THE BANK DIVIDENDS.
MR. LOWE, Tory on so many points, is proving, in his own department, the most Radical member of the Cabinet. He has not been nine months in office, yet already the entire stock of traditions and usages by which the business has been worked is floating—no longer upheld as things sacred and immovable, which it might produce unheard-of catastrophes to touch, and which are, therefore, to be handled with preternatural caution,—but viewed with equal eye and weighed in the same scales with any new arrangement which reasonable men can devise. The altera- tion in the collection of taxes—the great stroke of the Budget —was but a specimen of his manner, and was less significant, perhaps, than the spirit in which it was defended. When told that it would disturb existing usages in the Money Market, which the Government had always consulted, he denied that the usages were good, or that, whether good or bad, the Government were bound to consult them. This was to shift the view altogether, and put a system on its trial which had been practically above it. In the same way he has since attacked the ordinary English prejudice against £1 bank notes, and given deputation after depu- tation some lesson in political economy ; and now the public suddenly learns that one of the famous scenes in Thread- needle Street—the attendance of the Public Creditor to receive his dividends—is as good as abolished. Mr. Lowe has looked into the matter, sees no reason why the dividend warrants should not be sent by post if people wish it, like the similar warrants of joint-stock companies ; and the Bank Directors, with some wry faces, and as much resistance as enabled Mr. Lowe to let them see what might come of his turning their criticism of his plan against the system they defend, agree. This change itself we shall discuss presently, but what we are concerned with first is the revolutionary principle of Mr. Lowe's action. It is the exact contradictory of whatever is understood by conservatism. So far from clinging to anything with reverence or liking because one is used to it, Mr. Lowe is inclined to question it for that very reason, being rather offended with its presence as an obstacle to the free consideration of various methods and systems which might be tried, and which are probably just as good. If it cannot make a tolerable case, Mr. Lowe is angry and impatient to be rid of it, ready for any labour to pat matters on an intelligible footing—the man, in short, who must do radical work or none at all, though he has as little sympathy with the current formulea of the party as with their Conservative opposites. It is perhaps fortunate for himself that he is set to work in the money department of the State, where principles and results are definite, where the work to be done is the improvement of business arrangements and the economy of money. "Business is business," and though the national steward makes old servants uncomfort- able, disturbs nice arrangements, and causes a deal of grumb- ling, we can all see that he serves us well and puts money in our pockets, and we forgive him the dust he raises. There are other departments in which he could have had no such tangible results to protect him against his want of harmony with democratic sentiment, and the passions and hatreds which the thoroughness of his mind and his contempt for usage were continually arousing.
There are two points in the present change which ought, we think, to be observed. One is its extreme simplicity, which is apt to blind us to its merits. The whole thing seems to follow as the merest matter of coarse, from the first sentence in the correspondence,—its having been brought to Mr. Lowe's notice that "much greater facilities are given to the public by railway and other large mercantile companies in making pay- ments of dividends to their shareholders than are afforded by the Bank of England in conducting the payment of the dividends due to the public on account of the public debt." The case being thus put, it is immediately seen how stupid, unbusiness-like, and antiquated is the present system, which requires the personal attendence of the public creditor once a quarter, unless he gets paid through a "banker's list" in a way which cannot be convenient for every one. The quarterly scene of confusion at the Bank, which has become a part of national romance, hedged in with mystery, as if the payment of the dividends was a mysterious rite and the public creditors were compensated in dignity and honour for their disagreeable share in it, appears at once as little better than a piece of grotesque tomfoolery, strangely out of place in these days of " crossed " cheques and a minutely ramified banking system. Why bring old ladies and gentlemen and all sorts of unbusiness- like annuitants once or twice a year to the metropolis to make claims and receive warrants in one office of the Bank, and get paid in the "Rotunda," as the Bank Directors are so careful to remind Mr. Lowe, when they might get the money more cheaply, quickly, and easily at their own homes, and without any danger of loss from metropolitan sharpers or, may be, metropolitan dissipation ? Between this antiquated system and the plan of crossed warrants despatched by post, there is all the difference to be found between the roundabout practice of an uneducated man of business and the scientific expert of the modern time,—almost all the difference observable in another department between the savage who fights with arrows and the civilized man with his breech-loaders and rifle guns. The Bank's defence, moreover, was a piece of solemn nonsense—a mere shaking of many wise heads at the sacrilegious unveiling of their mysteries. They had no less than 240,000 accounts ; the making out of the warrants occupied 66 clerks about 25 working days each quarter (about teree or four minutes to each warrant, by the way, which does not seem very quick work) ; there were 5,429 Smiths, 2,478 Browns, and 2,190 Joneses in the Bank books ; 1,140 accounts were for dividends of less than Os. per half-year ; and so on through the other facts and figures of the mystery. It was only too easy for Mr. Lowe to say with a sneer that the number of the warrants did not make any difference, and that if so many names were alike, the addresses would be an addi- tional security against fraud or mistake. But it is just these obvious changes which do not occur to every one, while there are many men and ministers who would stand a little in awe of a business fetish, instead of taking real delight, as Mr. Lowe does, in breaking the spell. The proof of his merit is that the superstition has gone on so long unquestioned, and that it falls so easily before his victorious lance. Very likely the facts on which he acted were externally suggested to him, perhaps by a kindred mind more familiar with City business, but the promptness of action, and hard-hitting of prejudice, and ac- ceptance of responsibility are sufficient credit to Mr. Lowe, without its being supposed that he discovers all the notions on which he acts.
