Mr. Orr Ewing.

2849. Why did the Bank of England withdraw their opposition?-It was shown by our constitution, or deed of settlement, that we were entitled to bank in London, and that we had a legal right to establish ourselves here, and eventually the Bank of England yielded.

2850. Is that special to your bank?-It is special to us, because it was provided for in our deed of settlement.

2851. Was that a charter?-No, there were several Acts recited in our deed of settlement which Mr. Tatham referred to, and as it was originally intended to bank in England, and the objects of the society were set forth in the deed of settlement, it was held that we were legally entitled to start in business here.

2852. But that deed of settlement is a private document of your own, is it not?—Yes.

2853. And it could therefore give you no legal rights? It was admitted that we could come to London.

2854. You do not hold the opinion that you alone, of the Irish banks, had a right to come to London ?-No, we only know that we have the right.

Mr. Goschen.

2855. You only say that you have the right? -Yes.

Mr. William Shaw.

2856. Did you get into the Clearing House with the joint stock banks?-No, we were not admitted until the 19th of March 1859.

Mr. Goschen.

2857. Did the National Bank advance money in London previously?-They did for the purpose of holding reserves.

Sir Graham Montgomery.

sent, viz., 1,500,000 7.

2867. Where did you raise the greater part of that capital, in England or in Ireland ?-Principally in Ireland, but of course some was raised here.

2868. You raised your capital with a view of doing metropolitan and English business?—Yes, as well as Irish.

2869. What was the proportion that you added to your capital?-I think that it was originally 600,000 I., and then they doubled it, and they capitalised 300,000 7. more, making 1,500,000 7.

2870. So that you practically raised your capital from 600,000 7. to 1,500,000 7.?-Yes.

2871. Out of your total liabilities, I understood you to say that about 1,500,000l. was due to the metropolis ?—Yes.

2872. Has the result of your coming to London exceeded your expectations, or has it equalled your expectations, or has it fallen short of them? -I cannot say that it has. Since the crisis of

much in London.

2873. Then, does it not come to this; that you have to pay dividends to your shareholders on twice the amount of capital, while you have increased your business in London by only 1,500,000 l., compared to 7,000,000 7. ?-Yes. But the deposits in Ireland at that time were not as high as they are at the present time. The liabilities of the bank on deposit accounts have considerably increased in Ireland as well.

2874. Would you have felt it necessary, with a view to the increase of your Irish business, to have increased your capital, if you had not come to London ?-I think that if the bank had remained strictly an Irish bank it would not have increased its capital.

2875. It appears that you have doubled your capital, and that you have added, through the London business only, a comparatively small proportion to your former business; will you explain to the Committee in somewhat greater detail the result of the operation, and state whether it has been profitable or otherwise?I do not think that it has been profitable in that sense; that is to say, that our resources have not increased in such a proportion, that to work the business with a capital of 600,000 l., as before, we could pay so high a dividend now as we could then.

2876. But the accession of business in London has scarcely been equal to the obligation imposed

Mr. Mills.

Mr. Goschen-continued. upon you of paying dividends upon a much 3 June 1875. larger capital? That is the case.

2877. At the same time you have followed the prudent course of not attempting to push your business in London ?-We do not attempt to push our business in London, especially in the deposit line; we have never even put an advertisement in the papers.

2878. Is your business in London (if you have no objection to stating it) a semi-Irish business, or do you do a large English business?-At the commencement it was purely English, but since we opened the metropolitan branches, a good deal of the Irish element has been introduced through Irish connections.

2879. Through Irish connections in London? Yes, and of course through Irish people having friends in London and introducing them to us. 2880. When did you open your London branches, apart from the head office?-In 1862, I think, we commenced at Bayswater.

2881. Do other Irish banks of issue lend money out in London?-They do, and for the same purpose as ourselves; that is to say, for reserves.

2882. Do you look upon your London business as an adjunct to your Irish business which you conduct for the purpose of facilitating your Irish business, or is it a remunerative and profitable business in itself?-We think that it is profitable in itself; but at the same time it affords great facilities for carrying on our Irish business.

