jssisiVolVIIPartLIII_247254

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1878,] ' By Robert G oodbody, Esq. 247see no signs of it. Th e great excess of imp orts, as compared w ithexports, is confidently appealed to as an undoubted proof that it is;and it would not come within the scope of the paper to examine howth e national account is balance d. The state of the exchanges, how-ever, do ; and they show no signs of an unfavourable state of things.Two or three bad harvests, the shutting up of the Black Sea, com-bined with a good har ve st|in |th e States, have naturally stimulatedth e dem and for Am erican corn, ye t the exchange shows no signs ofgoing to a point w hich w ould cause gold to flow to New York. Bu t,it is said, we have been paying in bon ds, and so lessening our capi-tal. I do not believe it. The whole imp ort from Europe has notbeen so very large, and I believe we have imported almost as muchof A merican bonds from the continent as we have sent to New Y or k;and even if some have gone on balances, the indications now are thatAm erica will have to begin to exp ort g old; and every day, as th e re-ceipts of corn and cotton fall off, these indications may be expectedto increase. And in the m eantim e the re is no deman d for gold forth e contine nt, except for Germ any, against silver. This silver h asbeen going to India, w here we have been lending money. But, saythe alarmists, the reason tha t gold does not go to Pa ris is th at ther eis an increasing qua ntity of Fre nch money attracted here by the higherrates existing as compared with P aris . U p to last Ju ne or Ju lymoney was dearer in Paris than in London, and no doubt Englishmoney went to Paris, yet we never heard that that was a proof wewere getting richer. On th e contrary, we were the n told th at the casewas hopeless, for the French could afford to pay more for money fortrad e purposes th an we could. Now it is hopeless, because we paymore than the French do.I will not weary you further w ith such absurdities. The we althof any country depends on its people, where nature has done so muchas she has for England. H as any proof been given th at E nglish en-terprise, E nglish hon esty, En glish capacity has declined1? U ntil therehas, we may leave the national w ealth to take care of itself, convincedthat if we each do whatever we find to do with all our might, ourcountry will not be behind in the race for success, but will maintainthe proud position she has reached by centuries of toil.

IV. O n Banks and Banking in Ireland. By James Connolly, Esq.[ftead 25th June, 1878.]

I AM not aware that any paper has ever been read before the StatisticalSociety on this very imp ortant subject. This is, perhaps, not verysurprising. In fact pub lic bank s have gradually come into existenceone by one commencing in a very quiet w ay, w ith a comparativelysmall capital, and confining their operations in the first instance toone locality, such as Dublin or Belfast.In this way the Bank of Ireland was established, now nearly a


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248 Banks and Banking in Ireland, {July,century ago, b y an Ac t of the Irish Parliam ent, w ith a capital of60 0,00 0 late currency. I t commenced issuing notes to about th esame amou nt. Fro m the very commencement it did a quiet, steadybus ines s; bu t it did not extend its operations beyond D ub lin fornearly half a century.I n 1824, an Act of Par liam ent h aving been passed repealing certainlaws which prevented the establishment of joint-stock banks, theHibernian, Provincial, and Northern Banks came into existence;and the n the Ea nk of Ireland began to open branch banks in theprovinces.There are now no less tha n 409 bank ing establishments in Ire land.There are besides a large number of sub-offices, where business iscarried on weekly, and also, generally speaking, on fair days. In fine,I believe it is no exaggeration to say th at the re is scarcely a goodvillage in Irela nd unprovided with banking accomm odation. Theonly exceptions I know of to this are some of the suburban andwatering places in the neighbourhood of D ublin . Th e explanationto this seems to be, that the professional and business men residingin those places usually come into town every day, where they havetheir offices and business premises, and that they naturally also bankin th e city. ' I conclude from thi s, th at I believe I am justified insaying that no country is so well provided with banking accom-modation as this exce pting, perhaps, Engla nd and Scotland ; andnotw ithstanding occasional complaints which are sometimes heardto the contrary, I verily believe th at our ba nks are at least asliberal as those of any other coun try. In fine, ban ks in rural dis-tricts give farmers advances, to enable them to seed their lands andreap the ir crops, which man y persons would consider ridiculouslysmall. They even grant loans to labouring men to enable them toplan t their potatoes, and to assist them in tiding over the slackseason, wh en labour is scarce. How ever, it is very satisfactory to findthat all the joint-stock banks in the country are reaping the rewardof their public spirit and good man age m ent; and I find th at theyare all dividing amongst their shareholders dividends varying fromeight (as a minimum) to twenty per cent, on their paid-up capital.The aggregate capital, paid up, of the nine banks, amounts to6 ,80 0,0 00; the total reserve fund, to 2,7 00,0 00. N or should weoverlook the valuable privilege possessed by six of those banksofissuing notes. Assum ing their average circulation to be 7,0 00,0 00,and deducting two and a-half millions of bullion which the lawobliges them to hold, they will still have four and a-half millions forbanking purposes free of interest.Besides capital, reserve fund, and the privilege of issuing notes,the banks have also very valuable freehold and leasehold property,consisting of their bank premises, which, if valued one with anotherat only 2,000 each, would represent over 800,000.In a word, so highly are our banks looked to as safe investmentsfor capital, th at th e common quotation of the shares is from two an da-half to four-fold the amoun t of the paid up ca pi ta l; and theaggregate value of the m all round m ust be nearly, if not qu ite, three-. fold. A t all events, I th in k we may safely pu t down the total, in


