The post office and its story an interesting account of the activities of a great government department

A depositor can also purchase an Immediate or Deferred Annuity through the Post Office Savings Bank, and payments are made to him at his local post office. He can insure his life, and his premiums are paid by deductions from his deposit account. But this cannot be said to be a prosperous business. The Post Office is at a disadvantage compared with more popular Industrial Insurance Societies because of its steady refusal to employ canvassers. Broadly speaking, these represent the chief advantages of an account in the Post Office Savings Bank, and the great principle which underlies the whole of the undertaking is that every transaction, in whatever corner of the United Kingdom it takes place, has to be registered at the Head Office in London. Every depositor's account is entered in a ledger, and the account must correspond exactly with his deposit book. The average cost to the Department of every transaction is now about 5d., and it will readily be seen that after payment of 2½ per cent. interest, and allowing for thousands of small deposits and withdrawals, there is not much room for profit to the Government out of the business. For the funds of the Savings Bank are invested in Consols, and the reduction in the rate of interest on Consols from 3 per cent. to 2¾ per cent. and again to 2½ per cent. has seriously affected its revenue-producing capacity. But previous to 1896 a different tale was annually told, and the total surplus up to that year amounted to £1,598,767. Then in the years immediately preceding the South African War, the price of Consols rose considerably above par, and the day of annual deficits began. A slight profit was again made in the years 1900-1902, but the rate of interest on Consols was then reduced to 2½ per cent., and there has been no appreciable recovery since. No Government seems inclined to make the obvious but unpopular move of reducing the interest allowed to depositors.