The plan of Post Office Savings Banks, already mentioned as having been brought before the public and the Government most prominently by Mr. Sikes, had, through the energetic efforts of Mr. Gladstone, been provided for, in the year 1860, by Act of Parliament. It was speedily brought into operation in England and Wales, and was extended early in the following year to Scotland and Ireland. As this new department was closely connected with the Money Order Office, its secretarial management devolved, in the ordinary course, on my brother; who, before proceeding to the work of organization, recommended that this should be based upon the contract system; a measure which would have been highly economical, but would obviously have involved the abandonment of patronage. This recommendation, however, did not find favour with the Postmaster-General, Lord Stanley of Alderley, and the department was soon afterwards transferred to Mr. Tilley. Together with this great measure of economy were rejected other means proposed by myself. In short, operation was made so expensive, that while a money order costs the department in issue or payment but three-halfpence, every transaction in the savings bank, whether of deposit or withdrawal, costs sevenpence.[220] The full evil of such increase in current expense will appear when it is considered what, under strictly economical management, these savings' banks might become. Their chief avowed object is, and most assuredly should be, to give the largest justifiable encouragement to popular thrift; and to this, as I conceive, every other aim should be completely subordinated. To this end it is important to induce, by all reasonable means, the greatest amount of deposit, but incomparably less important, if indeed at all desirable, to give more than reasonable facility for withdrawal. Certainly there is no just ground for extending and multiplying such facility at the expense of the department; especially seeing that the necessary consequence is a reduction in that rate of interest whose amount constitutes a main inducement to depositors; so that the effect is to mulct the steady depositors for the convenience of the more changeable. Had the Post Office been able to offer the same rate of interest as the old savings banks, its absolute security, combined with a reasonable and inexpensive increase of facility for the transaction of business, would not only have soon brought to it the whole actual amount of the savings bank business, but in all probability would have so extended that increase in thrift, which, with all defects, it has actually produced, as to make it correspond with the hopes of the most zealous advocates of the new scheme, and in particular of the benevolent gentleman in whose earnest suggestion it took its rise. Before the arrangements were finally adopted, I urged my views as to excess of expense and consequent prejudice to revenue, in an elaborate letter to the Postmaster-General.