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

Published online by Cambridge University Press:  27 February 2004

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

Type
ARTICLES
Information
The Journal of Economic History , Volume 63 , Issue 4 , December 2003 , pp. 931 - 958
Copyright
© 2003 The Economic History Association

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