The Savings and Housing Bank Regulations, approved by HM Treasury on August 25th 1919 pursuant to the Birmingham Corporation Act of
1919, included Paragraph 16 as follows:
All moneys received from depositors (excepting such sums as from time to time shall necessarily
remain in the hands of the manager or branch superintendents to answer the exigencies of the bank) shall be paid over to the treasurer
of the bank and it shall be the care of the Corporation to see that so much thereof is not required to meet the demands of depositors
and to meet current liabilities is forthwith invested agreeably to the provisions of the Act or (if the Corporation think fit) is
placed on deposit with the Corporation at call or invested in such securities as the Corporation with the consent of the Treasury
'Investments' may be defined, therefore, as Bank Assets that are not being held in Cash; deposited with Other
Banks; Advanced to customers on Mortgage and other forms of loan; used to purchase Fixed Assets; or are Sundry Debtors. Broadly speaking,
Investments comprised Quoted Securities (issued by Government and Local Authorities); Unquoted Loans to Local Authorities; deposits
with the National Debt Commissioners; and funds placed with Birmingham Corporation. The amounts placed each year, in each of these
categories, is summarised at Investments - Table A
Subsequent amendments and consolidation of the Rules and Regulations continued
to reproduce (with minor amendments to the wording) the above requirement for Investments (now under Paragraph 71), except that the
Birmingham Municipal Bank Regulations, 1930, added a restriction when the last part was amended to read:
…. with the Corporation
at call, or invested in Government securities maturing at a date not later than twenty years from the date of investment.
BMB's published accounts provide no details regarding the maturity date of investments, until the Report and Statement of Accounts
for the period April 1st to November 20th 1976. These accounts were the first issued for the Bank's new status as a Trustee Savings
Bank, by which time the Investment Policy was regulated by the Trustee Savings Banks Act, 1976, as disclosed in a note to the Report:
investments made by the trustees are in Public Sector Debt and are subject to strict controls by Government. All are redeemable at
par on fixed dates and none have been invested for a longer period than allowed by statute or Government regulation. Subject to these
requirements the policy of the trustees is to maximise income from investments while maintaining ample liquidity to meet withdrawals
and improving the capital value of investments.
At November 20th 1976, the Total Book Value of Investments was £99,033,838, and
this sum was analysed in a schedule reproduced in the Report and Statement of Accounts - see Investments - Table B
published Accounts from 1920 to 1939 show that (with a few exceptions) all invested funds were placed with Birmingham Corporation.
Over this period, the amount invested in this manner grew to £25,864,033, and was described in the Balance Sheet as either 'Cash on
deposit with Corporation at Call' (1920 to 1934) or 'Cash on deposit with Corporation in accordance with the Regulations' (1935 to
1939). The exceptions to all Investments being with the Corporation were as follows:
1921 - Treasury Bills:
1922 - Treasury Bills: £248,897
1922 - 5¾% Exchequer Bonds: £813,153
(NOTE: the Accounts show that £800,000 worth of these bonds was held at March 31st 1922;
the following year's Accounts show a 'Profit on Sale of Investments' of £34,156, presumably as a result of selling this holding)
the deposit with the Corporation was 'at call', the Accounts reveal that a proportion of the funds was placed in Government Securities.
A note in the Accounts for the years 1924 to 1927, stated: 'The Corporation holds upwards of £3,500,000 British Government Securities'.
Details at Investments - Table C
From April 1st 1957, deposits taken into the new Number 2 Department (because of the tax concession
granted on the interest paid) were required to be placed with the National Debt Commissioners.
Investments in Quoted Securities (mainly
Government Stock) began on a regular basis in 1940 when 3% War Loan 1955/59 was purchased. This investment was pursuant to the Board's
policy of placing all surplus deposits with the Government for the duration of the War, as described in The Bank in World War II
However, the Market Value of the Quoted Securities was not disclosed until 1948 - see Investments - Table D
. Investment in Unquoted
Securities (generally issued by Local Authorities) commenced in 1967, and because of their excellent yields, rapidly grew as a source