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1878.] By James Connolly, Esq. 249rou nd numbers, as value for twe nty millions sterling. The averagetotal profits of the nine banks must considerably exceed one millionsterling, as I find they divide nearly that amount annually in divi-dends and bonuses, besides which, they carry large sums over to thereserve funds, which I believe have been exclusively formed in thatway.I think that I have now pretty well exhausted the banking statis-tics which are pub lic; bu t to my mind the most interesting and mostinstructive, and, statistically speaking, the most important bankingoperations lie concealed in the ban k ledgers. I h ere allude to th edaily, weekly, m onthty, and yearly receipts and paym ents ma dethrough the bank s. A nd here it may be well to prepare the readerfor a surprise. W e are so accustomed from infancy to have the pov ertyof th e country din ned into our ears, th at if we suddenly get a glimpseat the daily financial operations in the interior of our ban ks, we mayimagine we are dreaming, or are taking part in some Arabian tale.W orking to a certain extent in the dark, without the required sta-tistics, we must in the first place enquire who are the clients of thebanks.I t is a m atter of notoriety tha t all me rchants and wholesale traderskeep current accounts at their bankers, and that as a rule all theircash paym ents are made by mea ns of ch eq ue s; also, th at all theirlegitimate bills are usually made payable at their bankers. M erch antsand traders, likewise, generally send into their bankers, bills receivedby the m in the course of trade, for collection. M oreover, th ey ma keall remittances to distant places thro ugh their bank ers. The same isapplicable to the pecuniary transactions of all respectable shopkeepers.I t is almost needless for me to add th at all companies, such as railway,insurance, limited liability companies, etc., all have their bank ac-cou nts. The same applies to agents, brok ers, salesmasters, m illers,solicitors, and professional me n of all ki n d s: likewise to priva te gentle-men, graziers, and even farmers of the better class now have currentaccounts in ban ks. Ladies, tooeven ladies of small meansfindthe comfort and security of having their half-year's income securelylodged, instead of run nin g th e risk of ha ving their houses broke n intoand robbed. A nd here I may state an undo ubted an d very curiousfact wh ich I h eard on the best autho rity. Th e overwhelming ma-jority of the clients of the Royal Ba nk, K ingstow n, are ladies. This,I think, will surprise both the friends and opponents of the rights ofw om en; and shows tha t, in m atters financial at least, the y are silentlyasserting their emancipation. I n a word, " everybody " has now acurren t account in some ba nk . H ence I infer tha t almost alwayswhenever there is a pecuniary payment of any importance, there willbe at the very least one ba nk transa ction. I say at least one, becausesuch is the custom now of doing business thro ugh age nts I care no twhether they are called brokers, factors, salesmasters, auctioneers,land agents, or solicitorsthat one change of stock, property, or rner-chandise commonly involves two, three, or perhaps four different pay-ments through banks.One of the most important statistical facts I found relative to thecommercial activity of Ireland, is in Thorn's Directory, under the


