User:Jnestorius/National Land Bank (Ireland)

The National Land Bank (National Land Bank, Ltd.; Bannc na Talmhan Teoranta) was a bank established by the Irish Republic in 1919 to lend money to agricultural labourers and smallholders for the purchase of farmland. In 1926 it was acquired by Bank of Ireland and renamed National City Bank. It was separate from the Sinn Féin Bank.

Creation
The bank was part of the First Dáil's programme of land redistribution from "ranches" (large beef and dairy farms) to smaller mixed farms, which republicans advocated both for nationalist reasons of food security and national self-sufficiency, and for socialist reasons of wealth redistribution. Did the bank co-operate with the Irish Land Commission, established by the Dublin Castle administration in 1881, which had somewhat similar objectives? Barton 1921 suggests yes, Sheehan 1993 suggests not; Maybe the truce was the cutoff, or maybe Barton was talking about the Land Settlement Commission Art O'Connor set up in 1920 rather than the 1881 Commission?

1919:
 * THE ACTING-PRESIDENT read the Reports of these [AGRICULTURE AND FORESTRY] Committees which showed that the Agricultural Department had been engaged in developing the details of the scheme for the acquisition of untenanted land for allocation amongst landless men and uneconomic holders and the preliminary arrangements were approaching completion. The establishment of a Land Bank to provide the Financial assistance necessary for the promotion of this scheme was also being undertaken. [...]
 * The sum of £1,000 which you have voted under this head is for initial expenses. If we start this Bank on a small basis it will be a failure. The Bank cannot be started in 2 month's, or in two months' or in three [166] months' time. I hold that, as three-fourths of the people are agriculturists, the Land question is the biggest question we have in Ireland. I would suggest that the motion might be adopted with a direction leaving it to the discretion of the Ministry to advance funds as soon as it is considered advisable, and when there are sufficient funds at their disposal. We have no idea when we may get the money which is now being raised in America. To decide at present to devote any definite sum such as £200,000 would be an impossible proposition. What should be done is to adopt a proposal empowering the Ministry to deal with the whole question in the manner I have suggested.

Robert Barton 1921: "before the Dáil took the report from Agriculture he wanted to make a report to the Dáil upon the National Land Bank. They noticed that a smoke screen had been drawn over the bank and he desired to clear it now for the members of the Dáil. It had been referred to in the agricultural report as a “Loan Fund”. The Dáil had never officially recognised the Land Bank and it was not the policy of the Ministry to officially recognised it at present.

The National Land Bank was registered in December 1919, in accordance with a scheme carefully worked out by a committee acting under the direction of the Dáil to give effect to the Decree of June 18th, 1919,


 * “That the provision of land for the agricultural population now deprived thereof is decreed and a Loan Fund under the authority of the Dáil may be established to aid this purpose”.

The first object in view was to facilitate the transfer of untenanted land to landless men and uneconomic holders and thus to prevent emigration and rural congestion.

Under the Land Acquisition Scheme a sum of £203,000 was transferred by the Minister of Finance to the bank, and with this forty groups of what were once landless men and uneconomic holders have been organised [into] farming societies with joint and several liabilities for the loans advanced.

The membership of these societies is approximately 850 and the area they own and occupy covers 15,750 acres. For the purpose of this land the bank has advanced up to June the 30th last the sum of £316,590 and a further sum of approximately £27,000 (the exact amount is subject to adjustment on closing) will in due course be paid over to complete the negotiation already entered into in respect of six estates in which the legal formalities have not been completed.

Against these advances the bank holds cash security deposits lodged with it by the members of the 40 land societies amounting to eighty three thousand, eight hundred and thirteen pounds (£83,813) equal to 26.4% of the purchase price in addition to first mortgages on the whole of the land all of which was very [48] carefully valued before purchase was sanctioned.

The amount of land dealt with is very small in comparison to the needs of the country and represents a fraction of the applications made to the bank, but it is sufficient to prove that the principle upon which the Land Acquisition Scheme is based meets the requirements of the people, is fundamentally sound and can be expanded to form the land settlement policy of the future.

