BANK NOTES (IRELAND) BILL. (Hansard, 27 July 1920)

§ LORD HYLTON

My Lords, this Bill is introduced at the request of the six Irish Banks of Issue—the Bank of Ireland, Provincial Bank of Ireland, Limited, Belfast Banking Company, Limited, Northern Banking Company; Limited, the Ulster Bank, Limited, and the National Bank, Limited—with the Treasury approval, to provide that the notes of these banks shall be made payable only at one office. As the law stands at present Irish banks of issue are liable to pay their notes at any of their branches, and, in consequence, have to keep at every one of their branches unnecessarily large supplies of legal tender. The provision dates from 1828, when the branches of the Irish banks were very few in number and communications between them were difficult. It is quite antiquated now, and the Bill accordingly proposes to assimilate 565 the Banking Law of Ireland to what is already the law of Scotland and to make notes of Irish banks payable at one office only, either the head office or the office at which the notes are expressed to be payable.

It may be added that under the Bankers (Ireland) Act, 1845, Irish banks of issue have to cover any notes they issue in excess of the small issue existing in 1845 by legal tender currency held at their head office Daring the war, as an emergency measure notes of the banks of issue were made legal tender and the banks were allowed to issue in excess of the legal limits on certain conditions. The Proclamation of December 20, 1919, withdrew these special privileges and the banks are now in their ordinary pre-war position. The bill does nothing to change the status or amount of the banks' note issues. It merely deals with the minor question of where the notes should be payable.

Those noble Lords who may be interested in this measure will find that subsection (1) of Clause 1 provides, (a) that notes issued by a bank of issue in Ireland, and bearing date before the date of this Bill shall only be payable at the head office, and (b) that notes hearing date after the passing of the Bill shall be payable only at the place where they are expressed to be payable. The effect of this second condition is to leave the notes to the operation of the ordinary law of contract, under which they will be payable at the place where they are expressed to be payable. In practically every case this will be the head office, but in the case of a hank like the National and Provincial Bank (whose head office is in London), it would no doubt be a suitable branch office in Ireland. The first provision is needed to deal with notes already issued under the old liability. It substitutes for that, payment at the head office. Clause 1 (2) repeals the Act of 1828 (which imposes the liability to pay at branch), and also repeals Section 1 of the Bank Notes (Ireland) Act, 1830. This is quite out of date. In 1830 the Bank of Ireland had a monopoly of issuing notes in Dublin. In 1828 it took legal proceedings against the Provincial Bank because they paid some of their notes at a Dublin agency. The Bank of Ireland won its case, but so great was the feeling against them that they were only awarded sixpence damages. As a result of petitions from Dublin merchants in favour of the establishment of Joint Stock Banks in Dublin a compromise was effected, and 566 ratified by the Act of 1830, by which the payment of notes in Dublin by an issuing bank other than the Bank of Ireland was made legal for the purpose of introducing such notes for circulation only. These provisions are quite out of date and should have been repealed long ago. Subsection (3) of Clause 1 provides that no Irish bank can issue bank notes other than those that had the privilege before the Act of 1845 and have not surrendered it. There are now six such banks—namely, the Bank of Ireland, Provincial Bank, Belfast Banking Company, Northern Banking Company, the Ulster Bank and the National Bank.