{"id":19686,"date":"2022-10-30T19:48:04","date_gmt":"2022-10-30T19:48:04","guid":{"rendered":"https:\/\/legalblog.ie\/?p=19686"},"modified":"2024-01-27T19:36:44","modified_gmt":"2024-01-27T19:36:44","slug":"19686-2","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/19686-2\/","title":{"rendered":"Banking 1783-1900"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/19686-2\/#Bank_of_Ireland\" title=\"Bank of Ireland\">Bank of Ireland<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/19686-2\/#BoI_Preeminent_Role\" title=\"BoI Preeminent Role\">BoI Preeminent Role<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/19686-2\/#Early_19th_Century\" title=\"Early 19th Century\">Early 19th Century<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/19686-2\/#Joint_Stock_Banks\" title=\"Joint Stock Banks\">Joint Stock Banks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/19686-2\/#The_Main_Banks\" title=\"The Main Banks\">The Main Banks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/19686-2\/#Mid-Century_Developments\" title=\"Mid-Century Developments\">Mid-Century Developments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/19686-2\/#Savings_Banks\" title=\"Savings Banks\">Savings Banks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/19686-2\/#Late_19th_Century_to_Independence\" title=\"Late 19th Century to Independence\">Late 19th Century to Independence<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Bank_of_Ireland\"><\/span>Bank of Ireland<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The first national bank in Ireland, in effect a prototype Central Bank, was established in 1783 by the Irish parliament.\u00a0 This was the Bank of Ireland.\u00a0 It was entrusted with the management of the exchequer account.\u00a0 It issued the proceeds of its newly issued capital to the Irish exchequer.<\/p>\n<p>In the next 40 years, the Bank of Ireland had a predominant influence in Irish banking even though it had no branches outside Dublin until after the mid-1820s.\u00a0 It accounted for a major share of note issues, and it was the only large bank, i.e., with more than six shareholders, that could issue notes to the country.<\/p>\n<p>With the Union in 1800, the management of the financing of the state moved from Dublin to London.\u00a0 The Irish and British exchequers were amalgamated in 1817. Further \u00a0limitations are placed on it by \u00a0the Bankers Ireland Act 1825.<\/p>\n<p>The Bank of England became the lender of last resort for the whole of the United Kingdom including Ireland.\u00a0 The gold standard emerged internationally.<\/p>\n<p>Prior to the middle of 19th century Bank of Ireland acted in a limited way as a lender of last resort.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"BoI_Preeminent_Role\"><\/span>BoI Preeminent Role<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Bank of Ireland acted in a leadership fashion in establishing currency, note and check clearing arrangements between banks.\u00a0 It sought to preserve its dominant position in relation to the issue of currency notes which were confined to a 65 miles radius of Dublin after 1821.<\/p>\n<p>When the Bankers Ireland Act 1845 was passed the remaining privileges of the bank in relation to issue of notes in the Dublin region were removed.\u00a0 This allowed note issuing joint stock banks in existence at the time to issue their notes in the Dublin region.\u00a0 All note issuing banks could circulate their notes freely through the contrary after 1845. The 1845 Act sought to limit the increases in the circulation of private notes while increasing competition.<\/p>\n<p>The Bank of Ireland is granted the sole right to handle the government&#8217;s cash operations.\u00a0 A ceiling which had applied until \u00a0the mid-19th century of the interest they could charge of \u00a0five percent was abolished.<\/p>\n<p>In 1855, it sanctioned the use of overdraft and in 1864 it commenced paying interest on its deposits.\u00a0 It was also granted power to give credit secured by mortgage.<\/p>\n<p>By the time the Irish Free State was established, the bank could develop as a commercial bank and did not become nor was it destined to become a Central Bank for the State.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Early_19th_Century\"><\/span>Early 19th Century<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Irish banking followed banking in the United Kingdom closely after the Act of Union .\u00a0 Monetary and banking reforms after Napoleonic wars were extended to Ireland.