to the appointment of a select committee of the House of Commons to make an inquiry. They reported that credit had suffered by the setting up of persons as bankers without sufficient capital, and recommended that bankers be required to register the real and personal estate which they proposed to hold as security for the payment of their liabilities, that the names of the issuing bankers be stated on banknotes, that bankers should not be permitted to trade as merchants, and that it should be made a felony without benefit of clergy for cashiers or clerks to embezzle money in excess of £50. The committee also recommended the cancellation of notes at the time of payment. These recommendations, except that regarding the registration of security, were embodied into law in 1755 (29 George II., c. 16). This act did not entirely revive credit and four important banking failures took place in 1758 and in 1760. The first was that of Clements, Malone, and Gore, a firm established on July 3, 1758, which closed its doors on November 1st, of the same year. This firm issued deposit notes payable to bearer on seven days' notice with interest at the rate of ten pence per week for every £100 (two and one-sixth per cent. per annum). The deposits obtained were larger than were expected and were invested largely in land, but the depositors soon began to demand repayment of their notes and as cash could not be obtained the firm was obliged to suspend. '

Three of the six large banking firms in Dublin suspended in 1760 and the others refused to discount bills and practically suspended business. Among the firms which remained solvent was that of Messrs. La Touche and Co., which began business in 1725 and survived as a banking house until its fusion with the Munster Bank in 1878. The financial condition of the country and the state of credit were in such a situation that a meeting of the merchants of Dublin was held in April, 1760, which made an appeal to Parliament for relief. A committee of inquiry was named by the House which reported on April 23, 1760, that the quantity of paper in circulation was insufficient to carry on trade and manufac

1 1 Dillon, 23.

tures, and recommended support for the three surviving banks to the amount of £50,000 each. This recommendation was adopted and the notes of these bankers were received as cash in the subscription for a loan which was then being raised. The failure of Sir George Colebrook, Bart., and Company, London bankers who had opened a branch in Dublin, in 1764, was the cause of another panic in 1770 which led the Lord Lieutenant and some of the gentry to issue a notice pledging themselves to receive the notes of the existing Dublin bankers without question.

The effort to found a strong joint stock bank began the year after the foundation of the Bank of England. A number of the principal merchants of Dublin held a meeting in 1695 and presented a memorial to the Irish House of Commons on September 17th, recommending the establishment "of a public bank or a fund of credit, for the encouragement of trade, and supply of the present want of money." The petition was referred to the committee on trade, but was never reported upon. The matter was revived in 1720 by Lord Abercorn, Lord Boyne, and others, who petitioned the King for authority to found a public bank with a capital of £500,000. The Lords Justices reported in favor of the scheme and the King authorized the Lord Lieutenant to grant a commission and charter. The consent of the House of Commons was required for a proper bill and the early stages were favorably passed. Charges of jobbery began to be made against the promoters of the bank, a rival scheme was started with a capital of £1,000,000, whose promoters were charged with paying £50,000 to members of the House as bribes, and the outcome was the passage of a resolution on December 9, 1721, "That the erecting or establishing a public bank in this Kingdom will be of the most dangerous and fatal consequence to his Majesty's service and the trade and liberties of this nation." Religious, political, and financial reasons influenced the action of the House, but a stronger reason was probably found in the infringement of the privilege of originating legislation, which they jealously guarded.

The plan of a public bank remained in abeyance until

1782, when Ireland obtained a new constitution, was freed from humiliating tariff restrictions and believed herself upon the threshold of a new era of prosperity. Mr. Eden, the Secretary to the Lord Lieutenant, presented the heads of a bill for a bank on February 27, 1782. Some opposition developed among the existing bankers and their friends in the House and when Mr. Eden called the bill up on March 5th, the opponents of the bank endeavored to secure an adjournment, but the motion was lost and the report of the committee was agreed to. The capital of the bank was fixed at 600,000 Irish pounds,' of which no person was to subscribe. more than £10,000, and which was to be lent to the government at four per cent. The charter was to run until January

I, 1794, and until twelve months' notice of withdrawal and the re-payment of all sums due the bank by the government. The bank began business June 23, 1783, and as early as October 31st, of the same year Mr. David La Touche, Jr., was able to inform the House of Commons that great advantages had resulted, particularly to the traders in linen. The first offices of the bank were in some old houses in Mary's Abbey, but after the union of Great Britain and Ireland in 1802, the directors of the bank purchased the Parliament house for £40,000. They remodelled it to meet their requirements and established the bank there in 1808. The meetings of the directors and shareholders are held in the old chamber of the Lords and the general office occupies the old House of Commons.

