"Rapid Growth of Municipal Bank"

Article by Councillor A H Cooper, Bank Chairman


(Originally published in the Birmingham Gazette's

Jubilee Supplement: May 2nd 1935)

Birmingham Municipal Bank

On the occasion of the Jubilee celebrations of his Majesty's accession to the Throne, and reviewing, apart from national prosperity, the remarkable development and progress of municipal undertakings in this great industrial city, a deserving place must be reserved for the Birmingham Municipal Bank, which though the youngest of Birmingham's municipal undertakings, has nevertheless a vigorous individuality of its own and has rendered a very real service to the cause of thrift.


The present Chancellor of the Exchequer, the Rt. Hon. Neville Chamberlain, conceived the idea in the early days of the War, that some thrift organisation which appealed to the workers, should be instituted in this city for the purpose of providing money for the use of the country and of assisting workers to build up a reserve against possible want during the inevitable industrial depression.


With the enthusiastic co-operation of employers and employees, a scheme was launched under the provisions of the Municipal Savings Bank (War Loan Investment) Act, 1916 and the Birmingham Corporation Savings Bank was opened in a small office in the Water Department on the 29th September, 1916. A whirlwind publicity campaign was conducted in factories, works, offices, etc; masters and men were alike enthusiastic, and although the system of saving was restricted to coupons being affixed to cards, the saving facilities offered were eagerly used and thoroughly appreciated by the public from the commencement.


The conditions of the Act provided that the Birmingham Corporation Savings Bank should be wound up within three months of the end of the War, but the fact that from the 29th September, 1916, until August 1919, the total sum of £603,319 had been received from 24,411 depositors proved that a more permanent thrift institution was required in this city.


The Committee of the Birmingham Corporation Savings Bank which had some valuable pioneer work, unanimously decided that the thrift organisation so successfully promoted and enthusiastically supported must not come to an end without very determined effort being made to secure powers for a permanent Municipal Bank in Birmingham.


Accordingly, clauses were included in an Omnibus Bill promoted by the Birmingham Corporation in 1919 authorising the establishment of a Municipal Bank on ordinary savings bank lines, free from most of the special restrictions of the Act of 1916, and with power to establish a housing department  to advance funds to depositors for the acquisition of dwelling houses within the city.


This Bill was successfully negotiated through the House of Commons and received the Royal Assent on August 15th, 1919. A Standing Committee of the City was constituted for the Bank, and on September 1st 1919, the Bank opened as a permanent institution with a small head office in the Council House, five daily branches, four alternate daily branches, and eight branches open on three evenings of the week.


After the passing of the Corporation's Bill, the next step was to invite depositors in the old bank to transfer their accounts to the Birmingham Municipal Bank, or alternatively withdraw their money. It was anticipated that many would transfer, but the number who did so far exceeded expectations. Of the 24,411 open accounts in the temporary bank, no less than 22,592 were voluntarily transferred to the permanent Bank. No greater proof of the confidence in the Bank could be shown than the high proportion of transferred accounts: the action of the depositors was a splendid testimony to the faith of the people in the Municipal Bank.


The difficulties of obtaining accommodation in the various districts were great and many of the old depositors will remember such places as a ticket office in the Green Lane Baths, a room in the Selly Oak Institute, a de-licensed public-house in Duddeston, and a watchman's shelter at Saltley, being used for the purpose of banking, but the business of the Bank has grown since that time and the temporary premises have gradually been exchanged for permanent buildings.


To say that the growth had been rapid would be no exaggeration, for at March 31st, 1935, there are the magnificent head offices at Broad-street, opened by HRH Prince George on November 27th, 1933, 52 daily branches and five evening branches. The amount standing to the credit of the depositors has reached the high figure of £18,925,000, and the number of depositors at this date was 393,000, which means that one in three of the total population of the City are depositors in what is called "Their Own Bank", and from September 1st, 1919 to March 31st, 1935, £66,211,019. 16s. 7d has been deposited.


One of the most important of the Bank's operations is a House Purchase Department through the medium of which citizens have been enabled to purchase their houses. The total amount of advances made up to March 31st, 1935 is £4,708,810 - and the outstanding indebtedness is now £1,535,303. 16s. 11d.   This volume of business has been transacted without loss in any case and no property has been left on the hands of the Bank.


The Bank has rendered valuable service to the citizens in acting as collecting agent for the Corporation in respect of gas, water, electricity and rate accounts. Any citizen who wishes to pay his municipal accounts at the branch which is nearest to his home and consequently this arrangement has saved time and postage, where under the old system these accounts had to be paid at various centres. At least 400,000 accounts were dealt with last year in this manner.


The new Head Office contains the latest type of Safe Deposit where the depositors can keep their deeds, documents and private papers in separate safes at a very moderate annual rental.


An institution such as this which handles more than 2,000,000 transactions per year, and has branches all over the city, is naturally a very important factor in the lives of the citizens to whom it belongs. There is no doubt that "Pride of Possession" has much to do with its continued popularity, and that many thousands of its citizens would have been unable to save in order to enjoy a holiday or may other comforts, had the Bank not been established.


From the time the first temporary Bank was opened in 1916 until the present, it has not cost the ratepayer one single penny, either for the purchase of land and buildings, new erections, equipment or management expenses.