July 19th, 1920 - JP Hilton to Neville Chamberlain
Dear Mr Chamberlain,
I was surprised to hear from Mr Hallas to-day that he had not received a copy of the Bank Report which is before the City Council to-morrow.
On enquiry at the Town Clerk's Department I find that they are only sent out to Members of the Council, and that being a co-opted Member, Mr Hallas had not received a copy. I presume thesame will have applied to yourself, and have taken steps to secure one so that you may have it for reference.
The question of the Bank'sposition has been very carefully gone into by Councillor Appleby and myself, and the figures we have decided to put through are such as we consider are correct and reasonable, with which opinion Mr Neal, the Auditor, is in agreement; in fact, Mr Neal would have gone a little further than my Chairman in the matter of carrying forward certain payments so as to reduce the amount shown as an excess of expenditure over income.
The whole of the expenditure relating to Parliamentary Bill Expenses and structural alterations has been carried forward to the Balance Sheet; but a good proportion of the repairs, decorations and adaptation of premises could quite correctly have been also carried forward so far as the first year is concerned. The same would apply to printing, stationery and advertising;and again, a portion of the Salaries and Wages which have been incurred in supervising the closing of the Old Bank might have been transferred also to that Bank instead of the Municipal Bank bearing the full cost. However, after careful consideration the Chairman decided that the figures as printed were such as he could justify, and he thought it better that they should be presented in the form they have been.
The position, I think you will agree, is very satisfactory; and there is every prospect of our being able to show at the end of next March a very pleasing result. I have made certain calculations at the chairman's request, which I think will easily demonstrate what is a fair expectation of the position at that date. If there are any details in connection with this matter you would like to have amplified, I shall be only too pleased to furnish you with such information as you may desire; but as founder of the Bank, I think you have every cause to be pleased with the result in both departments. There are thousands of people who have beenbrought into touch with the saving habit by means of the Municipal Bank who would, I fear, have been very little concerned had it not been for such a Bank being established; and so far as the Housing Department goes I am certain that numbers of the citizens would have been unable to purchase their houses had it not been for the setting up of such a department in the Bank.
J P Hilton
23rd July 1920 - Neville Chamberlain to J P Hilton
Dear Mr Hilton,
I duly received your letter of the 19th inst. with Council report and am greatly obliged to you for sending this on. You are quite right in supposing that I had not received a copy and as I have in no way lessened my interest in the bank's career, I am anxious to have all information as to its proceedings.
A consideration of the figures in the report gives me every cause for gratification and I think you must now feel that your boldness in accepting a temporary position during the war and your reliance upon my assurance that I intended it to be permanent if that could be possible, has been justified. There is no doubt that the bank is now firmly established and only last Saturday, a woman in my own constituency came specially to thank me for having started it and given herself and her children such splendid opportunity for thrift.
The calculations you have made as to the prospects for next year are most encouraging and without some unforeseen catastrophe I think a substantial surplus is assured. There are a number of details I should like to know more about but I must defer this until I can get down to see you which I hope to do during the autumn.
July 30th 1920 - J P Hilton to Neville Chamberlain
(NOTE: this letter was hand-written by J P Hilton - the original is reproduced separately)
Dear Mr Chamberlain
Your letter of the 23rd inst. has been sent to me at Llanfairfechan. I am glad you are pleased with the report, but am sorry the arrangements for sending information such as Council Reports has not been very carefully thought over by those whose duty it is to send them out.
I think so far as the Bank is concerned it would be nice if I gave you a monthly resume of the principal matters. It will be a real pleasure to do so and I should have asked your permission before had it not been for the fear of trespassing too much on your time. I can compress the matter into suitable reading.
I have previously said how gratified I was to serve you even in the temporary post I held and my only regret is that I see so little of you now. No one has felt the wrench of you taking up National responsibilities more than I have. It was a heavy blow, which is lightened somewhat by the interest you are good enough to still take in the Bank and myself. I shall always value most dearly my close association with you and watch your career. May it out shine that of your illustrious father!
