This section is from the book "Banks And Banking", by H. T. Easton. Also available from Amazon: Banks and Banking.
Banking in Ireland resembles more the English system than the Scotch; because the monopoly of joint-stock banking was given to one institution, viz., the Bank of Ireland, which was formed ninety years after the Bank of England, viz., in 1783.
The Charter of this Bank prevented partnerships of more than six persons being formed in Ireland, and consequently there existed a large number of weak private banks. Many of the latter failed and had a prejudicial effect upon the trade of the country.
In the year 1824 the Bank of Ireland surrendered its monopoly of joint-stock banking beyond sixty-five miles of Dublin, but it was not until the year 1845 that all the restrictions upon banks having more than six partners were abolished. From 1845 any joint-stock bank could have offices in Dublin, but no new bank was allowed to issue bank notes.
The privilege of joint-stock banking was granted to the Bank of Ireland, because that institution lent its capital, viz., £680,000, to the Government, and in the year 1821 a further sum of £500,000 was lent. Thus the capital of that bank was increased to £1,180,000.
In the year 1825 an Act was passed for the purpose of assimilating the currency of Ireland with that of England. Prior to this date an English shilling was valued at 13d., and an English sovereign at £1 1s. 8d.
The Act of 1845 relating to Ireland was very similar to that relating to Scotland. In both countries no new banks were allowed to issue notes, and the existing banks were permitted to retain their £1 notes.
The banking institutions now in existence are-the Bank of Ireland, which is a chartered bank like the Bank of England. It is the Government bank, issues notes, and has numerous branches. The Provincial and National Banks have London offices and issue notes. The Hibernian Bank and the Royal Bank of Ireland do not issue notes.
At Belfast there are three joint-stock banks, viz., the Northern Bank, the Belfast Bank and the Ulster Bank. These three banks issue notes and have numerous branches.
At Cork there is the Minister Bank, which was established in 1865. There are two private banks, viz., Messrs. Guinness, Mahon & Co., and Messrs. Boyle, Low, Murray & Co. All the other private banks have disappeared, although the names of twenty-one appear in the Post Office London Directory for 1817.
The eleventh annual report of the Provincial Bank of Ireland for May, 1836, gives a good account of the progress of Irish banking: "To show the progress of competition it may be sufficient to state that prior to 1825, when the Act 6, George IV., c. 42, was passed, under which the Provincial Bank was established, the Bank of Ireland had no establishment out of Dublin; that in Dublin itself there were only four more-and these were private banks-and that in all Ireland there were no other than private banks, and those only in Belfast, Cork, Wexford and Mallow. From 1825 to 1834 banking offices in the chief cities and towns of Ireland had been gradually established by the Provincial Bank, the Northern Bank and the Belfast Bank, to the number of about fifty; while within the short space of the last two years the offices of joint-stock banks having resident managers or agents, beyond fifty miles from Dublin, added to the branches of the Bank of Ireland, have increased to upwards of one hundred and twenty, and appear to be daily augmenting in number. Besides which there are a variety of stations attended on market-days by non-resident agents on behalf of one or other of such banks."
The following table will show the increase in the number of offices: -
1851 | = 170 offices or 1 to every 38,300 inhabitants. |
1872 | = 365 „ „ 14,800 " |
1875 | = 404 „ „ 13,100 " |
1878 | = 409 „ „ 10,788 " |
1883 | = 542 (131 are sub-branches) 9,520 „ |
1895 | = 493 offices or 1 to every 9,543 ,, |
In 1877 no less than 39 new offices were opened. This shows that the Irish banks are giving every facility for the deposit of money.
It was impossible some years ago to state the amount of money lodged in all the Irish banks because some of them did not publish any balance sheet, but the following table shows the increase of the private balances in the Bank of Ireland, and the deposits of the Hibernian Bank, the National Bank, the Southern Bank, the Provincial Bank, the Royal Bank, and the Ulster Bank:-
£ | |
1840 | = 5,567,000 |
1846 | = 8,442,000 |
1852 | = 10,773,000 |
1855 | = 12,285,000 |
1860 | = 15,609,000 |
1865 | = 18,619,000 |
1866 | = 20,957,000 |
1867 | = 21,794,000 |
1868 | = 22,163,000 |
1869 | = 22,672,000 |
1870 | = 24,366,000 |
1871 | = 27,348,000 |
1874 | = 31,700,000 |
All the banks now publish balance sheets, the amount of deposits being £43,612,697.
The year of formation, the paid-up capital, the number of proprietors, and the number of offices of the Irish banks were as follows: -
Formed. | Offices. | Capital. | Proprietors. | 1872 Dividends. | |
Bank of Ireland . | 1783 | 50 | £ 2,769,230 | - | 11 |
Northern Banking Co. . | 1825 | 44 | 300,000 | 718 | 18 1/2 |
Hibernian Bank . | 1825 | 32 | 500,000 | 1380 | 10 |
Provincial Bk. of Ireland | 1825 | 44 | 540,000 | 2000 | 20 |
Belfast Banking Co. | 1827 | 36 | 250,000 | 648 | 36 |
National Bank | 1835 | 106 | 1,500,000 | 4000 | 8 |
Ulster Banking Co. | 1836 | 44 | 250,000 | 1020 | 18 |
Royal Bank of Ireland . | 1836 | 5 | 300,000 | 1350 | 12 |
Munster Bank, Limited | 1864 | 40 | 350,000 | 1163 | 8 |
The proportion of paid-up capital and reserve to liabilities of Irish banks in 1875 was larger than that of the English and Scotch banks: -
Purely London Banks. | London & Provincial Banks. | Purely Provincial Banks. | Scotch Banks. | Irish Banks. | |
Capital .... | 7.3 | 7.1 | 12.1 | 9.2 | 14.0 |
Reserve .... | 2.7 | 2.9 | 5.4 | 3.6 | 5.6 |
Total proprietors' funds. | 10.0 | 10.0 | 17.5 | 12.8 | 19.6 |
Money lodged . | 73.5 | 83.2 | 80.3 | 76.1 | 65.5 |
Note circulation | - | - | •9 | 6.2 | 14.9 |
Acceptances | 16.5 | 6.8 | 1.3 | 4.9 | - |
90.0 | 90 0 | 82.5 | 87.4 | 80.4 | |
Total . | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
The following table shows the present position of the Irish banks: -
Branches. | Capital Paid up. | |
£ | ||
Bank of Ireland . | 59 | 2,769,231 |
Belfast Banking Company . | 40 | 400,000 |
Hibernian Bank .... | 59 | 500,000 |
Munster Bank .... | 52 | 200,000 |
National Bank .... | 104 | 1,500,000 |
Branches. | Capital Paid up. | |
Northern Banking Company- | 51 | 450,000 |
Provincial Bank of Ireland | 60 | 540,000 |
Royal Bank | 7 | 300,000 |
Ulster Bank | 61 | 450,000 |
Their deposits amount to £43,612,697, against cash £10,642,482 and investments £17,644,605.
The banks of Ireland have not suffered so much from failures as the English and Scotch, and appear to be conducted on sound principles. Their business is steadily increasing, although not so rapidly as the English banks. The system of audit of the National Bank ought to be mentioned, because it is worthy of imitation. The shareholders appoint three of their number to inspect the books of the bank, and these can if necessary employ professional auditors to assist them in drawing up their statement. Thus three separate audits of accounts are brought before the shareholders at the annual meeting.
 
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