The basic feature of the system employed by the Birmingham Corporation Savings Bank from its inception in 1916 was the use of coupons as a means of saving. Section 8 of the Bank's Rules was headed 'Method of joining Bank' and detailed the system that was employed:

 

(a) No person shall be eligible to be a depositor at the bank except a person in the employ of some other person in the city of Birmingham who is prepared to co-operate with the committee in regard to the making of deposits by or on account of his employees in accordance with the Act and these rules. 

(b)  All deposits at the bank shall be made in Birmingham Corporation Savings Bank coupons (herein after referred to as coupons), which shall be of value of 1s. or a multiple of 1s., and shall be purchasable from the bank by any employer direct or obtainable by him through any bank in the city from whom he desires to obtain them, and for that purpose any such other bank shall be supplied with such coupons by the bank on terms arranged with the committee. 

(c)  The coupons shall not be transferable or negotiable. 

(d) Any person eligible and desiring to become a depositor (hereinafter referred to as the depositor) shall, in a form prescribed by the committee which shall be supplied by the bank to the employer, authorise and request his employer to pay to him a specified amount of his wages in coupons instead of in cash until such time as he revokes or varies the authority in the prescribed form. 

(e)  On receipt of such request and authority the employer shall be entitled to pay to the depositor the specified amount of wages in coupons, and the depositor shall accept such coupons in lieu of cash. 

(f)  The depositor shall affix all coupons received by him to a coupon card (the form of which shall be prescribed by the com­mittee), which shall be supplied by the bank to the employer, and by the employer to the depositor. Each coupon card shall be numbered by the bank before issue, and a record of the name of the employer to whom it is issued shall be made. The depositor shall sign his name on the card and fill in his address thereon. The name of the employer shall also be entered on the card. 

(g)  When coupons to the value of £1 have been annexed to the card the depositor shall take the card to the bank or a branch thereof, and an account shall thereupon be opened at the bank in the name of the depositor, and a depositor's pass book issued to the depositor with a coupon card for further savings. The depositor, on opening an account at the bank, shall furnish a specimen of his signature.

 

The idea for a coupon method of saving was proposed by Councillor Eldred Hallas who suggested this method because employed persons (the only class of people allowed to participate in the saving scheme) were familiar with the stamping of contribution cards since the introduction of health and unemployment insurance in the National Insurance Act, 1911. The scheme had the obvious advantage of the worker committing to regular deductions from the weekly pay packet. His suggestion for this method of saving may have also been influenced by a 'War Savings Coupon' scheme that was operated by the National War Savings Committee. This Committee encouraged the setting up of local associations in April 1916 that became a very popular vehicle for small savings. Coupons at the value of 6d (Sixpence) were sold through the local associations, and when 31 had been collected, and affixed to a 'War Savings Card' these were exchanged for a 15/6d (Fifteen Shillings & Sixpence) War Savings Certificate. After 5 years, the certificate's value would have increased to £1. A similar scheme seems to have operated through the Post Office based on the purchase of 6d postage stamps.
The National War Savings Committee co-operated with the Bank's scheme as shown by this letter dated September 8th 1916, received by Birmingham Town Clerk (E V Hiley) from the National War Savings Committee:
 
Dear Sir,
 
Your letter of the 6th instant has duly reached me and has been put before our Chairman. He is quite prepared to fall in with the views expressed in it and wishes me to state that our Committee will supply the forms, coupons etc., needful to the Birmingham Bank.
 
I quite see that it will not be possible for Birmingham to adopt our coupons and we must have some struck specially for you. While on the subject, I should like to hear from you of what denominations you would wish them to use. Naturally, we should prefer that they would be of as few distinct values as possible.
 
I feel sure, from what you say, that Birmingham will do all that is in its power to further the object we have in view outside the scope of its own operations through its own Bank. I shall be glad to hear further from you on the subject and am,
 
Yours faithfully,
 
R H Fox
 
The method that actually evolved following the formulation of the Bank's Rule 8 detailed above, was described by J P Hilton in his book, Britain's First Municipal Savings Bank in a Chapter entitled The Coupon Method of Saving. That Chapter's straightforward description of how the system worked gave few hints relating to any problems encountered, except for the difficulty of cashiers "arriving at [a] balance owing to the waywardness of a coupon".
 
Although the basis of the originally introduced scheme was for a coupon card with twenty spaces to be filled with 1/- (One Shilling) coupons to produce savings of One Pound, an early report produced by the City Treasurer (in March 1916) had proposed values of 1/-, 2/-, 5/-, and 10/-. Once the Bank was established, it soon became necessary to produce coupons of a variety of values. Eventually, five values were used, from Sixpence to One Pound.
 
Some of the issues relating to the production and use of the coupons were discussed by the Bank's Management Committee at the following meetings:
 
September 28th 1916:
 
The Treasurer submitted his report:-
 
The Treasurer reports that he has received 100,000 Coupons of 1/-, value £5,000. He has distributed an instalment of the Coupons to the various Banks, as under, namely:-
 
 
 
 £
 Lloyds Bank Limited
 500
 London City & Midland Bank Ltd.
 500
 Barclay & Co. Limited
 300
 National Provincial Bank of England Limited
 300
 Capital & Counties Bank Limited
 50
 London County & Westminster Bank Limited
 50
 London & Provincial Bank Limited
 50
 Parr's Bank, Limited
 50
 Union of London & Smith's Bank Limited
 50
The Treasurer suggests that he be formally authorised to open accounts with these Banks, and to make the necessary arrangements with reference to advices, &c.
 
