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from the branches, for disposing of the bank's funds in London and Dublin, and for the discharge of all other duties implied in the exercise of a superintendence over the whole establishment, whether in Ireland or in London, the directors hold regular and daily meetings.'
“ Are the accounts which are sent from the branches accounts in detail of the whole of the operations of the bank ?-They are.
“ Are they, in fact, transcripts of the accounts of the bank from period to period ?—They are so; with this explanation regarding the current accounts of parties holding accounts with the bank, every particular draft or receipt is not sent to London, or rather the entries of these, I mean, are not copied or sent to London ; but there is this check on the operations of the branches, the exact balance of every man's account at the end of each week is given, and forms part of an abstract of the balance-sheet which is sent forward, and which must agree; therefore, if it were wrong, it would at once detect itself.
“ Then no variation can take place in the actual balance without the attention of the court being at once called to it?-None can.
“ And is the name of each individual to whom these advances are made from time to time brought under the special notice of the court of directors in London ?-Yes ; by the following process. The branches are divided amongst the directors, so many allotted to such a subcommittee, who take up the affairs of these branches each week in succession, and examine all the bills that have been discounted, the advances that have been made of any description, and the balance of each man's account, whether in his favour or against him.”
5.-The Inspection of Branches. “ Have you any system of inspection by which you are enabled from time to time to verify the correctness of the proceedings of the branches ?—We have. Besides having a half-yearly balance-sheet made out with all the details of the affairs of each branch at the time, and which is
scrupulously examined at London, there is an inspector (two at present) whose duty it is to go through the branches and to examine personally and verify every voucher and every particular, and to remain at the branch until they are fully satisfied that all is right.
"Are the visits of your inspectors at stated and known intervals, or is any branch at any one moment liable to the visit of an inspector, and to an immediate examination and verification of their accounts and bills and balances ?Every branch is so liable to be visited; there is no previous intimation given, except the visit be for some particular purpose which, by a representation from the branch, calls on the inspector to go.
“ As an additional security, have you yourself, or any of the directors, been accustomed to visit the branches, and to report thereon ?—I have myself every year, and sometimes oftener than once a year, even twice or three times in a year, gone to Ireland, and have gone through the whole branches, in fact, more than once, at different times; and on all occasions have made examinations which appear to me to be necessary; and besides that, the directors have in person repeatedly visited the branches ; deputations of the London directors, I mean, have so done.”
6.—The Declaration of a Dividend. “Will you explain to the committee what steps you take before you declare a dividend ?_We have regularly a balance every half-year; the dividend has only been declared once a year, at the termination of the year, which is in March ; our year ends in March. Prior to that period, each manager is directed to send up a special report of every obligation which is outstanding, or of any which is doubtful, describing particularly in the report every party to such obligation; that is preparatory to going further into the matter; then when the balance at the end of March is completed, a complete balance-sheet of every branch is made up and sent to the bank, with a more detailed report. A special committee of the directors is appointed to examine those, and they go minutely through them, and weigh every outstanding debt, and strike off everything that is considered to be irrecoverable; they then consider in what degree the reports of the managers represent every other outstanding debt to be recoverable, either in full or in part; and when all that has been done, they add generally a sum to cover still any possible omission, and it is only then that the fair profits of the year are considered to be ascertained.
“Can you inform the committee how far your calculations, your annual calculations of bad and doubtful debts, have or have not been below or above the mark ?-In many instances our allowances have exceeded what has turned out to be the real loss; for, as I mentioned before, the directors, in order to be more secure, have been in the practice of making an additional deduction over all the deductions made by the officers at the branches.
“ Have the proprietors any power under your deed of
settlement of naming any auditors, or having any examination of those accounts, so as to verify their fidelity ?-We have no auditors, but there is a provision in the deed of settlement by which a certain number of proprietors may call for a further investigation of the accounts, if they are dissatisfied.”
7.—The Causes of its Prosperity.
“Do you think there is anything peculiar in the construction of this bank which has insured its being correctly and well managed up to the present time, or that it has rather arisen from the happy accident’ of the directors who were selected having been honourable and correct men of business P-I conceive the very first and indispensable thing was an exceedingly respectable board of directors formed in the first instance, and which has always been maintained. In the next place, that the system of accounting that was adopted, and the check on the operations of the different branches, which has not been departed from, has most materially contributed to that good result. In the next place, there was an exceedingly good field for banking when we commenced, for Ireland was very destitute of good banks at the time, the Bank of Ireland operations having been confined only to Dublin. Therefore, from all those concurring circumstances, I conceive the prosperity of the bank has resulted.”
To these causes we may add one more, stated in the Report delivered by the directors to the proprietors in the year 1836,—the non-interference of the shareholders in the distribution of the profits :
“To this desirable position the affairs of the bank have been conducted, as the directors have great pleasure in acknowledging, by the uniform support and continued ap
probation of the proprietors, who, far from manifesting any impatient desire to participate in the reserved profits, have always relied with confidence on the opinion of those by whom the working of the establishment was superintended, feeling assured that whenever such participation was clearly expedient, it would not be withheld.”
Laws of the Currency in Ireland.–From what we have already said of the laws of the currency, those of our readers who are acquainted with Ireland will be able to judge beforehand of the revolutions of her circulation. Being purely an agricultural country, the lowest points will of course be in August or September, immediately before the harvest, and the commencement of the cattle and bacon trade. Then it rises rapidly, till it reaches its highest point in January, and then gradually declines. As an agricultural country, we should naturally expect that during the season of increase the circulation would expand most in the rural districts; and so we find that the circulation of the Bank of Ireland, in Dublin, expands very moderately—that of her branches, which are located chiefly in large towns, expands more—while the circulation of the joint-stock banks, which are located in the agricultural districts, receives the largest increase. Again, the purchases and sales of agricultural produce are known to be in small amounts; and hence the notes of the smallest denomination receive the largest relative increase. The annual changes of the Irish circulation are governed chiefly by the produce of the harvest, and the prices of agricultural products. These are the laws of the circulation of Ireland.
On this subject I may quote my own evidence before the Committee on Banks of Issue :
“I have told the Committee that I was formerly manager