\u00a0 The central position of the Bank of England was strengthened in the 1840s and Bank of Ireland was weakened<\/p>\n<p>Very few bank failures occurred and minimal losses to depositors occurred. Financial innovation proceeded through the 19th century.<\/p>\n<p>Clearing facilities were established for cheques\u00a0 Secured overdraft facilities were established. Currency notes in circulation increased to \u00a36.4 million \u00a0by 1845.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Joint_Stock_Banks\"><\/span>Joint Stock Banks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There were a number of legislative changes in the 1820 which facilitated the growth of joint stock banking. The joint stock banks were owned by wealthy shareholders with unlimited liability.\u00a0 This contrasted with single branch private banks which was limited to individuals with no more than six and began to be viewed as riskier.<\/p>\n<p>Legislation in the 1820s allowed joint stock banks issue currency outside of radius of 65 miles in Dublin.\u00a0 They were \u00a0also free to establish themselves in Dublin without issuing currency notes.\u00a0 In this way, they could compete with the Bank of Ireland.<\/p>\n<p>The Trustee Savings Banks were also introduced at that time.\u00a0 There was a banking crisis in the mid-1830, arising from the failure of the Agricultural and Commercial Bank of Ireland, although none of its depositors lost.<\/p>\n<p>Branch banks emerged in Ireland in the mid-1820s.\u00a0 The number of banks outside Dublin had fallen to ten in the severely depressed economic conditions.\u00a0\u00a0During the rest of the 19th century, bank branches penetrated \u00a0the country and became involved in the increased trade and business.\u00a0 Deposit enchasing facilities and cheques grew popularity.\u00a0 Up to 700 branches existed by the turn of the 20th century.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Main_Banks\"><\/span>The Main Banks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Between 1824 to 1836 seven successful joint stock banks were established many of which remain today. In the early period, banks were associated with particular religious persuasions.\u00a0 In the 19th century and until the middle of the 20th century, most banks were associated with a relatively small \u00a0group of society, wealthy landowners and more affluent \u00a0merchants.<\/p>\n<p>Three Presbyterian supported banks in Belfast, two in Dublin and two with head offices in London which concentrated on the rest of Leinster, Munster and Connaught.<\/p>\n<p>The first joint stock bank, the Northern Banking Company was established in 1825 in Belfast.\u00a0 By that stage, the Belfast is becoming a major economic centre and was growing significantly.\u00a0 The strong demand for banking facilities emerged.<\/p>\n<p>In the Dublin region, the Hibernian Bank was established in 1825 challenging the monopoly of Bank of Ireland.\u00a0 The Provincial Bank of Ireland was established the same year with \u00a0strong Scottish backing and a London head office.\u00a0 It played a major role in promoting competition.<\/p>\n<p>The Belfast Banking Company was established in 1825 and absorbed two remaining private banks that operated in the north of the country.<\/p>\n<p>In 1836, the National Bank was founded by Daniel O&#8217;Connell.\u00a0 It aimed to introduce banking more deeply into rural communities.\u00a0 The National Bank also established a significant presence in England amongst Irish communities as well as in the City of London.\u00a0 It was admitted to the London clearing banks committee in the 1850.<\/p>\n<p>The Royal Bank of Ireland with the support of the Quaker community was established in 1836 in the Dublin region.\u00a0 The Ulster Bank was established in 1836 with its head office in Belfast.\u00a0 Its objective was to compete with of the two northern east banks \u00a0and with the Bank of Ireland and Provincial Bank of Ireland which were also establishing themselves in Ulster.<\/p>\n<p>Ulster Bank moved south and established branches in Dublin and Sligo by the middle of the 19th century. \u00a0The Northern Banking Company opened its first Dublin branch in 1888 followed by the Belfast Banking Company in 1891.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mid-Century_Developments\"><\/span>Mid-Century Developments<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>By 1836, there were 130 branches throughout the country which is a ten-fold increase in the previous 10 years. The introduction of bank branches to towns provided banking services.<\/p>\n<p>In 1836, banks notes amounted to approximately \u00a35 million , while deposits are approximately four million .