The farms purchased are distributed throughout the centre of Ireland from east to west in those districts where the greatest area of untenanted land remains.



In practically all cases the purchasers are well satisfied and payments due to the bank are being punctually met.

The bank and its land operations has worked harmoniously with the Land Commission courts and those who were concerned over the land agitation which sprang up in the Spring of 1920 will agree that the concerted efforts of the two authorities probably averted an outbreak of violence which might have had very serious national consequences.

For the immediate future the land purchase operations of the bank, owing to the exhaustion of the funds allotted by the Dáil for its purpose, must necessarily be governed by the amount of money which the bank can in future obtain from its branches in the country.

In addition to financing the Land Acquisition Scheme it was found desirable to attempt to establish a financial centre for Ireland which, while providing the usual banking facilities, would invest Irish capital in Irish enterprises instead of placing it at the disposal of the commercial interests of foreign countries.

Steady and continuous progress is being made in the banking department as will be seen from the balance sheet of June 30th, 1921, now before you.

Branches were opened at the beginning of the year in Cork, Limerick, Waterford, Athlone, Ennis and Enniscorthy and a sub-office in Rush transacting business on one day in the week.

The Directors, finding that the premises in Leeson Street were too small and inconveniently situated for the rapidly expanding business of the bank, decided to purchase a site for a new head office in Dame Street. The structure purchased required alterations and additions. Owing to building strikes and other causes these new premises will not be available for a few weeks.

I take this opportunity of urging all members of the Dáil to secure that a large share of the country's capital at present deposited in these banks which are compelled to look to London for guidance in their financial and economic policy shall be transferred to your own bank, which is giving practical expression to the financial and economic policy of the national government and whose object is to encourage the growth of the population and the industries that shall support it."

Barton also said it was "scandalous" that "public men" who lobbied for a bank branch in their district had not transferred their won current accounts to that branch.

Also this:
 * Thomas O'Donoghue asked had the Dáil any official connection with the Irish People's Bank.
 * Michael Collins replied that the Minister of Agriculture did not know any of the circumstances. The Irish People's Bank had no connection whatever with the Dáil and anyone who was foolish enough to put money into it he considered fair game for the fellow who was running it.
 * Joseph MacDonagh asked had Dáil Éireann any authority over the National Land Bank.
 * Barton replied there were three Ministers of the Cabinet on the board of the bank. In addition to that the Minister of Finance had a representative on the directorate and took the greatest interest in the work of the bank.
 * O'Donoghue explained that the reason he asked was that the members of the Dáil were connected with the other bank [the People's Bank] as well and the people down the country did not understand the difference. They had been burned before.
 * Barton replied he was not in a position to state anything about the People's Bank.
 * Frank Fahy understood it was not advisable for the Teachtaí to state publicly that the Land Bank was closely connected with the Dáil.
 * Barton said it was fairly well known in Dublin Castle that it had a connection with the Dáil.
 * Barton said it was fairly well known in Dublin Castle that it had a connection with the Dáil.

18 October 1922 question:


 * Vincent White: To ask the Minister for Finance what is the relation of the National Land Bank, Ltd., to the Government; whether the majority of the shares in the Bank are the property of the Dáil; and whether Messrs. Robert Barton and Erskine Childers are still Directors.
 * W. T. Cosgrave: The paid up capital at 30th June, 1922, was £203,337, of which Dáil Eireann paid in £200,000. In addition Dáil Eireann paid in £91,611 18s. 2d., the proceeds of $400,000 remitted from the funds held in U.S.A. This [1636] £91,611 18s. 2d. is temporarily held on deposit pending its transfer to Share Capital Account. In addition the Dáil supplied £10,000 for preliminary expenses and £25,000 for general development. Messrs. Robert Barton and Erskine Childers are not now on the Directorate.

Lands
The counties for 35 out of 50 societies are listed in Barton 1921; a few are the subject of individual Dáil questions.