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250 Banks and Banking in Ireland, [July,head of " Belfast." This informs us th at in the year 1866 th e imp ortsof that city were valued at 12,417,000 , and the exports at 11,9 15,0 00.Now Belfast is, as everyone know s, the most progressive city in Ire-land, and I find that Between the years 1862 and 1872 no less than17,000 new buildings were erected there. The city valuation wasincreased from 35 2,70 3 in 1866, to 5 03,6 86 in 1876. The popu-lation, too, increased from 150,000 in 1868, to 210,000 in 1876, orequivalent to forty per cent, in eight years. Vide Belfast Directory,So that it is very evident that the tide of prosperity continues to flow,although the staple manufacture has of late years been very dull.Now, supposing the whole of that trade of 24,000,000 to havebeen liquidated by means of cheques and bills passing through the* ban ks, it is very obvious that tha t immense sum represents bu t asmall portion of the financial operations of those estab lishm ents . Toexp lain my meaning, it is only necessary to observe th at for everygreat staple, whether it be a raw material or a manufactured articleof commerce, the re are always speculators who deal, or as many wouldsay, gamble in t h e m ; bu t, call it what you please, th e goods and rawmaterials pass throug h their hand s, often through many such unproduc-tive hands, and this involves as man y paym ents by cheques or by billspassing thro ugh the b ank s as there are sales. B ut independen t ofsuch jobb ing, wh ich appears inevitable in all m ercantile transactions,there are the legitimate sub-divisions of trade and manufacture, in-volving at least one financial a ction for each change of ha nd . Toillustrate this proposition, almost any article of commerce may betaken at random.As we are now alluding to the trad e of Belfast, we cannot do be tterth an see how tha t staple article of commerce and manufacture flax,passes from h and to han d. Th e foreign merch ant sends it to a con-signee, who probably disposes of it to a speculator, who, anticipatinga rise in the market, buy s up all he has th e m eans of securing. I tis by no means improb able t ha t th e la tter, as soon as he sees his way ofsecuring a fair return for his money, sells it to another jobber whom ay hav e idle money on han ds, or, wh at is still more probab le, goodcredit with his bank ers. The ne xt change very probably sends th eraw material to a spinn ing factory. I t th en passes on to a weavingfactory. This does no t exh aus t th e processes throug h wh ich th e nowpartially-manufactured article has to go. I t nex t passes to th e bleacher;and I believe there is another branch of linen manufacture, whichhow ever, is sometimes uni ted with- the latter , called th e finishing.The now completely manufactured linen is, I believe, usually sold toa wholesale merchant, called, if I m istake not, a warehouseman, whopasses it to retailers, or perhaps the freight merchant.Th is tedious deta il of th e stap le man ufacture of Belfast. I tho ug ht ne-cessary, least it mig ht be thoug ht th at m y conclusions were far-fetchedand exaggerated with respect to the financial operations of the banksin tha t city. B ut before going into th e latter it is necessary to takea general survey of th e commercial activity of th at place. I findth at sh ip-building, distilling, brewing, m illing (corn), foundry w orks,and above all the bu ilding trade, are in great activity and prosperity.Belfast, top, as the capital of the north, and the terminus of the


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1878.] By James Connolly, Esq. 251railway in th e n or th, sup plies a large district, far and wide , w ith th enecessaries and luxuries of life, which are only to he had in a largecity. Fin ally , Belfast is th e financial centre of the province, hav ingsix great banks there, three of which were founded in that city andhave their boards of directors there.Taking all these m atters into consideration, I th in k it is doing vio-lence to one's better judgment, in order to make my estimate of thefinancial action of the Belfast ban ks as moderate and unsen sational aspossible, if we conclude th at it m ust be a t th e very least equal to fourtimes Thorn's estimate of th e ann ual imports and exp orts in 1866, sincewhich the city has increased by 40 per cent. This would give in rou ndnum bers one hu nd red millions a-year as the annu al turn-ov er. Th issum, I fully admit, appears prodigious for one city of a small countrysupposed to be who lly pastoral and agricultural. B ut if we dividethis sum by six, the number of banks in Belfast, and again by 300,which is ab out the num ber of bank ing days in the year, we shall findthat it will only be necessary for each to turn over on an average,55,000 per day to exhau st the whole amo unt. No w I sub m it tha tthe sum last mentioned is a very small estimate as the limit to theoperations of a great bank in a commercial city of such importance.M y own private opinion is th at I have very greatly un derestim atedthe financial importance of the capital of the north; for I am sureth at any m erchant wou ld declare the impossibility of carrying on thetrade given by Thorn with the payments implied by my figures.Com pared to Belfast, D ub lin possesses many advan tages. If weadd to it the suburbs and watering places at the seaside, where thecitizens Teside, and which receive most of their supplies of all kindsfrom the trading establishments, shops, and markets of the cityinfact, by taking in the metropolitan police district, we shall have apopulation of over 300,000, or just double that of the former city in1868. The situation, too, is far more central, and may be describedas the terminus of all the Irish railways, and by far the most impor-tant port in the country, both for British and foreign trade; it islikewise th e chief po rt for passenger communication. M oreover, itis the seat of the law courts, and the head-quarters of the army andth e civil serv ice; and as th e residence of th e Viceregal cou rt, a largenum ber of the gen try reside here more or less perman ently. Dis til-ling, milling, brewing , prin ting, and foundry works are carried on veryextensively; and the annual tonnage of the port, which is rapidly in-creasing, is considerably more th an 1,000,000 ton s over th a t of Belfast,'and about double the tonnag e of Belfast in 1866. Th e building tradeis most flourishing both in the city and in the suburbs, and givesmost lucrative em ploym ent, directly and indirectly, to some thou sandsof persons. Finally, D ub lin is the financial as well as th e statecapital of Ireland, the seat of many public boards of directors, aswell as of the principal, I m ight perhaps say th e only stock exchangein t he country, w hich gives, I believe, a far greater stimulus to ban kingbusiness th an any other trad e or profession. La stly, there are no lessthan sixteen public and three private banks within the city.W it h all these facts before us, I cannot, I th in k, be accused ofmaking any exaggerated calculation, in estimating the annual bank