The incident of the lady in your constituency appreciating the bank is one of a great many I assure you and I am glad you got it first hand.
I shall be delighted to see you any time and to go further into any matters you make like to discuss. Meanwhile I have given instructions for certain information to be got out on the Housing side which will I think answer your queries. As soon as I get it I will send it on. I do not fear the result of next year's balance sheet at all. Unless there is a real catastrophe my estimate of surplus funds will be exceeded. The expenditure should not be higher than I gave you and the income is at its lowest. We ought to have considerably more in interest with money at its value today and I shall watch very closely the amounts credited to us. Mr Collins will I know do his best for us but unfortunately it is left sometimes to his staff who do not realise the importance of the Bank to the Corporation. This was shown in our last figures. As a result of my calculations on day to day balances with allowances for clearings I proved we were short by £1000 which after many interviews by Mr Appleby and myself with the Treasurer we were able to secure. The calculations in his office had not given us a clear 5% and that figure was what the Treasurer had promised. We got it put right however. The only fear I have of adverse effect on the Bank is the income tax question. We shall battle it diplomatically but I am afraid some cantankerous person will be writing to the press.
Our report and balances held for depositors' use will be in print shortly. I will send you a copy.
J P Hilton
August 4th 1920 - J P Hilton to Neville Chamberlain
Dear Mr Chamberlain,
With further reference to your letter of the 23rd ultimo.
I have had the first 800 applications for advances classified, to show the sort of person who is taking advantage of the Housing Department of the Bank, and the result is given on sheet "A" attached hereto.
These 800 applications have been in respect of advances varying as indicated on sheet "B" attached.
The case you site, of a man buying a house at £1,250 for £53 in cash, is interesting. Such a case with our Bank would work out, I think, as follows:-
Purchase Price £1,260
Less Subsidy 260
Borrowed from Bank 800
Leaving to be found by Borrower 200
At our former rate of interest, viz., 5%, for a loan of £800 for 20 years, the borrower would repay £40 of the loan per annum, or £3. 6. 8d. per month, and the interest charged would be £3. 6. 8d. for the first month, £3. 6. 5d. the second month, £3. 6. 1d. for the third month, and £3. 5.10d. the fourth month, decreasing each three months by 3d., 4d., and 3d. until paid off. For the first year he would, therefore, pay £40 principal and £39. 1. 8d. interest, the latter being reduced the following year by £2.
In the matter of ground rents it is difficult to fix a figure. In one case in Handsworth where the purchase price is £1,200, the ground rent is £6.15/-d; in another at Selly Oak, at the same purchase price, it is £12.12. 3d; while a house with a purchase price at £1,250 in Moseley, has a ground rent of £5. Another one at Kings Heath, at £1,350 purchase price, has a ground rent of £3.19/-d. I do not think one can attach any real importance, in calculations, to the purchase prices. Possession often means £200 to £250 over houses without possession; and as you know, land in Edgbaston and Moseley has a much higher value than in other parts of the City.
I agree with you in thinking that a house such as you describe is beyond the ordinary workman, and would only be purchasable by a person having an income of, say, £10 per week.
J P Hilton
August 9th 1920 - Neville Chamberlain to J P Hilton
Dear Mr Hilton,
Your letter of the 4th reached me on Saturday only having been delayed in the post.
The case I took gave a more favourable position of the borrower because instead of considering the £260 subsidy I took the special arrangement give to Public Utility Societies where the house is sold to the occupier. In this case the subsidy amounts to nearly £400 and leaves the buyer to find only £853 for a £1,250 house. The ground rent is not an important matter but I gather from your figures that my calculations were correct and that in such a case as I have mentioned the outgoings would be about £120 per annum with an annual reduction of something like £2.10.0. What I was wondering was whether you could give me the actual figures in the case of a typical house for which you have given advances from the Bank showing what the outgoings are likely to be on the part of the borrower.
You will see that this is not merely a matter of academic interest. It may be that the present period of full employment and high wages will not be permanent and that a good many may not be able to maintain a payment which forms a high proportion of their income and the Bank will have to foreclose and will have a good number of small houses on its hands.