Supporting customers in uniform

Customers serving in the military during the First World War needed special support from their banks.

Military pay agents

Running an army has always been a complicated business. Even before a soldier reaches the battlefield, enormous organisational and administrative challenges have to be met. Many have a financial aspect. Wages have to be paid; clothing and equipment procured and distributed; pension claims processed. In Britain in the 18th and 19th centuries, many of these duties were handled by civilian agents, who drew their income from commission paid by the government for undertaking such work.

As time went by, the agents started offering personal banking services to the army officers whose wages they handled. They gradually evolved into bankers who specialised in this specific group of customers. In 1892 the government fee for handling payments was abolished, after which army agents became wholly reliant on the banking aspect of their business.

Three pay agencies still existed at the start of the 20th century. One of them was Holt & Co, later to become part of RBS. It continues today as a specialist military banker, even though the pay agency system was finally abolished more than 40 years ago. 

For Holt's and the other military agencies, the First World War brought an unprecedented increase in workload. Unlike in earlier times, army officers no longer had to be clients of these firms, but the majority still preferred the specialised services they offered. The commissioning of many thousands of new officers into the army meant a parallel growth in the agents' customer lists. Holt & Co – not the biggest of the army agencies – saw its number of customers peak at 35,000 during the war, compared to just 1,600 three decades earlier. By the end of 1917 it took over 200 clerks to manage its pay work alone, compared to a total staff of 40 before the war.

The complexity of business increased, too. Customers were being posted overseas, often to dangerous places. Their financial needs could be unpredictable, and they needed to plan for the financial future of dependants. Opportunities to discuss these matters with their bankers face to face were severely limited; they might have only an hour or two as they passed through London on their way to or from leave. Many pay agencies recognised the problem and extended their opening hours to cater for them, in some cases opening seven days a week and cashing cheques around the clock – an unprecedented move in banking.

Ordinary soldiers

Banks with specialist links to the army or navy were the first to see their customers go on active service, but soon all banks had customers in this situation. Of course, many men – particularly in the ranks – did not have bank accounts, but some used their army wages to open accounts for the very first time. Our constituent Beckett & Co of Leeds received a letter from a man serving in the Royal Engineers: ‘Dear Sir, I am sending two money orders …for you to put in a deposit account for me. I don’t know naught about banks. I am a Leeds soldier fighting in Mesopotamia, but I have heard ‘em say yours is the best bank in Yorkshire, so I am sending my pay to you, hoping you will put it right for me, and you can send me a letter to let me know how to go on in future.’

Banks also provided services to American and other allied soldiers posted in Britain, paying out cash for army pay drafts, remitting money to loved ones at home, and even acting as a mail forwarding address. Posters and leaflets advertised the various services. They were provided, as London County & Westminster Bank explained to its staff, ‘not…as a means of profit, but for the convenience of the soldiers of our Allies.’  

Imprisoned or interned customers

The opportunities for spending money on active service were limited, but a major change came for those who were unfortunate enough to be taken prisoner. International law required nations to provide for prisoners of war, but in reality food and other necessities were often severely inadequate, and prisoners had to find ways to meet their own requirements. Most British prisoners depended on Red Cross parcels, but for the few who had bank facilities and could access them, chequebooks became another lifeline.

In 1918, the War Office became nervous about the number of British prisoners in Turkey who were buying provisions from local suppliers in return for personal cheques drawn on British bank accounts. The recipients of the cheques had no sure way of presenting them for payment, so many were holding on to them for extended periods, waiting for the end of the war, or a safe opportunity to process the cheque. The War Office feared that officers might write cheques far surpassing their account balances, or that accounts might have been closed by the time a cheque came in. It did not want officers’ payments to be dishonoured, so it contacted every bank in Britain, asking to be consulted whenever such circumstances arose.

The banks also had customers who were being held as internees in Holland and Switzerland. These countries were neutral, and international law decreed that combatants who ended up there had to be interned until the end of hostilities. Conditions for these men were much better than for prisoners, but still they suffered from boredom, and the extreme frustration of being out of action when their country needed them.

Internees had much more free communication with home, and indeed by the end of the war some were allowed to visit Britain on temporary leave. They still had free access to their bank accounts. Nevertheless, the government was reluctant to see British money spent abroad. It considered imposing a ceiling on what internees could withdraw from their bank accounts, but was reluctant to worsen their situation, or seem to be punishing them. Instead, it settled on a ‘voluntary limit’ of £25 a month, hoping to achieve its goal through moral pressure, rather than coercion. To make that pressure as strong as possible, the government required banks to submit weekly statements detailing the names of internees and how much money they were withdrawing.