In case you thought Irish banking failures and inquiries were peculiar to the 21st century – think again. As Woody Guthrie pithily put it …
Some men rob you with a gun
And some with a fountain pen
… and the Irish banker has been ruining himself and his customers as well as cleverly socializing his losses since the early 1800s.
Let’s look at a few of the most spectacular Irish banking collapses of the 19th century. Most of them involve politicians as well. Strange that.
For example, there was the scandal of the Tipperary Joint Stock Bank in 1856. It was run by the Irish Liberal MP for Carlow John Sadlier, and his brother James, MP for Tipperary. When it ran out of money John Sadlier took the easy way out and committed suicide on Hampstead Heath, leaving James to face the music. This he did for a while before he absconded. He ended his days in Switzerland, the natural home of the dodgy banker. Investigations revealed that the reason for the collapse of the bank was that John Sadlier had been embezzling on an outrageous scale. Before he shuffled off his mortal coil he’d removed nearly £300,000 from the vaults. The whole episode is said to have provided Charles Dickens with the inspiration to create the dubious financier Mr. Merdle in Little Dorritt. The book was being serialized when the scandal erupted.
Fast forward to 1869 and yet another example of Ireland’s capacity to forgive a scoundrel. In this instance it was another MP, James McNeale McKenna who, in the 1850s and 60’s was Chairman and MD of the National Bank of Ireland – so he combined in one person the roles later held by Sean Fitzpatrick and David Drumm in Anglo Irish Bank. Either Seanie and David were total slackers or James Mac Mac was an absolute hive of fiduciary energy.
He successfully ran the bank into the ground on foot of a number of unwise investments in pursuit of growth and greater market share. Aren’t we fortunate that our bankers shrugged off that bad habit a century and a half later. By the time he resigned, accused of cronyism and paying himself too much – other habits utterly alien to the modern equivalent – the National Bank of Ireland had debts of almost £400,000. Miraculously it survived. McKenna, MP for Youghal, lost his seat, but much later re-invented himself as a Parnellite and was re-elected in South Monaghan This bears out the suspicion that if Parnell had nominated a pile of pigeon droppings for a nationalist constituency they would have won the seat with a thumping majority.
Another flawed banker, however, was not so lucky where the Uncrowned King of Ireland was concerned. William Shaw, briefly, held the leadership of the Irish party after Isaac Butt died. But then in 1880 he got the bum’s rush when Parnell stood against him. Interestingly Shaw was supported in the leadership vote by one James McNeale McKenna. These banker/politicians stick together. Shaw, was also founder and Chairman of the Munster Bank. In 1884 he resigned, having received loans to the value of £80,000 – twice the exposure of the rest of the directors combined. Again, we are fortunate that this practice was completely stamped out before the 20th century. The bank didn’t outlive his Chairmanship long. It went bust the following year.
Finally we quickly rewind to the 1820s and Thomas Newcomen, a Viscount and, surprise surprise, a politician. He inherited the Newcomen bank, voted for the Act of Union in 1800, spent much time in his bank’s fine new headquarters – now the rates office beside Dublin Castle – and proceeded to drive the family business into the ground, taking many depositors with him. Newcomen was described as a reclusive Scrooge-like figure who ‘it was widely whispered, gloated over ingots of treasure with no lamp to guide him but the luminous diamonds which had been left for safe–keeping in his hands.’
Thomas Newcomen, driven to distraction by the collapse of his family bank, took his own life 190 years ago, on this day.