The new institution was known, in similar language to that establishing the Bank of England, as "The Governor and Company of the Bank of Ireland," and was not allowed

'The coinage of Ireland, although bearing the same names, differed from that of Great Britain. The English shilling was passed in Ireland for thirteen pence, although twelve Irish pence were equal to a shilling and twenty shillings to a pound. This made English coins worth about eight per cent. more than Irish coins of the same names and led to much confusion until the currencies were assimilated by the Act of 6 George IV., c. 79, making the currency of Great Britain that of the United Kingdom and providing for the interpretation of contracts in its terms.

to charge more than five per cent. interest on loans and discounts. If the bank incurred debts to a greater amount than its capital, the subscribers were answerable in their private capacity to the creditors in proportion to their subscriptions. The stock was to be transferable and to be deemed personal estate, and as such to go to the executors of the holders rather than their heirs. Fifteen directors were to be chosen annually, not more than two-thirds of the directors of the preceding year were to be re-elected, and the corporation was to have a governor and a deputy governor. The charter of the bank was renewed in 1791 and the capital increased to £1,000,000. Another increase of £500,000 was made in 1791, and still another increase of £1,000,000 was made in 1808 by 48 George III., c. 103. The charter was extended at this time until the expiration of twelve months' notice after January, 1837. The last increase of capital was made in 1820, when the total was fixed at £3,000,000 in Irish currency (equivalent to £2,769,231 in English currency). This last increase was taken from the surplus fund of the bank and lent to the government, making the aggregate loans to this date £2,630,769 in English currency. The total annuity paid the bank by the government was fixed at £115,384, which was reduced in 1845 to £92,076, or at the rate of three and a half per cent. on the English equivalent of the amount of the loan, and was further slightly reduced in 1892.

The suspension of cash payments in England in 1797 was extended to Ireland, without any apparent necessity, "for the sake of uniformity." Exchange was then in favor of Ireland, there was no special demand upon the Bank of Ireland and no drain of gold was feared. The effect of suspension, however, was to enormously stimulate the issue of notes, which increased from £621,917 in 1797 to £2,482,162 in 1800, £3,068,100 in 1809, £4,212,600 in 1813, and finally reached £5,182,600 in 1821 and £6,309,300 in 1825. Exchange turned against Ireland as early as 1804 and led to the special inquiry by the British Parliament which resulted in the formulation of the principles afterwards repeated with

greater elaboration in the Bullion Report. The evidence showed that silver had disappeared from circulation, even for subsidiary purposes, and been replaced by silver notes. Mr. Colville, a director of the Bank of Ireland, testified that there were in Ireland seven bankers issuing notes; 28 issuers of gold and silver notes, 62 issuers of silver notes; and 128 issuers of I. O. U's. The Bank of Ireland made large profits upon its forced circulation, and paid dividends never less than six and a half per cent. and rising in 1803 and 1805, including a bonus, to twelve and a half per cent. Exchange on London became favorable after a time, not because the value of Irish currency was raised, but because that of England had fallen to its level.

The substantial monopoly of joint stock banking by means of note issues was conferred upon the Bank of Ireland by the act of incorporation, which declared that it should "not be lawful for any body politic or corporate, erected or to be erected, other than the corporation thereby intended to be created and erected into a national bank, or for any other persons whatsoever united or to be united in covenant or partnership exceeding the number of six persons, to borrow, owe, or take up any sum or sums of money on their bills or notes payable at demand, or at any less time than six months from the borrowing thereof." This provision left it in the power of individuals and firms of small numbers to issue notes, and this privilege was availed of to a great extent after the suspension of cash payments. Nothwithstanding the worthless character of many of these institutions, the demand for currency was so imperative that large quantities of notes were easily floated and great distress occurred, after 1820, when the number of institutions outside the Bank of Ireland had been reduced to six. The Bank of Ireland was permitted by an Act of 1821 (chapter 27) to resume cash payments on June 1st of that year.

The absence of a proper circulating medium, in spite of the monopoly enjoyed by the Bank of Ireland, led to a pro

'MacLeod, Theory of Credit, II., 609.