Barton 1921 lists 35:
 * Galway: 7
 * King's or Offaly: 6
 * Mayo:	4
 * Limerick: 3
 * Kildare: 3
 * Kilkenny: 2
 * Leitrim: 1
 * Meath: 1
 * Westmeath: 1
 * Roscommon: 1
 * Carlow: 1
 * Sligo: 1
 * Kerry: 1
 * Dublin: 1
 * Tipperary: 1
 * Louth: 1

Purchased by "societies or bodies of trustees".

Land Act 1923: "One of the reasons why it is confined to the Land Bank Societies is that the Land Bank was started by the Dáil. It was financed by the Dáil, and we cannot escape responsibility for the transactions in which it was involved. It was formed at a time when there was a danger that a special land division movement would cut across the national struggle that was going on. To prevent the energies of the country being dissipated the old Dáil set up Land Courts, which gave decisions as to land to which claims were made. Then, in order that these decisions might be financed, the Land Bank was set up, and it carried on its work very largely as political work in order to prevent, as I said, the land agitation from cutting across the national struggle and reaching unmanageable dimensions. The idea was to give the hope to the people who would otherwise be inclined to go in and secure land on their own, to secure it by purchase. It was only able to carry out its work to a small extent. The total number of acres purchased was 10,730, and the number of people in the Societies who acquired land was 879"

Operation
Patrick J. Hogan 1923:
 * The position in 1920 was that a considerable amount of land was bought throughout the country by groups of men. The Land Bank was constituted by the first Dáil and it stepped in and advanced money for the purchase of these lands. They made the advances to the purchasers who are usually congests or landless men in the neighbourhood and who would not have the money in any event. The scheme was something like this. The Land Bank [2050] agreed with those men that they would form a co-operative farming society and an assignment of the land was made to the estate and the purchase money was advanced by the Land Bank and paid to the vendors. The Bank took a mortgage on the land for the full amount of the purchase money repayable for interest and sinking fund on the following terms—6 per cent. for the first 6 years, 7 per cent. for 7 years and 5 per cent. for 13 years. These were the terms and the mortgage was the full amount of the advance including costs.
 * Naturally that may have been all right in 1919 and 1920, but the rent made up to 6 or 7 per cent. is not at present a very attractive proposition and some of these estates are in very serious difficulty. The Bank was constituted by the first Dáil and the liability is to a certain extent the liability of the present Dáil as the heirs and successors of the first Dáil. In any case we acknowledge that the scheme was directly the result of the people who were in authority in the first Dáil and we acknowledge their liability and further we are interested in the prosperity of these estates some of which are doing splendidly. We think the time has come when some Government Department should take over the concerns and put them on a proper foundation and we have availed of this Act to do it. We propose to hand over the estates to the Land Commission and that the Land Commission shall pay off the outstanding advances together with costs and head rents and so forth to the land bank.

Hogan 1922:
 * National Land Bank, Ltd.—At the commencement of the period under review, I found that the National Land Bank had something like 5,000 Acres of land ready for immediate sub-division. It was necessary to secure the services of experienced Surveyors and Valuers to carry out this work, and in conjunction with the Officials of the Bank, I succeeded in obtaining, on loan, a number of officials from the Irish Land Commission to carry out this work.
 * This experiment has proved successful, and, as is shown in Appendix C, over 6,000 acres have been demarcated and divided, and 230 families or landless men have been provided with new Holdings, or with additional Allotments.

As well as land purchase, the bank also made a loan to Wolfhill Collieries, a struggling coalmine near Athy. This was on 30 January 1923, shortly after the Free State's establishment and with the Civil War still in progress; it was made for political rather than economic reasons.

Ernest Blyth in 1926 said many Dublin forms banking with Ulster Bank when the 1920 Belfast boycott began transferred to the National Land Bank, with most reverting once the boycott ended. The "Natland Auxiliary Society Limited" was a holding company for the bank to distance it from the Dáil. Its share was allocated to the Minister for Finance by the Dáil Eireann Loans and Funds Act, 1924.