Mr. Goschen-continued.

2883. Would you contend that the fact of the National Bank having a note circulation in Ire land assists it in any way in developing business in London ?-Not in the least.

2884. Do you see any analogy between yourselves and the foreign colonial banks which have note issues abroad?-Simply this, the amount of note circulation abroad of the foreign and colonial banks is more than the whole of that of Ireland, and it is double that of Scotland.

2885. Do you know of any of those colonial banks which do business by means of cheques? -Not exactly through cheques; they do not open customers drawing accounts, but they advertise for deposits, and they do almost any branch of banking business, except opening customers' accounts.

2886. Is not the taking of deposits without the other adjunct of open accounts and cheques, and so forth, a business in which many other people might engage besides bankers?-No doubt; any public company, or any individual who had the credit might engage in such business.

2887. Therefore they touch your business in that portion of the business which is not special to banking?-Yes.

2888. But as real bankers who do business over the counter, and have drawing accounts and cheques, there are none of these foreign or colonial banks that you know of that compete with you? -I am not aware of any.

Sir John Lubbock.

2889. IT has been stated to the Committee that the Provincial Bank of Ireland have their head office and do banking business in London; that is not the case, is it?-They do not do banking business in London directly, they do it through agents.

2890. In your English business do you conform to the general course of English charges?Yes.

2891. As regards your Irish business, have you any general tariff of charges in Ireland like that of the Scotch banks?-No, not a general charge; it depends upon the locality and the expenses which we are at for doing business in that locality.

2892. But in each locality do the banks agree amongst themselves as to the charges to be made? -No, there is no direct understanding, it is a matter of option.

2893. As a matter of fact, are the charges, generally speaking, much the same?-Of course it finds its own level.

2894. And the allowances of interest, I suppose, are much the same ?-Much the same.

2895. I think the National Bank in London makes use of the country clearing for the collection of country debts?-Yes.

2896. When cheques are sent to your Irish branches by English banks, what commission do you charge for paying them?-One shilling per

2899. You stated that you circulated bullion upon the payment of wages. I presume that it is only half-sovereigns to make it easier counting out for you, than having a large sum in silver? Yes.

2900. Are sovereigns ever paid in wages?

Mr. Orr Ewing-continued. They generally use the 1 7. note when the amount is over a sovereign.

2901. And you do that, not for convenience, but because the people of Ireland prefer the bank note?-They prefer the bank note to the sovereign.

2902. You stated, did you not, that you did not compete with the English banks for deposits, or for English business?-No; that is to say, for deposits upon which we pay interest. We do not encourage deposits upon which we have to pay any interest. Mr. Sampson Lloyd. 2903. Is that in London?—Yes. Mr. Orr Ewing.

2904. And your reason for not doing so, is that the margin between what is paid for deposits in London and that which is charged for discounts or loans by bankers of any kind is so small that you consider it to be unprofitable?—We consider that it does not pay for the demand to employ it at once, and to employ it continuously and for the risk attending it.

2905. Are you aware that there are a great many very prosperous banks in London who conduct their business upon these principles which you seem to avoid?---That must depend upon the amount of balances that they have for which they pay no interest, and the profit upon the one is a set-off against the other.

2906. What is your dividend?-At present we pay 11 per cent.

2907. Do you know the London and Westminster Bank ?—Yes.

2908. Are you aware what dividend they pay? -Yes.

2909. What is it?-It has been as high as 22 per cent.

2910. Is that the highest?-I cannot remember exactly the highest now, but it certainly has been as high as that.

2911. Therefore they pay double what you pay?—Yes.

Mr. Orr Ewing-continued.

2912. Do they not conduct their business upon the principle of taking deposits to the largest extent that they possibly can, and lending them out to the public upon what you would consider to be a ruinous rate?-I would rather not offer an opinion upon that.

2913. Are you not aware that the London and Westminster Bank make their money entirely upon the margin between the deposits and the loans which they make to the public?--I should say not entirely. I should say that it is upon the credit of balances upon which they pay no interest. The deposits upon which they pay interest are only a matter of proportion.