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252 Banks and Banking in Ireland, [July,action of Du blin as double tha t of Belfast. Th is would give a m ini-mum of 2 00 ,00 9,0 00 ; but, according to my private judgment, i twould be just as impossible to carry on the financial business of thecity within that sum of money(the reader will perceive that thiswas a slip of my pen we are here speaking of bank operations, nine -ten ths of w hich are carried on without any cash paym ents) vast as itundoubtedly is, as to limit th e b an k circulation of Belfast, in imagina-tion, to half that amount.Compared to Dublin and Belfast, the trade and commerce of theother cities are small3 bu t in th e aggregate, taking th em all togethersay thirt y towns, seventeen of which are seaportsthey undo ubtedlycarry on a large and flourishing trad e. M ost of them have mills,breweries, saw mills, foundries, tanneries, and other considerable in-dustries and manufactures, requiring much banking accommodation.I find that the aggregate tonnage of the seventeen ports mentioned,amounts to no less than 5,691,000, which represents nearly a millionand a quarter more than tha t of the port of D ub lin. M any of them,especially in Ulster, have spinning and weaving factories, and alsobleaching establishm ents. Those thi rty town s m ust have fully 100banks, wh ich a t the lowest calculation, I conceive, must tur n overat least 5 00 ,00 0 each, great and small. Of course for the ban ksof such town s as Limerick, Cork, Lon dond erry, etc., th is estimatewou ld be ridiculously low. This will amou nt to fifty millions forthe one hundred banks per annum . M y private impression is that50 per cent, might be safely added to that sum.We now come to what I suppose may be called the third class ofbanks, situated for the most pa rt in sma ll coun try town s. They areno less tha n 287 in num ber. M y idea w ith respect to them is, togive each a circulation of 150,000 per annum, amounting in all to4 3,5 00 ,00 0. I trust here again I have kep t well within the m ark.Thisw ould give a total circulation, for the4O 9bank s,of 393 ,500,00 0,or say 400,000,000.I thin k all this shows tha t the banks of this country are the me -dium s throug h w hich capital flows throug h every branch of trade andcom merce; and th at so far from hav ing produced an artificial scarcityof money , as we frequently hear alleged, the}7 on the contrary do morein the way of facilitating the transactions of business and industryof every description th an any other institution w hatever. And it isvery apparent that, though the banks are compelled, from the down-rig ht im possibility of finding suitable investm ents in this cou ntryfor the ir surplus capital, to send a portion of it over to London, t hefinancial capital of the world, to put it out at interest, still it cannotbe said that in so doing the country suffers any loss; on the contrary,it is very evident that unless they so acted, they could not afford topay even the small interest which they at present give on deposits.B ut even this latter course would be preferable to " locking up," as it istermed, their deposits in investments which cannot be realised withina short period, to meet engagements in case of a sudden crisis or runon the ban k. The locking up of capital has been, it is well know n,one of th e most fruitful causes of ba nk ing disasters in E nglan d and^ elsewhere. .But if we take a more enlarged Yiew of tb e m atter, we shall


