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powered to enlarge its capital to £3,000,000; making the total advances £2,850,000, late Irish currency, equal to £2,630,769 48. 8d. sterling money of the United Kingdom of Great Britain and Ireland; on which by the Act 3 and 4 Vict. c. 75, the bank received an annuity from the Government of £115,384 12s. 4d. sterling, payable on the 5th of January and 5th of July in each year, redeemable upon six months' notice, to be given after January 1st, 1841, and after payment of the above-mentioned sums.
The Act farther recites that the above annuity of £115,384 128. 4d. has, with the consent of the said governor and company, been reduced to £92,076 188. 5d., being at the rate of 33 per cent. per annum on the capital sum of £2,630,769 48. 8d., which capital sum shall not be repaid until the expiration of six months' notice, to be given after January 1st, 1855; and that, during such term, the said governor and company shall manage the public debt free of all charge. The company is to continue a corporation, for the purpose of carrying on the business of banking, but not to have any exclusive privileges. The charter to continue until the expiration of twelve months' notice to be given and published in the “Dublin Gazette,” after January 1st, 1855, and upon repayment of the sums due from the Government to the bank.
The Act removes, from the 6th day of December, 1845, all restrictions upon banks having more than six partners issuing notes and carrying on business in Dublin and within fifty miles thereof. But no banker shall issue any larger amount of notes than the average amount he had in circulation during the year ending the 1st day of May, 1845 (which amount shall be certified by the Commissioners of Stamps), and the amount of gold and silver coin he may have in his hands, in the proportion of not more than one-fourth of silver to that of gold.
In case two banks should unite, the new bank to have the power of issue to the amount of both the united banks. Any bank may arrange with the Bank of Ireland to give up its issue, and in that case the Bank of Ireland may increase its issue to that amount. But the bank that thus contracts shall not afterwards resume its issue. All notes for a fractional part of a pound are prohibited. Each bank issuing notes is required to send to the Stamp Office weekly returns, stating the amount of notes in circulation on each Saturday, distinguishing those below £5; and also the amount of gold and silver coin held at each of the head offices or four principal places of issue in Ireland. And from these returns the Commissioners of Stamps and Taxes shall make a monthly return, which shall be published in the “Dublin Gazette.” This monthly average must not exceed the amount certified by the commissioners and the amount of gold and silver on hand.
All banks are required to send a list of their shareholders to the Stamp Office every year, between the 1st and the 15th of January, to be published in the “Dublin Gazette” before the 1st day of the succeeding March. All banks, whether they issue notes or not, are entitled to sue and be sued in the name of their public registered officer.
Upon the Act of 1845, for the regulation of banks in Ireland, we may observe:
1. The authorized issue is, like that of the banks of Scotland, the average amount of the year ending on the 1st day of May, 1845.
2. If any two banks unite, the new bank may issue to the amount of the circulation of both the united banks. Here the law is the same as that of Scotland, but different from that of England.
3. If any bank gives up its issue, and agrees to issue
Bank of Ireland notes, the Bank of Ireland may increase her authorized issue to the full amount of the issue of the bank whose notes are withdrawn. In England, the Bank of England can, in a similar case, issue only to the extent of two-thirds of the issue of the bank whose notes are withdrawn. There is no similar provision in the Act referring to Scotland.
4. Another difference may be noticed between Ireland and Scotland. All the notes issued at the branch banks in Scotland are payable only at the head office of the bank that issued them. In Ireland, by the Act 9 Geo. IV. 81, all notes must bear to be payable at the place or places where they have been issued or reissued. Hence the banks in Ireland must keep some gold at every branch, while the banks in Scotland need not have any gold except at the head office. In both countries, the banks must hold a stock of gold equal to the amount of notes in circulation beyond the authorized issue; and, according to the Act, this gold must be at the head office, or chief places of issue. The gold held at the branches, however necessary for business purposes, is not taken into account in the returns to the Stamp Office. The banks, indeed, return the whole amount of the gold in their possession ; and it is this which is published in the newspapers. But the amount held against the excess of authorized issue must be held at the chief office, or at four chief places of issue. In the Provincial Bank of Ireland these places are Cork, Limerick, Dublin, and Belfast.
The Bank of Ireland is a chartered bank, like the Bank of England. It is the Government bank. It issues notes and has branches in the principal towns throughout Ireland. It has now no exclusive privileges.
In tracing the history of banking, we may observe that most public banks have been formed, in the first instance,
under the protection of the Government of the State in which they were established. Such was the case with the Banks of Venice, Genoa, and Amsterdam; and such, too, was the case with the Banks of England, of Scotland, and of Ireland. The former were closely connected with the State, and may properly be called “State Banks ;" the latter had peculiar privileges bestowed by charter, and are usually called “ Chartered Banks.” These privileges may be divided into two classes, those which refer to the proprietors themselves, and those which refer to other parties. The privileges of the first class relate to the amount of capital, the form of government, the number of directors, and the mode of their nomination, the meeting of the proprietors, and the specification of the branches of business the banks are allowed to carry on. The privileges of the second class refer to the restricted liability of the shareholders, and the prohibition of other parties carrying on the same business.
If the charters granted to banking companies conferred only the first class of privileges, they would be liable to but little objection. In the infancy of commerce and of banking, the assistance of the Government may with propriety be granted to encourage the formation of institutions so eminently calculated to promote the public ad. vantage. But of what avail are prohibitory clauses? If no other persons are disposed to form similar institutions, then those prohibitions are a nullity. But if other parties are disposed to form similar companies, without the assistance of the Government, then why should the Govern. ment interfere at all? Why should they grant a charter to effect an object which can be effected without their assistance ?
In the charter first granted to the Bank of England in 1694, there was no prohibitory clause. But when the
charter was renewed in 1708, it was enacted that no other company formed of more than six persons should carry on the business of banking in England. The charter granted to the Bank of Scotland in 1695, contained the following prohibition :-"That for the period of twenty-one years from the 17th of July, 1695, it should not be lawful for any other persons to set up a distinct company or bank within the kingdom of Scotland." This privilege was not renewed after the expiration of the twenty-one years; and in the year 1727 a charter, without any prohibitions, was also granted to the Royal Bank of Scotland. In the year 1746 the British Linen Company was formed, and carried on the business of banking as a joint-stock company. Subsequently this bank also obtained a charter, but without any exclusive privilege. Hence Scotland has had the advantage of chartered banks, and joint-stock banks, and private banks, all working well together, without producing those effects which in this country have followed the prohibitory clauses of the charter of the Bank of England.
Both in its constitution and government the Bank of Ireland closely imitated the Bank of England; and it has produced in Ireland most of the advantages and evils which that establishment has produced in this country. It has supplied the country with a currency of undoubted solidity; it has supported public credit, it has granted facilities to trade, and it has assisted the financial operations of the Government. On the other hand its prohibitory clauses necessarily led to the formation of many private banks, whose failure was the cause of immense wretchedness to all classes of the population.
The charter of the Bank of Ireland contained a clause which prevented more than six persons forming themselves into a company to carry on the business of banking