The Journal of Economic History



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The Trading of Unlimited Liability Bank Shares in Nineteenth-Century Ireland: The Bagehot Hypothesis


CHARLES R. HICKSON a1 and JOHN D. TURNER a2
a1 Lecturers, School of Management and Economics, Queen's University Belfast, Belfast BT7 1NN, Northern Ireland. E-mail: c.hickson@qub.ac.uk
a2 Lecturers, School of Management and Economics, Queen's University Belfast, Belfast BT7 1NN, Northern Ireland. E-mail: j.turner@qub.ac.uk.

Article author query
hickson c   [Google Scholar] 
turner j   [Google Scholar] 
 

Abstract

In the mid-1820s, banks became the first businesses in Great Britain and Ireland to be allowed to form freely on an unlimited liability joint-stock basis. Walter Bagehot warned that their shares would ultimately be owned by widows, orphans, and other impecunious individuals. Another hypothesis is that the governing bodies of these banks, constrained by special legal restrictions on share trading, acted effectively to prevent such shares being transferred to the less wealthy. We test both conjectures using the archives of an Irish joint-stock bank. The results do not support Bagehot's hypothesis.



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