Art O'Connor criticised people who took out loans with the bank but did not lodge their savings with it.

Other account holders included the Tailteann Games organising committee, which had an overdraft after the 1924 games, and the Provisional Committee of the Irish Engineering, Shipbuilding and Foundry Trades Union, which opened an account on its foundation in May 1920 and took out a £2,500 loan in September 1920 to by the Plaza Hotel.

Later
The price of land fell in the 1920s and tenant societies went into arrears in repayment of their loans to the Land Bank.

The Land Act 1923 transferred the National Land Bank's land purchase scheme to the reformed Land Commission. Hogan:
 * We thought it well to take over all the Land Bank Societies, good, bad and indifferent, and to give them all a chance. Far the greater number of them are in a flourishing condition, but there are a [1979] certain number of them which are not.

Land Bonds at 41/2% interest were issued under the 1923 act.

Several state accounts were kept at the National Land Bank, including the account for compensation for damages from the Irish War of Independence and Irish Civil War, and the motor tax account (transferred from the Bank of Ireland in 1924).

£300,000 voted in 1925 in relation to the Trade Loans (Guarantee) Act as private banks refused to fund.

1926 estimates:
 * In respect of the Stocks managed by the National Land Bank the question of remuneration is very difficult, and it has been found impossible up to the present to fix a definite scale. In the case of the Compensation Stock, the difficulties of management are increased by the fact that the stock is issued in series, that the stock is issued from day to day, that it is redeemed by means of annual drawings and that the Bank is responsible for the payment of the capital sum as well as of the dividends. To some extent the same difficulties are experienced in connection with the Land Bonds, with the exception that the stock is not issued in series. In respect of these particular Stocks we went as carefully as possible into the question of the remuneration of staffs and the cost of printing and stationery and it was decided that the Land Bank should accept for these particular services, in connection with the Compensation Stock and the Land Stock up to 31st March, 1926, a sum of £1,650. This small sum is justifiable only because there have been no drawings of Lands Bonds up to now, and, in fact, dealings in the Bonds and the consequent work thrown on the banks as a result of the transfers have only just begun. The unredeemed amounts of Compensation Stock outstanding were as follows on the dates mentioned: On 31st March, 1924, £47,650; on 31st March, 1925, £499.150; on 1st January, 1926, £834,950. The amount of Land Bonds issued at the 31st March, 1925, was £362,509. and at the 31st December, 1925, £1,121,855. I [928] think that the amounts provided in the Estimates for the management of our National Debt are fixed on a very reasonable scale.

1926 directors included the Minister for Finance Ernest Blyth and James J. McElligott of the Department of Finance, Senator James G. Douglas, and businessmen Timothy Caffrey and Lionel Smith-Gordon. Michael Heffernan criticised duplication between the National Land Bank and the Industrial Trust Company, and conflict of interest for Douglas and Smith-Gordon, who had business interests in receipt of bank loans. Blyth said he was appointed to the board by Michael Collins but had no involvement since becoming minister. Similar claims were by Martin Fitzgerald in the Seanad, and denied there by Douglas and Blyth.

Blyth: "It is suggested, too, as I gathered when reading this article, that there was some great anxiety on the part of the Government to have business sent to the National Land Bank. As a matter of fact, so far as the loans guaranteed under the Trade Loans (Guarantee) Act are concerned, the position was that the ordinary joint stock banks —we found out this after certain proposals had been passed—were not prepared to make the advances. Where it was recommended by the Committee that a loan could be given to be repaid in ten or fifteen years we found, as a rule, that the ordinary joint stock banks refused to give the loan for any longer period than five years. That period would have meant that an impossible burden would be cast on the undertakings getting the loans. In consequence of that, to avoid a complete deadlock, and to prevent the Act being completely inoperative, I came to the Dáil and asked for an advance of £300,000 to enable certain of the loans actually to be made through the Land Bank. It is because other banks would not take up the loans that certain of them had to be made by the Land Bank.

