IRISH BANKS The early history of banking in Ireland was marked by legis lation even less favourable to the formation of a steady and dependable system than in England, and in 1695 several of the principal merchants in Dublin met together for the purpose of forming a public bank for Ireland on the model of the Bank of England. For many years this proposal met with no favour. It was not till 1783 that the Bank of Ireland was established and commenced its business. The first governor was David La Touche, junior, and two other members of his family were amongst the first board of directors. The bank met with very great success, but the jealousy against rival establishments was extreme. By the Act forming the Bank of Ireland it was enacted that no com pany or society exceeding six in number, except the Bank of Ireland, should borrow or take up money on their bills or notes payable on demand. In the year 1821 the Act was so far modified as to permit the establishment of banking companies exceeding six in number at a distance of 5om. from Dublin. In 1824, in con sequence of the ambiguity of that Act, an Act had to be passed to explain it. It was not till 1845 that the restriction as to the 5om. limit was withdrawn.
The establishment of any other bank but the Bank of Ireland was for a long time hindered by the legislation on the subject. Some of the restrictions were so extraordinary that it will be interesting to refer to three of the more important acts.
1741, 15 Geo. II.—Partnership authorized for the purpose of trade and manufacture ; but such partnerships were not to exceed nine in number, nor was the capital stock of such co-partnership to exceed, at any time, the sum of I 10,00o.
1780-1781, 21 and 22 Geo. III.—"Anonymous Partnership act"—limited liability not to exceed L50,000, but "business of banking or discounters of money" expressly excluded.
33 Geo. II.—By this act a person while he continued a banker could not make a marriage settlement on a son or daughter, a grandson or granddaughter, so as to be good against his creditors, though for a valuable consideration, and though such creditors were not creditors at the time the grant was made. This act gave power to creditors over all conveyances by bankers affecting real estates; and all dispositions after May 10, 1760, by bankers of real or leasehold interest therein to or for children were made void as against creditors, though for valuable consideration and though not creditors at the time. No banker to issue notes or receipts bearing interest after May io, 176o.
The number of banks which failed in Ireland in earlier times was extraordinary; thus Sir Robert Peel in his speech of June 9, 1845, on the Bank Act of that year, made a quotation "from the report of the committee of Irish exchanges, which sat in 1804. At that period there were 5o registered banks, but they all failed, and their failures, I know personally, led to the most fearful distress." Since the legislation of 1845, however, the business has been carried on with equally extraordinary steadiness and success.
The earlier history of banking in Ireland pursued very closely the same process of development as in England. Circulation pre ceded and fed deposits. The credit which the banks obtained by the ready acceptance of their notes brought customers to their counters, and thus existing system, fortunate in excellent man agers, was built up gradually and surely.
Irish banks came in for their full share of the political troubles from 1916-23. Apart from the institution of the frontier between Northern Ireland and the Irish Free State, which created several new problems, many branch banks suffered damage in the dis turbance. For all that, progress has been made, and the banks have taken their share in the work of financial reconstruction following the inauguration of the Free State in 1922.
The "big five" have also extended their activities into Ireland. To quote one example, the Westminster Bank acquired the con trol of the Ulster Bank during the war.