Stories from the Vault: David's Story

The success of the Municipal Bank in Birmingham prompted other local authorities in the 1920s to wonder whether their citizens should also benefit from such an institution.

In Birmingham, the depositors were obtaining an above average rate of interest, the Corporation was able to borrow the Bank’s funds at a better rate than available on the market, mortgages were provided to house buyers on a system that rewarded borrowers who repaid ahead of schedule, and a network of branches enabled the citizens to easily pay their municipal bills for gas, electricity, water, etc.

But this was all taking place in an era when the British establishment was frightened by socialism and the perceived threat of a Bolshevik-style revolution, following the fallout of the First World War and the 1917 Russian revolution.

At the opening ceremony for Rotton Park branch in June 1923, Neville Chamberlain’s speech commented on the popularity of the Birmingham Municipal Bank. It stated that “the depositors feel a special confidence in the Bank”… due to the “connection with the Municipal system”… that gives “it special appeal to the working classes.

You may call it Socialism if you like; I have never been frightened by a name; I do not care whether it is Socialism or not so long as it is a good thing”.

And a good thing it was - not surprisingly for a city that had been celebrated as “the best-governed city in the world” and was a pioneer in municipal socialism. But the government did not agree that other municipalities should enjoy those benefits.

Establishing other Municipal Banks would probably have seen the demise of any Trustee Savings Bank in that locality – and the government would then lose the cheap funds provided there from.

So, the BMB was a unique institution, and it was the citizens of Birmingham who enjoyed its unique benefits, and I was proud to be part of it as a BMB employee from 1959 to 1979.