establishments set up in England since 1844, that notes other than Bank of England notes are not issued at such offices ; and it is obvious that a Scotch or Irish banking company establishing a head office in London would be able to give it at once a large agency business, and would be able to feed it continuously with new connections owing to the flow of immigration from Scotland and Ireland to London. Accordingly, the directors of the National Bank of Ireland began to conduct the general business of bank ing at their head office in London in 1854, and they have subsequently set up seven or eight branches in the metro polis, each of which is understood to be the centre of much business. This example was so far followed, that the National Bank of Scotland started an office in London in 1864; the Bank of Scotland did the same in 1867; and the Royal Bank in 1874, having obtained a private Act for the purpose. The Clydesdale Bank also opened three branches in Cumberland in 1874. In consequence of this action Mr Goschen brought into Parliament a bill, the object of which was to disable Scotch banks from coming into England, as English joint-stock banks of issue are disabled from coming to London. The bill did not extend to Irish banks, as they were held too firmly settled in the metropolis to be expelled from it. Two arguments were advanced in favour of this measure : the first, that it was hard that Scotch banks should be permitted to do that which is denied to English joint-stock banks ; but it is an easy, and, as it would seem, a conclusive answer to this argument, that English joint-stock banks of issue should be freed from the disability now imposed upon them. Now that an increase in its issue is not a measure of profit to the Bank of England, there is no reason why these country banks of England should not be allowed to set up head offices in London, subject to the law for bidding the issue of their notes in London. The second argument iu favour of Mr Goschen s measure was, that something ought to be done to hasten that unification of issues which Sir Robert Peel contemplated ; and if the Scotch banks had come to Parliament asking for a liberty they did not possess, there would have been some plausi bility in this argument. It is to be feared that the whole strength of the support to Mr Goschen s bill sprang from the jealousy of the existing bankers of London of any intrusion into their domain. Unworthy as this source of opposition was, it prevailed so far as to cause the appoint ment of a Select Committee of the House of Commons to consider the law and practice of banking, and this Committee s report has just appeared as these sheets are
passing through the press (August 1875).
Banking in Ireland.
" In no country, perhaps," says Sir Henry Parnell, " has the issuing of paper money been carried to such an injurious excess as in Ireland. A national bank was established in 1783, with similar privileges to those of the Bank of England in respect to the restriction of more than six partners in a bank, and the injury that Ireland has sustained from the repeated failure of banks may be mainly attributed to this defective regulation. Had the trade of banking been left as free in Ireland as in Scotland, the want of paper money that would have arisen with the progress of trade would in all probability have been sup plied by joint-stock companies, supported with large capi tals and governed by wise and effectual rules.
"In 1797, when the Bank of England suspended its payments, the same privilege was extended to Ireland ; and after this period the issues of the Bank of Ireland were rapidly increased. In 1797 the amount of the notes of the Rank of Ireland in circulation was 621,917; in 1810 2,266,471 ; and in 1814, 2,986,999.
" These increased issues led to corresponding increased issues by the private banks, of which the number was fifty in 1804. The consequence of this increase of paper was its great depreciation ; the price of bullion and guineas arose to 10 per cent, above the mint price ; and the exchange with London became as high as 18 per cent., the par being 8J. This unfavourable exchange was afterwards corrected, not by any reduction in the issues of the Bank of Ireland, but by the depreciation of the British currency in the year 1810, when the exchange between London and Dublin settled again at about par.
" The loss that Ireland has sustained by the failure of banks may be described in a few words. It appears, by the Report of the Committee on Irish Exchanges in 1804, that there were, at that time, in Ireland fifty registered banks. Since that year a great many more have been established, but the whole have failed, one after the other, involving the country from time to time in immense distress, with the following exceptions First, a few that withdrew from business ; secondly, four banks in Dublin ; thirdly, three at Belfast ; and, lastly, one at Mallow. These eight banks, with the new Provincial Bank and the Bank of Ireland, are the only banks now (1827) existing in Ireland.
"In 1821, in consequence of eleven banks having failed nearly at the same time, in the preceding year, in the south of Ireland, Government succeeded in making an arrangement with the Bank of Ireland, by which joint- stock companies were allowed to be established at a distance of fifty miles (Irish) from Dublin, and the bank was permitted to increase its capital from 2i to 3 millions sterling. The Act 1 and 2 Geo. IV. c. 72, was founded on this agreement. But ministers having omitted to repeal in this Act various restrictions on the trade of banking that had been imposed by 33 Geo. II. c. 14, no new company was formed. In 1824 a party of merchants of Belfast, wishing to establish a joint-stock company, petitioned Parliament for the repeal of this Act of Geo. II.; and an Act was accordingly passed in that session, repealing some of its most objectionable restrictions (5 Geo. IV. c. 73).
" In consequence of this Act, the Northern Bank of Belfast was converted into a joint-stock company, with a (nominal) capital of 500,000, and commenced business on the 1st of January 1825. But the restrictions of 33 Geo. II., and certain provisions contained in the Acts 1 and 2 Geo, III., and 5 Geo. IV., obstructed its progress, and they found it necessary to apply to Government to remove them ; and a bill was accordingly introduced, which would have repealed all the obnoxious clauses of the 33 Geo. II., had it not been so altered in the committtee as to leave several of them in force. In 1825 the Provincial Bank of Ireland commenced business with a (nominal) capital of 2,000,000; and the Bank of Ireland has of late established branches in all the principal towns."[1]
which we have taken the foregoing extract, several joint- stock banking companies have been founded in Ireland. The Provincial Bank, to which Sir Henry alludes, has a paid up capital of 540,000, and has been well and profitably managed. But others have been less fortunate. The Agricultural and Commercial Bank of Ireland, estab lished in 1834, with 2170 partners, a paid up capital of 352,790, and many branches, stopped payment during the pressure in November 1836, and by doing so involved many persons in great distress. It appears to have been extremely ill-managed. The auditors appointed to examine into its affairs reported "Its book-keeping has been found to be so faulty, that ve are convinced no accurate
balance-sheet could at any time have been constructed."- ↑ Observatic-ns on Paper Money, &c., by Sir Henry Parnell, p. 171.
