5. The Act passed in 1844, for the regulation of jointstock banks in England,1 was extended in 1846 to Scotland and Ireland, with the omission of the clause that rendered the banks subject to the laws of bankruptcy. By a clause in these Acts, any bank for the formation of which prolings had been taken before the 6th May, and which was actually in business on the 4th of July, must at the end of a year after the passing of the Act either retire from business or take a charter. The Preston Banking Company was in this case, and accordingly became a chartered bank. Out of London this is the only bank that has a charter under the Act in England.

It was a special provision of this Act (Joint-Stock Banks Regulation Act) that no new joint-stock bank can be formed of a less nominal capital than 100,000, and half the capital must be paid up before the commencement of business; that the assets and liabilities of the company must be published once at least in every month; and that at least one-fourth of the directors shall retire yearly, and shall not be eligible for re-election for at least twelve calendar months.

That provision of the Act which requires one-fourth of the directors to retire annually, and which declares them ineligible for election for one year, has been the subject of much discussion. The object of the Legislature appears to have been to prevent those evils which, in public companies of every kind, occasionally arise from the undue ascendency of individual directors. Practically, it may be injurious or advantageous to a bank, according to circumstances. On the one hand, it may deprive a bank of the services of its most useful directors for one year.

1 This Act, as regards the three kingdoms, was repealed by Act 25 & 26 Vict. c. 89, § 205. The Act alluded to in the text was 7 & 8 Vict, c. 113, while what is usually called " The Bank Act of 1844 "( the object of which was simply to regulate the issues) was cap. 32.

And on their return, they may be less useful than heretofore, from being less acquainted with the transactions that have taken place during their absence. In small country banks it might not be easy to find other parties to take the places of the directors who had thus retired. On the other hand, it has been contended that the number of the directors, and consequently their influence, would thus be virtually increased-that, while on some occasions the most clever directors would be compelled to retire, at other times the least clever would retire, and their places might be better supplied-that the retirement of even the most clever might call forth the energies of the others, and thus the talents of the whole might be improved-that the plan tends to prevent the undue ascendency of any individual director, or of any knots or parties of directors, for any length of time-and that it is a convenient means of getting rid of an inefficient, injurious, or disagreeable director: for, when he is once out, it would be easy for the board, if so disposed, to prevent his re-election. By the charter of the Bank of Ireland, fifteen directors are chosen annually, and not above two-thirds of the directors of the preceding year can be re-elected.

6. There is another difference between Scotland and Ireland with reference to banking operations, though it does not arise from the above-mentioned Act. At the time of the union between England and Ireland, Ireland had her debts as well as England. And although England became liable for these debts, the dividends continued to be paid, and the transfers made in Dublin. Hence Government stock is bought and sold there in the same way as in London. Besides this, any party may purchase stock in Ireland, and have it transferred to England, or the reverse. The plan is this :-Any person holding stock may go to the Bank of England, either personally or by power of attorney, and get a ticket that will authorize him to have the same amount of stock put in to his name in Ireland. The stock in England is then transferred to the Commissioners for the Reduction of the National Debt. He may go to the Bank of Ireland in Dublin and reverse the operation. Several Acts of Parliament have been passed with reference to this subject. The last is the 25th Vict. c. 7, passed in the year 1862. When there is a great difference in the price of stocks in the two countries, operations of this kind may be very profitable.

This power of transferring Government stock from one country to the other has a tendency to equalize the price in both countries. It also serves the purpose of a medium of exchange. A transmission of stock has the same effect in rectifying the exchanges as a transmission of gold. And doubtless the exchanges between England and foreign countries might, to a great degree, be adjusted in the same manner.

There is a Stock Exchange in Dublin similar to that of London, established for the purchase and sale of Government stock, bank stock, railway shares, etc. No person can transact business there unless he has obtained a licence from the Lord Lieutenant. The number of these persons is at present about fifty-six. The borrowing and lending of money on stock are matters of daily occurrence. This is not always done through brokers. Individuals often effect these transactions directly with the banks. The general rule is that the lender shall have a margin of 5 per cent. on the value of the stock, and shall be entitled to call for additional security whenever the market price falls below that difference.

We have noticed the different meanings given to the word "circulation" in England, since the passing of the Act of 1844. By the Act of 1845, it is enacted that this

Due to it.


Due by it.

Bank of Ireland.

Provincial Bank.

National Bank.

Ulster Bank.

word shall have the following meaning in Scotland and Ireland:-

"Section 17.- And be it enacted, That all bank notes shall be deemed to be in circulation from the time the same shall have been issued from any banker, or any servant or agent of such banker, until the same shall have been actually returned to such banker, or some servant or agent of such banker."1