British banking experienced a number of failures in the period commencing 1860, and the Audit Report draws attention to one of these: the London Investment and Insurance Company, who had a branch in Birmingham. In addition to warning about investments that do not have the security backing of the Government, the Auditors continue their adverse comments on Gin Palaces and Beer Shops. Seven Post Offices in the suburbs of Birmingham now offer the facilities of the Post Office Savings Bank - despite the Government's promise that this new bank would only be opened in areas that did not have a savings bank. The AGM agrees to relax Rule 21 so as to reduce the period of notice for withdrawals over £5  from 14 to 7 days. The printed report of the Bank's AGM lists 60 'Trustees and Managers', and the Auditors draw attention to the fact that 10 or 12 of these gentlemen frequently attend the Bank during opening hours to assist with the taking of deposits and the payment of withdrawals.

 

 

The thirty-seventh Auditors' Report is the last to be produced for the Birmingham Savings Bank. As the two remaining Auditors (Edward Lucas and J T Horton) explain, one clause of the 1863 Savings Banks Act increased the liability of the Bank's Trustees, and many of the Trustees declined to take on this additional liability.

The provisions of Section II of the Act regarding the liability of trustees were simple and straightforward. A trustee would only be personally held liable if he failed to pay over moneys actually received by him on account of a savings bank; if he failed to take security from the officers entrusted with the receipt and payment of money; or if he failed to see that his bank complied with three of the fundamental rules and regulations set out in the Act. These were:

(1) that at least two persons must be present on all occasions of public business and be parties to every transaction of deposit and repayment;

(2) that an independent auditor must examine and certify the books at least twice a year;

(3) that the trustees and managers or committee of management must meet at least twice a year and keep minutes of their proceedings.

 

Certainly, these rules provided the basis of a system that would make a large scale defalcation very difficult, and it is hard to see what the objection of the trustees was. The result of their decision in 1864 was that Birmingham was without a savings bank of its own until the Birmingham Corporation Savings Bank commenced in 1916, and its successor, the Birmingham Municipal Bank (BMB) opened for business in 1919. In the meantime, the provisions of the 1863 Act stood the test of time, and were reflected in the Rules and Regulations of the BMB.

 

The Auditors' Report details the actions taken after the decision was made to close the Bank. Thus, after an existence of thirty-seven years, one of the UK's largest savings banks (8th as measure by total deposits) and probably the most efficient, closed.