<\/p>\n<p>In 1845, the joint stock banks were given the right to issue their own notes in the whole country.\u00a0 Notes beyond \u00a36.4 million \u00a0were to be backed by gold or silver.\u00a0 This encouraged the growth of bank deposits and the circulation of sovereigns and Bank of England notes, rather than Irish bank note.<\/p>\n<p>Few joint stocks banks of significance were launched after 1836.\u00a0 The one exception was the Munster and Leinster Bank which was formed in 1885. Joint stock banks became incorporated between 1865 and 1869.\u00a0 Their shareholders could not avail of \u00a0limited liability until 1879.<\/p>\n<p>The Munster Bank was established in 1864 and expanded rapidly in the south of the country.\u00a0 It established a presence in Dublin in 1870.\u00a0 It was very exposed to the agricultural sector. The bank had a high level of lending to deposits and had to rely on Bank of Ireland for temporary assistance in 1885.<\/p>\n<p>It closed its doors and was ultimately led to the incorporation of a new bank head quartered in Cork, the Munster and Leinster Bank which took over the assets without loss to the depositors.\u00a0 The new bank was enthusiastically supported in the south of the country and grew significantly with a conservative lending policy.\u00a0 It established branches in Belfast in 1918.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Savings_Banks\"><\/span>Savings Banks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Savings Banks developed at the same period.\u00a0 In 1844, the Savings Banks Act removed the \u00a0liability of trustees and managers thereby shaking confidence. Some 25 Savings Bank closed in the 1840s and in 1848, three savings banks collapsed. A select committee of parliament enquired into frauds in the latter case and legislation in 1849 increased the responsibility of trustees and provided for auditors<\/p>\n<p>The post office savings bank was established in 1861 by statute.\u00a0 By 1885, it exceeded the deposit of the trustee savings banks.\u00a0 All deposits were invested in government paper until the 1930s when steps were taken to convert the foreign assets into Irish government securities.<\/p>\n<p>A number of building societies were established in the period 1861 to 1883.\u00a0 They did not play a significant role until the 1960s due to the agricultural dominance.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Late_19th_Century_to_Independence\"><\/span>Late 19th Century to Independence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The basic structure of t banking remained unchanged from the 1880s. The number of branches doubled again in the 20 the years before the Irish Free State was established.<\/p>\n<p>Currency notes rose from \u00a36 million \u00a0to \u00a36 million \u00a0in the same period.\u00a0 Much of this occurred during the First World War when gold sovereigns were withdrawn.\u00a0 There was significant inflation during the First World War.<\/p>\n<p>Deposits of banks increased from \u00a343 million \u00a0to \u00a3180 million in the same period at the clearing banks. Savings banks deposits increased from \u00a37 million \u00a0to \u00a317.5 million<\/p>\n<p>The Dail established the National Land Bank in 1919.\u00a0 It was taken over by the Bank of Ireland in 1926 and became the National City Bank Limited.\u00a0 A major stake was purchased by Chase Manhattan Bank in 1968<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-19686\" data-postid=\"19686\" class=\"themify_builder_content themify_builder_content-19686 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Bank of Ireland The first national bank in Ireland, in effect a prototype Central Bank, was established in 1783 by the Irish parliament.\u00a0 This was the Bank of Ireland.\u00a0 It was entrusted with the management of the exchequer account.\u00a0 It issued the proceeds of its newly issued capital to the Irish exchequer. In the next [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[282],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19686"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=19686"}],"version-history":[{"count":8,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19686\/revisions"}],"predecessor-version":[{"id":31111,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/19686\/revisions\/31111"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=19686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=19686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=19686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}