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1878.] ' By James Connolly, Esq. 253see how utterly impossible it would be to carry on the financial oper-ations I have endeavoured to describe without the agency of banks.Nor should it be forgotten, those financial institutions, being in theenjoyment of the most unbounded credit, are able to carry on by farthe greater part of their banking business without having either toreceive or pay in gold or ba nk n otes. In fact, th e great phenom enonof modern ban king is credit, developed to an extent hith erto perfectlyunkn ow n. The rational conclusion to draw from this is, tha t thoug hthe banks send out of this country some millions for investment,which they can make no use of at homestill, so far from theircausing, by so doing, a scarcity of money in the country, they on thecontrary, by their wonderful credit, combined with the whole systemof banking, actually create what may be called an artificial plenty ofcapital.It will be seen that the popular theory, making the farmers thechief clients of th e ban ks, has not been adopted by me. Qu ite th econtrary. M y calculations all tended to prove tha t three-fourths ofth e ba nking business of th e country is done in some hund red andtwenty banks, situated in about thirty of the chief towns, where thefarmers' accounts, whether deposit or current, must, I should say,count for very little in comparison with those of the rest of the com-m un ity at large. I also remarked tha t, even in rural districts, thelargest and best customers of the banks were not of the farming class.The local man ufacturers, such as millers, brewers, distillers, ma ltste rs,and builders, together with the resident gentry, agents, solicitors,auctioneers, and shopkeepers, are the persons who keep the accountsmost prized by bankers. M y object in making those remarks was tocorrect wh at I consider a popular fallacy attributing all the wea lthand prosperity of the country to tha t doubtless most importan t branc hof the community, the working farmers.In conclusion, I natter myself that, whatever may be the short-comings of this essay, all the facts and figures quoted by me, tend,one more strongly than another, to prove to demonstration the onegreat fact which I have had all through before methe great impor-tance of a statis'tical paper, giving an authen tic account of the financialoperations of the public banks, and drawn up from official returnsfrom th e bank s. As there are only nine such companies in Ire land,and as they are all known to be in a highly flourishing state, it ap-pears to me th at, so far from havin g an yth ing to conceal, it wouldbe directly to their advantage to publish to the world the extent andthe nature of their transactions which are the causes of their pros-"perity. Hence, I conclude th at any mem ber of the Statistical Societyundertaking to procure the accounts I have mentioned, would be ina position to contribute a most interesting and impo rtant paper to th eSociety. If he could at th e same tim e procure a classification ofthe clientsI mean as to their numbers and professions, not forget-ting the number and supposed occupations of the lady clientshewould add greatly to the interest of his communication. A nothermost important item of bank statistics is that of remittances to andout of Ireland, distinguishing, if possible, commercial from privatetransactions. This, if obtained, would throw a great light on a sub-


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254 Banks and Banking in Ireland. [ject much spoken and written about, but of which there is no accu-'rate know ledge I allude to the absentee drain. I n m y opinion th isis much larger than is usually supposed.

V. Notice of some points in Irish A gricultura l Statistics.By James Connolly, Esq.[Read 25th June, 1878.]

I NOW wish to make a brief communication of a most important andinteresting discovery, if I may so call it, which I think I have madewith regard to agricultural statistics.In poring over Thorn's article on the latter, I noticed, to my greatsurprise, th at no m ention whatever is made of the ann ual wool clip.Seeing th at there are upward s of 4,500,000 sheep in the country, thevalue mu st be very considerable. In my opinion, it cannot on anaverage be less th an .1,500,000 at th e lowest. I may here observethat, owing to th e present universal dulness of trade, there is thisyear a very heavy fall in th e value of thi s article, as compared to theaverage of the lastsay eight or tenyears.But a still greater omission is that with regard to dairy farming.This may be said to be one of the great industries of the country.Thorn states that there are upwards of 1,500,000 milch cows in Ire-land. If we value the m at 1 3 each on an average, which I considerwould be a low estimate, we shall find th at the capital invested mu stbe 2 0,00 0,00 0, or thereabouts. Considering the dangerous natureof this stock, which is more liable to disease than any other, and con-sidering also the high rents for grass lands of the best quality, andthe expense of artificial feeding in winter, I conclude that a dairyfarmer could scarcely save himself, much less make a profit, unlesshis cows broug ht him in, one with another, 2 0 per annum at thevery least. Th is would make the enormous sum of 30 ,000 ,000 perannum.The only reference Thorn makes to wool, is by giving the annualexport of that article.Fo r dairy farming, he only gives the export of bu tter, b ut makes noallusion to the con sum ption of milk or butter in th e country, althou ghbo th are very largely consumed by the whole population, leaving bu ta comparatively small po rtion of th e latter for exportation . I amsensible to the fact that thirty millions is an enormous sum, especiallyif, as I believe, it has hit he rto been overlooked, to account for. I nfine, I am well aware th at the person advancing such a statementwill be heard with the greatest distrust.A ll thing s considered, I t h in k th e simplest way of proving th ecorrectness of my estimate is to take nothing into account but theaverage price of milk all over the country, and the average quantityproduced by cows throu gho ut the year. To this must be added thevalue of a calf. It is well known that a good cow will give, during

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