The second point we observe is the excellence of the motive which Mr. Lowe puts forward, which goes to the root of the entire change, though it may even seem far-fetched. Every inconvenience to which the public creditor is put, he says, "must be compensated by a corresponding reduction in the value of the funds, and every new facility devised by Joint- Stock Companies, and repudiated by the Bank of England, gives to these companies an advantage over the Government in the competition for public support." Thus it is the improve- ment of the public credit which Mr. Lowe seeks, and seeks exclusively ; and the motive is eminently characteristic, although it is really the best that can be put forward. The superficial notion on the subject would be that nothing is better than Consols, and if almost any other man had had the making of the change, we should probably have heard a good deal of the boon to the public per se, the matter being treated as one in which the Govern- ment should promote the interest of a large class of its sub- jects, provided it did not suffer anything itself. Such a reason would not have satisfied Mr. Lowe, who deals with the public creditor in a business manner, and offers him facilities with a view to the gain of the Exchequer. But it is plainly better to have such things so settled. One knows in real life how easy it is to get on with an intelligent man of business, who professes no sort. of friendship for you, but understands his interest, and settles things without give or take on either side from any other motive than one's own advantage ; how diffi- cult it is, on the other hand, if other motives are mixed up, and both sides at once pretend to be generous and to expect generosity. Mr. Lowe will be understood all the better for plainly stating the advantage to the State,—inconsiderable as it may at first sight seem. That it is really incon- siderable we are not at all sure. A security such as Consols cannot be too much popularized. The step which Mr. Lowe has taken will diffuse the knowledge and advantage of it indefinitely, certainly making it more available for small holders in distant parts of the country. The precise effect cannot be estimated, but, as he said of the abolition of the corn duty, we must burn all our books of political economy, if we have not faith. in theoretical results which we cannot easily trace in practice.
We are thus disposed to value somewhat highly Mr. Lowe's achievement, believing that the matter is not the only one
where he will set crooked things straight during his official term at the Exchequer. The correspondence shows him to be fully alive to other points in this very question of facilities to the public creditor, and prepared for other reforms. He has arranged, for instance, with the Bank for the better advertise- ment of stock certificates to bearer, which can be passed from hand to hand, as a mode of holding Government stock. Whether anything comes of this or not, the eye to business is manifest. In the same way, he proposed, at first, to arrange for dividends being payable at the branches of the Bank of England, though this change was superseded by the very excellence of his leading proposal to send warrants by post, which makes the divi- dends payable wherever there is a bank. And he cut the knot of some of the Bank's difficulties by directing the division of the dividend books into three parts—one for bankers' lists, as at present, another for those who wish their warrants sent by post, and a third for the old women who may yet wish to attend in person, and will, perhaps, adhere the ancient tradi- tion for a generation or two to come. Most important of all, however, is the suggestion not yet carried oat—that Ate dividends shall be paid quarterly instead of half-yearly. This facility will be very valuable in popularizing Consols. Annui- tants, above all things, want to have their money conveniently, while a quarter's anticipation of half their interest to cer- tain large dividend-takers will, though a small, still be an appreciable advantage. If we might suggest anything to one who knows so well what he is about as Mr. Lowe, it would be to permit addresses to be registered for the de- spatch of dividend warrants of places beyond the United King- dom. The postage would be a difficulty, perhaps ; but it is only one of detail, and we can see no other. All over the Continent there are English residents more or less likely to be holders of Consols, who would find a warrant for a public-debt dividend a very negotiable and convenient docu- ment. Why should they not have the same facilities as if they were in the United Kingdom ? More than this, we be- lieve that a great many foreigners would only be too glad for security's sake to invest in English Consols, and it would be wise to give them the chance. The area of competition will be extended, and the credit of the security, marvellous as it is, will be yet more improved. The farther warrants are sent of course the more danger there is of loss and forgery, which the Bank professes to fear, but Bank of England notes go far afield without appreciable danger. The warrants besides would be many times safer, as they must be paid through a banker, will be returned at once for payment, and should be printed with all the precautions against forgery of an ordinary note.
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