I have recognised for a very considerable time that the position of the Land Bank is anomalous. I have recognised that it is a State-owned bank which is not a State bank. It was formed to do a certain work at a time of stress; it was formed to prevent the national struggle being changed into a land war during 1919-1920. Since then it has simply been carrying on as a small bank on very much the same lines as other banks, with this difference, that as the Minister for Finance was the holder of the shares the directors were nominated by the Minister for Finance instead of being elected by a meeting of shareholders.

When it was determined to set up a Banking Commission it was also determined that no change should be made in regard to the National Land Bank until the Banking Commission had reported. One of the things which the Banking Commission has been specifically asked to report upon is whether the National Land Bank should be continued as a State-owned bank, and, if continued, what functions should be assigned to it. I think it was presumed that there could be no purpose in continuing it as quite a small bank, doing practically the same business as the other banks and committed with them in a small way.

It is ... difficult to get people of the stamp that one would like to have acting on a body like the Land Bank. It is all because the shares are owned by the State and the money is State money. The most ordinary transaction will be made the subject of libellous and slanderous rumours. Transactions that nobody would even look at twice if they were done by an ordinary joint stock bank will be passed around from mouth to mouth and twisted and exaggerated in every possible way.

For a very long time Senator Douglas has been anxious to leave the National Land Bank, but I could not see any possibility of replacing him easily and I had to ask him to remain on and to carry on the work until the time would arrive when some definite decision could be come to in regard to the future of the bank. If we are to carry on a bank like the Land Bank I do not see any possibility of doing it except by appointing somebody at a salary of, say, £2,500 a year, giving him something approaching judicial tenure and forbidding him to carry on any other functions. I think in no other way could we possibly carry on a State-owned bank, and, even with that, I believe difficulties and troubles would be encountered that do not exist in respect to ordinary banks.

The shares of the National Land Bank, by the Dáil Loans and Funds Act, were definitely transferred to the Minister for Finance out of the name of the sort of bogus society which was created at the beginning for the purpose of holding the shares. When the bank was started it was feared that the British Government might come down on it in some way and the society was started. The story was prepared that it had collected funds in America as it was feared that the British Government might make an investigation. Nominally that society held the shares, and held them until the Dáil Loans and Funds Act was passed, when they were transferred to the name of the Minister for Finance. Since that time, because they were the direct property of the State, Mr. McElligott has sat on the Board of the Bank with a sort of watching brief. The bank was simply carrying on and marking time, and Mr. McElligott sat there with a watching brief. He has no interest in the bank whatsoever and no interest in getting business for it. He had no interest in it at all except to see that State property was not frittered away. As I say, you find in this moribund publication an article which, if not libellous because of false statements, is libellous because of presentation and libellous in intent.

I do not know exactly whom the writer is driving at, but he must be driving at somebody. There is nothing to conceal about the matter. It is all open and above board. I have explained Mr. McElligott's position in regard to the Industrial Trust Company. There is no connection between the Industrial Trust Company and the National Land Bank except that I believe the Industrial Trust Company keeps its accounts with the National Land Bank. Beyond that there is no connection between them. One is privately owned, but I believe it has made arrangements in cases where it makes advances, that a representative should sit on the Board of the Company getting an advance. In certain, other cases, at the request of the Government, that has been done by the National Land Bank. ... At the present time I certainly would not call on any of the people mentioned to cease their functions either as directors of any of the companies of which they are directors or as directors of the National Land Bank."

In July 1926 the Bank of Ireland acquired the Minister for Finance's interest in the National Land Bank for £203,000. The decision was announced in the Dáil on 20 July. The Currency Commission' earlier report had recommended that the National Land Bank was to be allotted a quota of £55,000 of "Consolidated Bank Notes", which was added to the Bank of Ireland's quota. The bank undertook that "any member of the permanent staff of the National Land Bank for whom the Bank of Ireland would be unable to find employment would receive compensation by way of superannuation allowance equivalent to two-thirds of their salary". This guarantee did not apply to women employees.

