that the Irish circulation has attained since the year 1834, the earliest to which we can trace it, according to the statement in the appendix to the reports from the Select Committee of the House of Commons, 1841, on Banks of Issue. Since 1872 a fresh period of decline appears to have been entered upon, as the amount in 1873 was £7,076,895, and in 1874 had dropped to £6,767,692. These fluctuations in the Irish circulation have been contemporaneous with, and are probably in a great degree dependent on the great fluctuations which have taken place in the population of that island. The population of Ireland was

But while the population in Ireland has thus varied in amount, and while the fluctuations in the amount of notes in circulation have been so great between one year and another, it is a very remarkable fact that the fluctuations in the amount of notes in circulation between one portion of the year and another have continued to hold very nearly the same proportion to the average of each year throughout the whole period. Whether the amount of the notes issued in the aggregate has increased or diminished, whether the totals have been large or small, the circulation on an average has stood at its lowest in the months of July, August and September in each year, from that point has rapidly reached its maximum in November, thence gradually diminishing through December, January, and FebThe table at the end of this paper containing the averages for each month for the ten years 1845-1854, 1855-1864, 1865-1874, and for the thirty years, 1845-1874, shows the general course of these periodic fluctuations. They are due, as Mr. Gilbart observed, to the fact that Ireland is in the main an agricultural country. Hence the circulation indicates the activity or stagnation of the business of the country. Immediately before harvest the circulation is at its lowest. With the autumn requirements of the local business the circulation commences to expand, and gradually drops as the activity of trade diminishes again. Nothing can

ruary.

prove more exactly than this statement the truth of the axiom that where a note circulation is free and readily convertible into gold, it will conform invariably to the wants of the population who use it. The Irish circulation may be regarded as unlimited in amount, since through the provisions of the Act of 1845, the Irish banks are privileged to extend their issue as they may require it beyond the limits then fixed, provided that gold is held against the issue in excess of the limit, in the same manner as it is held by the Scotch banks. The circulation has also been readily convertible into gold. Hence no better proof can be given than the history of the Irish circulation affords, of the inability of any banks whose issue is so circumstanced, to force into the hands of the public one single note more than they actually require. The circulation of notes in the hands of the public in Ireland thus beyond question represents their actual wants, and has continued to do so, though, as will be seen by the table containing the average issue of the Irish banks in 1874, and the proportion of the actual to the authorised issue of each bank, some of the Irish banks were in that year below, and others largely beyond their authorised issue. The circulation of the Bank of Ireland averaged, in 1874, nearly a million below their authorised issue though it appears that the Munster Bank, the Hibernian Bank, and the Royal Bank, pay away, in the course of their business, the notes of the Bank of Ireland exactly in the same manner as the non-issuing banks in England make use of the notes of the Bank of England. The table which has just been mentioned contains, besides the authorised and the actual issue of every issuing bank in Ireland, the amount and the proportion of large and small notes in the circulation of each bank. By referring to this it will be seen that the composition of the Irish circulation in 1874 was as follows:

Notes under £5......£3,025,000 45 per cent. of total circulation. Do £5 and over 3,744,000 55

Comparing this with the Scotch circulation for the same period it appears that the proportion in that country was as follows:-

Notes under £5......£3,900,000 66 per cent. of total circulation.

Do. £ and over

Total circulation

The authorised

2,000,000 34

£5,900,000

limit to the circulation in Ireland is £6,354,494; in Scotland, £2,749,271. It thus appears that small notes play a more important part in Scotland than in Ireland, which is generally regarded as the poorer country of the two, and has certainly a far smaller amount of money deposited in its banks, whilst in both countries it is most likely that if this power of issuing small notes did not exist the circulation would be but little above, if indeed it reached, the limit fixed by the Act of 1845. The legislation governing the Irish circulation corresponds in the main to that governing the Scotch circulation. There are, however, some minor differences in details. Thus, license duty is only paid by the National Bank on the four depots in Dublin, Cork, Limerick, and Ballinasloe, at which it is compelled to hold gold, and the Bank of Ireland pays no license duty whatever. The stamp duty is 7s. per cent. on the note circulation, as in England, as against 8s. 4d. per cent. in Scotland. But the Irish banks, unlike the English banks, or those in Scotland, have, under the provisions of the Act of 1828, an Act extending to Ireland alone, to make their notes payable in gold at every branch. This enactment compels the banks, of course, to hold a larger amount of gold in readiness than they would otherwise do. The amount of the total liabilities of the National Bank were stated by Mr. Mills, in his evidence before the Select Committee of the House of Commons this year, to have been about £8,500,000, and the amount of coin, gold and silver, held on 20th February, 1875, to have been £834,019, something like 10 per cent. of the total liabilities. Mr. J. T. Bristow stated in giving his evidence that the average amount of the gold held by the Northern Bank of Ireland, the Belfast Bank, and the Ulster Bank, was £1,000,000, being from 11 to 12 per cent. of the total liabilities, deposits and circulation together of those banks. These figures form, of course, but a small proportion of the reserves of these banks

held in readiness against contingencies, but they represent in themselves very considerable amounts. They are, doubtless, in great measure due to the provisions of the Act of 1828, to which we have just referred, and they show how useful legislation may be when directed to the strengthening a note circulation in the hands of individual banks, instead of endeavouring to concentrate the whole of the note issues of the country on one central bank, which has been the aim of legislation in England during recent years.

There can be no doubt that the power of gathering deposits, which a judicious employment of a note circulation gives the banks making use of it, has been of much service to the banks in Ireland. Dr. W. Neilson Hancock, in his report of 31st August, 1875, on savings invested in Ireland, makes the following statement:

In connection with the figures showing the extraordinary growth of wealth in live stock since the census of 1841, it is important to compare the growth of invested savings in the same period.

"Taking the earliest returns of deposits in joint-stock banks in 1840, £5,568,000, and adding 10 per cent. for cash balances in other banks than the Bank of Ireland, not then included in the returns, we get £6,125,000.

"SAVINGS INVESTED IN IRELAND.

"This table indicates an extraordinary growth in savings invested of £28,791,000, from £39,315,000 in 1840 to £68,306,000 in 1875.

"Of this growth of savings, the increase of deposits and cash balances in the Irish joint-stock banks from £6,125,000 in 1840 to £31,815,000 in 1875, or of £25,690,000 is the most important figure.'

We cannot doubt that this large growth of banking deposits is greatly due to the power of the local circulation in promoting the accumulation of money in the hands of the banks. In Ireland, as in the carlier stages of banking in England, the fact that the publie has been accustomed to a local note circulation has attracted them to the banks which issued those notes. The credit thus obtained by the banks has been of vast advantage both to them and to the public at large.