WORLD'S FIRST SAVINGS BANK
The Revd Henry Duncan opened the world’s first self-supporting savings bank in Ruthwell, Dumfriesshire. He aimed to persuade his poorer parishioners to save for times of ill-health and old age.
This savings bank differed from those that had gone before. It was based on business principles, rather than relying on charitable donations. Interest was paid on deposits, and there were bonuses for regular savers. However, savers who made irregular deposits were fined, and no withdrawals could be made without the approval of the trustees. Duncan’s savings bank model soon spread across Scotland, and into England and Wales.
1815 LLOYDS TSB
SCOTTISH WIDOWS FOUNDED
The 'Scottish Widows' Fund', Scotland's oldest life assurance office, officially opened for business in January 1815. It went on to become the largest mutual life office in the UK.
Originally proposed in 1811 as a fund for 'widows, sisters and other females' in Scotland, its remit quickly expanded. Instead it was to be 'a General Society, the benefit of which may be extended to all parts of the United Kingdom'. The Fund issued its first life policies in 1814, but for business reasons the directors named 2nd January 1815 as the official start date.
EXPLOSION OF GROWTH
The idea of the savings bank spread rapidly. Just eight years after Henry Duncan set up his bank, a staggering 465 had been opened across Britain.
These new savings banks followed Duncan’s original business model. They were set up by public-spirited individuals who took on the role of trustees. Having seen the success of savings banks elsewhere, they wished to bring the same benefits to the poor in their own communities. The trustees took on the expenses of opening the bank until it became self-supporting.
HIGHWAY ROBBERY AND THE BEEHIVE
The original symbol of Lloyds Bank was a beehive. It was introduced in 1822, following a highway robbery in which £4,002 of Taylors & Lloyds’ banknotes were stolen.
The notes were taken from a mail coach, en route from London to Birmingham. Their loss prompted the partners to make their banknotes more distinctive, so that they would be more easily recognised. The symbol of the beehive was chosen, for its connotations of thrift and industry. From that point on, it appeared on banknotes, furniture and stationery.
The Medical, Clerical and General Life Assurance Society, as it was originally known, was set up in 1824. It was aimed at the middle classes, in particular clergymen and medical practitioners.
The Society differed from other providers. It was prepared to offer life assurance to people in ill health, by adopting the revolutionary practice of 'rating up'. No fewer than nine doctors served on the Board. This gave the Society an expertise that rival companies lacked – the directors could predict life expectancy with far greater accuracy, and set their premiums accordingly.
Clerical Medical was acquired by the Halifax in 1996.
1826 BANK OF SCOTLAND
LAST DUEL IN SCOTLAND
On 23rd August 1826, the last duel in Scotland was fought at Cardenbarns, Kirkcaldy. The duellers were David Landale and his bank manager, George Morgan. The banker was killed.
Morgan was the Bank of Scotland agent (manager) at Kirkcaldy. He had challenged Landale, a customer, to a duel following a long-standing quarrel. When Morgan was killed, Landale stood trial for murder. He was acquitted on grounds of self-defence.
Happily, the Morgan-Landale feud was not perpetuated. Morgan's nephew (who later also served as the Bank's Kirkcaldy agent) married one of Landale's daughters.
1826 BANK OF SCOTLAND
SCOTTISH POUND NOTE SAVED!
In 1826, Sir Walter Scott lead a campaign to save the Scottish £1 note. Banknotes for under £5 had already been outlawed in England and Wales.
Large numbers of English provincial banks were failing and the Government blamed the proliferation of small notes. It planned to pass similar legislation in Scotland, where the £1 was widely used. There was an outcry. Scott led the protests, writing pamphlets under the name of 'Malachi Malagrowther'.
The campaign was a success and the proposal was dropped. For this reason, Scott's portrait appears on Bank of Scotland notes today.
1832 LLOYDS TSB
SCOTTISH WIDOWS GOES SOUTH
In 1832, facing increased competition in Scotland, Scottish Widows decided to expand south of the border. The Fund targeted 'places in England where an extensive Scotch connexion is known to exist'.
Scottish Widows already had a network of nine 'agencies' (branches) across Scotland, stretching from Kelso to Lerwick. Within three years of its decision to expand south, agencies were established in Bradford, Huddersfield, Liverpool, Manchester, Newcastle and London. The peaceful invasion of England was a success.
MURDER AT NEWCASTLE SAVINGS BANK
At two o'clock on a cold December morning in 1838, the fire engines were called to Newcastle Savings Bank. Inside, the bloody body of Joseph Millie, Assistant Actuary, was discovered.
Actuary Archibald Bolam was also found, alive but badly injured. At first glance, it appeared that a robbery had gone badly wrong. However, at the subsequent inquest, evidence suggested that Bolam had in fact murdered his colleague. He had then slit his own throat to deflect suspicion.
The actuary was eventually convicted of manslaughter and transported to Australia. The motive for his crime, however, was never uncovered.
THE PENNY BANK IS BORN
Penny banks were for people who couldn’t afford to join a regular savings bank. The first was set up in Greenock, Scotland, in 1847.
Most savings banks required a minimum deposit of £1. Penny banks, however, allowed customers to deposit as little as a one penny. Once they had saved a pound, an account would be opened at the parent savings bank. The idea quickly caught on, and penny banks were established up and down the country, in Sunday schools, schools, mechanics’ institutes, and social clubs.
LEEDS PERMANENT FOUNDED
‘The Permanent Second Leeds Benefit Building Society’ (later the Leeds Permanent) was founded in 1848. Within ten years, it was the largest building society in the world.
Like many industrial towns, Leeds had a rapidly expanding population and a chronic shortage of housing. Building societies were set up help remedy this. They provided people with funds to build or buy their own homes. The Leeds Permanent replaced an earlier 'terminating' society (i.e. one which closed once all its members were housed). It remained one of Britain's leading building societies until the merger with the Halifax, in 1995.
CHELTENHAM & GLOUCESTER ESTABLISHED
The Cheltenham & Gloucester Building Society was founded in 1850. For the first 20 years, it had no office of its own, but operated from the Belle Vue Hotel in Cheltenham.
The directors met at the hotel once a month to approve mortgages and accept investments. By the 1890s, the Society was ready to expand. It opened a branch office in Gloucester, and began a programme of acquiring smaller building societies. These acquisitions continued into the 20th century.
In 1995, Cheltenham & Gloucester was itself taken over by Lloyds Bank.
BUILDING SOCIETIES AND ELECTORAL REFORM
With the passing of The Great Reform Act in 1832, a number of building societies actively sought to extend the franchise, through the promotion of home ownership.
The Act extended the vote in boroughs to male householders who owned or rented property worth more than £10 a year. The Leeds Permanent was one of the building societies which sought to promote the right to vote. Its first annual report in 1850 records that 'upwards of sixty persons have been placed in a position to claim the franchise, if they think proper, by the aid of this Society alone.'