The Treasurer recommends the Committee to authorise the following procedure:-
 
In the case of employers not drawing their money to pay wages direct from a Joint Stock Bank, they may apply to the Head Office of the Savings Bank for a supply of Coupons, for which they would pay cash over the counter.
 
Before issuing the Coupons in such cases, it would be necessary for the employer to obtain application forms (Form A) from the Savings Bank. When these have been filled up and signed by the employee, the employer would be entitled to obtain the requisite Coupons as indicated above, but on first request being made by the employer for coupons under the provisions for this rule, the Application Forms (Form A) should be produced at the counter.
 
It is understood that if an employee cannot afford to contribute so much as one shilling per week, there is nothing in the rules to prevent the application being made fortnightly or monthly.
 
(The Committee resolved that the Treasurer be instructed to open accounts with the Banks named by him, also to make arrangements with Farrow's Bank and the Bank of England, who had not so far been approached.)
 
October 10th 1916:
The City Treasurer included the following in his report to the Committee, regarding Corporation employees:
 
In connection with the supply of coupons to officials of the Corporation who wish to open accounts with the Savings Bank, and whose salaries are paid by cheques, the Treasurer proposes that, after application forms from them have duly been filled up and signed, the officials in question may purchase from the Cashier in the Treasurer's Department the coupons they require. In the Education Department the whole of the salaries are payable in cash on presentation of forms of receipt at various Branches of Lloyds Bank, the Bank having been previously provided with lists of the amounts payable. In these cases it would be competent for the officials to obtain from the Bank coupons in part payment. The lists should be marked in such a way as to distinguish those officials who, having filled up application forms, are entitled to coupons, and those who are not entitled.
 
The Treasurer also reported that the amount received in respect of the sale of coupons and copies of the Bank's regulations, in the first trading period from September 29th to October 7th, was £302. 1s. 10d. This sum resulted in the following balances being held by the Joint Stock Banks:
 
 £sd
 Lloyds Bank Limited
 142 - 13 - 10 
 London City & Midland Bank Ltd.
 72 - 4 - 0 
 Barclay & Co. Limited
 76 - 1 - 0 
 National Provincial Bank of England Limited
 
 Bank of England
 
 Capital & Counties Bank Limited
3 - 0 
 London County & Westminster Bank Limited
 
 London & Provincial Bank Limited
1 - 0 - 0 
 Parr's Bank, Limited
9 - 4 - 0 
 Union of London & Smith's Bank Limited
16 - 0 
October 19th 1916:
 
The Manager having suggested that the Bank should supply strong envelopes to depositors to enable them to keep their coupon cards or passbooks in, the Treasurer made application to the National War Savings Committee for a supply of 5,000 envelopes, but was informed that the Treasury had vetoed the idea. Accordingly, the Treasurer reported that he had placed an order locally for the envelopes. The Treasurer also stated that 10,000 coupon cards that had been ordered were due for delivery on October 17th.
 
After sales of £302. 1s. 10d. in the period to October 7th, the Treasurer reported that balances held one week later were now £704. 15s. 10d:
At the next meeting of the Management Committee, held on November 29th 1916, the Treasurer presented six weekly reports covering the period from October 14th to November 25th. These reports showed total sale of coupons as £10,557. 16s. 0d. Of this sum, the Bank had invested £9,900 with the National Debt Commissioners:
 - November 2nd: £3.000
 - November 9th: £1,500
 - November 16th: £2,100
 - November 23rd: £3,300
 
With regard to these investments, however, the Treasurer had received an 'unofficial' letter from a Mr G F Ansell, of the National Debt Office, pointing out that it would be convenient if future investments were made in multiples of £1,000, as the Commissioners employed the money to purchase Treasury Bills of £1,000 each.
 
At this date, the coupons were being sold with values of 1/- and 5/-, but with many employers having expressed a wish to have a supply of £1 coupons, 10,000 coupons of this higher value were ordered. The War Savings Committee were also asked to supply 10/- coupons, but declined to do so. In these first few weeks, the value of coupons received from the War Savings Committee was £50,025 (5/- value: £25,400; 1/- value: £24,625), but the quality of some of them was criticised by the Manager as being susceptible to forgery and that they were "very faulty indeed and considerable annoyance has been caused not only to employers and depositors, but also the Joint Stock Banks by the sticking together and consequent defacing of the coupons. The last supply of 1/- coupons were in a different shade of green to the previous supplies". As a consequence, an interview was held with officials of the War Savings Committee at which the officials stated that they were considering a means whereby a secret mark or watermark might be introduced to minimise the danger of counterfeiting. In June, the Manager was authorised to destroy faulty coupons to the value of £82. 16s. 0d.
 
 
Continued ....
 
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