2914. Do you wish to convey to the Committee the idea that any amount of deposit which they receive upon which they pay interest is not profitable to them?—No, I do not mean to say that it is not profitable; but it is a question of the amount of the profit.

2915. Can you state to the Committee what is the reason why what is good for the London and Westminster Bank would not be good for you? -I would rather not answer a question of the management of another bank.

2916. Are we to hold your reason to be that it is because the margin is so small that it does not leave profit, that you do not do that business?— That is what guides our directors.

2917. Your directors are of that opinion also? -Yes.

Mr. Mundella.

2918. You were asked if there was any fixed tariff or rate prevailing in Ireland by arrangement amongst the bankers; what was your answer to that?-As regards the charge for advance, there is no particular rate as a matter of understanding; of course there is the bank rate, but as regards the locality, we charge different

rates.

2919. But there is an active competition, is there not, in all parts of Ireland, as to the rates of banking?-Very active.

2920. And that of itself keeps the rate at the proper and reasonable market price; is that so?Yes, it finds its own level.

2921. You were asked whether your bank could not profitably employ deposits as well as the London and Westminster Bank; is not the answer to that that the directors do not care to extend their business in London at any risk; is it not from a Conservative feeling on the part of the directors?—Yes; it is the idea that they must act on the side of prudence.

2922. And for their large capital and deposits they find ample scope in Ireland; is not that so? -It is so.

2923. I noticed your answers the other day to some questions about Bank of Ireland notes; are Bank of Ireland notes a legal tender or not? They are not a legal tender in Ireland.

2924. Then the Bank of Ireland is simply a private company, the same as any other bank in Ireland ?-Yes, it is an ordinary trading institu

Mr. Mundella-continued.

2926. Did they state that in evidence before a Committee of this House?-They did.

2927. Upon what principle is the Bank of Ireland conducted; is it a limited bank or an unlimited bank?-Its capital is fully paid up, and there is no liability.

Mr. William Shaw.

2928. I suppose that we may infer from your evidence that your business in London, as banking business, does not pay?--No, you cannot infer that; I stated that the resources held in London were sufficient to make our London business a profitable one.

2929. You do not mean to say that your profit on a million and a half of money pays for your London business, do you?-Yes, if you consider the balances upon which we pay no interest.

2930. Do you find your London business of much use to your Irish business?-One tells upon the other; one is a facility to the other.

2931. Is it usual for you to do business for your Irish customers in London without charge?

That depends upon circumstances; for instance, some of our customers keep accounts in Ireland as well as in London, and when they keep double accounts in that way, we make a consideration and do not charge.

2932. But they must keep an account in London as well as in Ireland?That is the rule.

2933. Your rate varies in Ireland, I suppose, both for deposits and for charges?-Not for deposits; our rule is not to allow more than the Bank of Ireland and the Provincial Bank do on deposit.

2934. That is carried out, I suppose?-That is carried out. Mr. Kavanagh.

2935. I suppose your experience of matters in Ireland is very great, is it not?—I have been for many years in Ireland.

2936. Your experience in banking matters is not confined to London, is it?-No, it is not; I have been inspector in Ireland for some years.

2937. Do you say that you do not encourage deposits in Ireland upon which you have to pay interest?-No, in London.

2938. That evidence was confined solely to London ?-To London.

2939. Has your bank extended its branches much within the last 10 or 12 years ?-Since the year 1870, I think we have opened about 25 branches in Ireland.

2940. And the other banks in Ireland have done the same, have they not?-They have opened extensively also; the Bank of Ireland, and the Munster Bank.

2941. They have all extended their branches? -The Bank of Ireland and the Munster Bank much so; very but the others not so much so; I do not think that the Provincial Bank has opened a branch for the last five years.

2942. Do you consider that there is sufficient banking accommodation in Ireland, taking a general view of the whole country?—I think that the country is very fairly accommodated at present.

2943. You could not call it starved for want of banking accommodation ?—Not at all.

Mr. Backhouse-continued. first established under Act of Parliament, in 1781, I think, and afterwards by Charter.

