The note circulation of Ireland was finally settled by the Act of 1845. The authorised issue, like that of the Banks of Scotland, was to be the average amount of the year ending 1st May, 1845. If any two banks amalgamate the new institution may issue to the amount of the circulation of the united banks. If any bank voluntarily surrenders its right to issue, and agrees to issue Bank of Ireland notes, the Bank of Ireland may increase its authorised issue to the full amount of the issue of the bank which has surrendered its right of issue. This provision is quite different from the Act relating to Scotland.

In Ireland all notes must be payable at the place or places where they have been issued or reissued, whilst in Scotland notes issued at the branch office are payable only at the head office. The amount of gold held for the excess of the authorised issue in Ireland must be held at the chief office, or at four chief places of issue.

No new bank of issue can be formed. The issue of notes in Ireland was in private hands until the establishment of the Bank of Ireland in 1782 with a monopoly of banking, but an Act passed in 1821 allowed joint-stock banks to issue notes, provided they had no office in Dublin, or sixty-five miles beyond.

When the Act of 1845 was passed no private bank issued notes in Ireland.

The following table shows the increase in the note circulation of Ireland since 1844:

Average Circulation

The eight banks which issued notes were reduced to six by amalgamation, but the fixed issue remained the same, viz., £6,354,494.

The effect of the bad harvests in Ireland and also the social and political disturbances in that country is exemplified by the note circulation in recent years. Thus, comparing 1879 with 1878 there has been a fall of 13 per cent. If we compare the laws which regulate the English country note circulation with that regulating the Irish and Scotch circulation, we observe that £1 notes are only allowed to be issued in Scotland and Ireland. Again, Bank of England notes are not a legal tender for money either in Scotland or Ireland.

The English banks cannot exceed the limit fixed by the Act of 1845, whilst the Irish and Scotch banks can do so if they keep the excess of such issue in gold. The English banks make a return of their weekly amounts, whilst the Scotch and Irish banks return only a monthly amount of their notes in circulation.

In England, when two banks amalgamate, their right of issuing notes is forfeited. The following table shows the average note circulation of the banks in the United Kingdom:

Banks Of Issue In 1874

The Banking Act passed in 1879 allows the English joint-stock banks to protect their note issue by stating in the articles of association that the term limited liability does not apply to the note issue, and that shareholders will continue liable in respect of notes issued in the same mariner as an unlimited company.