2945. Are you aware that by the Act of 1821 the Bank of Ireland notes are a legal tender in respect of public revenue?-I am not; in order that I should be prepared to give a proper answer if I were asked a question of that kind, I called at the Bank of Ireland, in Dublin, last week, and I was informed that Bank of Ireland notes were not a legal tender under any circumstances.

2946. Are you aware that a case was decided on the Leinster Circuit, in which it was held that Bank of Ireland notes were a legal tender? —I am not.

2947. Then, in fact, all your information is what you have heard, and not from any absolute legal knowledge upon the point?-Excepting you take the evidence of the governor and deputy governor before the Select Committee of 1858.

2948. Do you know anything about the savings banks and post office savings banks in Ireland? Not excepting from what has been officially returned.

2949. Have their deposits increased very largely during the last 10 or 15 years?-According to Mr. Hancock's statistics, which are furnished to the Irish Government, the deposits in in trust and post office savings banks were 2,150,000 7. in the year 1864.

2950. What are they now?-In 1874 they were 2,911,000 7.

2951. You said, I think, that you allowed the same rate of interest upon deposits as the Bank of Ireland and the Provincial Bank ?-Yes.

2952. Do they vary their rate according to the rate charged by the Bank of England at all?-Yes, the Bank of Ireland marks the rate upon the change in the Bank of England rate, and then we follow and increase or decrease the rate as the case may be.

2953. What rates do you allow; what is your maximum and what is your minimum?-Generally from 1 to 2 per cent. under the Bank of Ireland rate. There is generally a difference of one-half per cent. between the Bank of Ireland rate and the Bank of England rate.

Mr. William Shaw.

2954. For discounts?-For discounts, of course. It all depends upon the Bank of Ireland; sometimes they allow within 1 per cent. of the bank rate, and sometimes within 2 per cent., but we adopt whatever, the Bank of Ireland rules as regards rates of interest on deposits.

Mr. Backhouse.

2955. You say that you do not encourage deposits in London because the rate allowed is so high? Yes, the margin of profit is so little and the risk so great.

2956. I suppose you are aware that at some of the meetings of the London banks during the last year, they have been grumbling at the difficulty of employing money profitably, when they were allowing so high a rate of interest?—I believe that that has been so.

2957. In your opinion, where such a high rate of interest is given, is it possible, without loss, to keep the large reserves which it is desirable in sound banking to keep?-I will not go so far as to say that it is impossible to do it without loss; but the margin of profit is so slender that it does

not pay.

2962. Do you or do you not, in order to keep your deposits together at times when the London market rate is excessively low, say 1 per cent., continue to give the farmers and other depositors a somewhat higher rate, say an average rate of 2 or 2 per cent.? We are altogether governed in Ireland in allowing the rates on deposits, by what the Bank of Ireland rules. According as money goes up in London the Bank of Ireland increases the rate, and as they go down they decrease it, but there is no average

rate.

2963. Supposing that you followed implicitly the Bank of England rate, sometimes you would be allowing only 1 per cent. on deposits when the Bank rate might be 2 or 2 per cent.: or do you not at those times, for the sake of keeping your depositors satisfied, allow a somewhat higher rate than those extremely low rates?-It would be only a question of one-half per cent.

Mr. William Shaw.

2964. When the Bank rate of discounting in England is 2 per cent., I do not think that you go so low?-We have gone as low as 1 per cent. upon deposits.

Mr. Sampson Lloyd.

2965. May not that be considered a reason, inasmuch as at some periods of the year you gave a somewhat higher rate than the market rate, why you should not go up in your allowance for deposits at other times quite as high as the Bank rate or 1 per cent. under the Bank rate?-Of course like other bankers we are governed by the price of money, because there is a large commercial business which we do in Ireland, for which we must follow the Bank rate.

2966. Then, in point of fact, you do not slavishly follow the Bank rate either to its maximum or its minimum?—No.

Sir John Lubbock.

2967. You were asked with reference to your dividends and the London and Westminster dividends; but of course the amount of dividend that a bank would pay would depend very much upon the proportion of capital held to their liabilities?-Certainly.

2968. I think when you first opened in London, you did not apply to be admitted to the