Land Act 1927 passed to amend 1923 act. Second Stage:
 * The Land Bank advanced the purchase money to the purchaser, who had to deposit with them one-fourth of the purchase money. They very often had to borrow that deposit from the local bank, and pay a high interest on it. In addition, they had to pay the interest on the full purchase money to the Land Bank. Everything that happened in the case of the committees happened in the case of purchases by the Land Bank. They now find themselves faced with the capital unpaid either to the Land Bank or to the local bank, and there are big arrears of interest. There is complete confusion in the sense that some have got grazing rights and others have not. The lands are not being farmed properly. Nobody is taking an interest in them. They are all hoping that something will happen to relieve them.

Conor Hogan complained that the Land Bank tenants got preferential treatment compared to those who took out loans as members of the Farmers' Defence League.

Thom's Directory 1927 has:
 * NATIONAL LAND BANK (Ltd.)
 * Founded 1920
 * 10 College-green Dublin
 * (all the shares are owned by the Bank of Ireland)
 * DIRECTORS: Chairman Senator James Douglas, L. Smith-Gordon, A.R.S. Nutting, H.J. Millar, Joseph X. Murphy, Lord Ardee; Manager T. Caffrey;
 * BRANCHES Cork Limerick Athlone Ennis Waterford Tralee
 * Correspondents and Agents — London York Paris Berlin Brussels Antwerp Rome Vienna Rotterdam Madrid Copenhagen and other Foreign Cities

1930:
 * From the financial point of view the Land Bank Estates have now been practically disposed of, 41 of the Co-operative Farming Societies having been dissolved while the remaining 7 will be dissolved very shortly. The total capital liability under Section 46 (b) of the Land Act, 1927, in respect of the 48 societies amounts to approximately £346,335, of which the State liability will be approximately £167,252 (or 48 per cent,. of the total). The future continuing charges on the Land Commission Vote will therefore be 4¾ per cent. on £167,252 equivalent to £7,945 per annum. For the year 1930-31, in addition to this annual charge on the capital liability assumed by the State, there is a charge under Section 46 (a) of the Land Act, 1927, for arrears of annuities in the 7 cases not yet dissolved, amounting approximately to £6,065. This explains why the amount for Land Bank cases under sub-head L of the Land Commission Estimate for the year 1930-31 is put down at £14,000. In future years it will be reduced to £8,000.
 * The winding up of the Land Bank estates has proved to be a very difficult undertaking, involving a detailed examination not only of the lands and their ownership but of the security for deposits and their allocation, as well as an investigation of the previous financial arrangements of the societies and the recovery of moneys due to them. As regards the resale of these lands, 26 estates, [2284] comprising a total area of 6,239 acres, have been already resold to purchasers for a total price of £94,737, and arrangements are well advanced for the resale of the remainder.

Later renames
Bank of Ireland renamed the National Land Bank in 1927 to National City Bank Limited. [Maybe merged with "National City Bank Ltd - Irish interests", another "Related Entity" of Bank of Ireland? ] In 1968 Chase Manhattan Bank took a stake and it was renamed Chase and Bank of Ireland (International) Limited. Chase took it over in 1979 as Chase Bank (Ireland) Limited. Mirroring its American parent's mergers and acquisitions, it acquired Chemical Bank Ireland in 1993, and later became J. P. Morgan (Ireland) plc. In 2008 acquired Bear Stearns Bank Ireland and was renamed J.P. Morgan Bank (Dublin) plc.

Analysis
Sheehan 86:
 * While it could thus be said that the Land Bank was nothing more than an ambitious experiment that ultimately proved unsuccessful, this should not detract from the vital role it played, from 1919-21, in minimising agrarian unrest.

Sheehan 147-8:
 * The Land Bank was a brave experiment, but it had limited resources and was operating at a time of very high land prices, and the fact that those tenants it had helped to purchase land had to be rescued by the government in 1923 is itself sufficient comment on its lack of long term success .. While neither the Land Bank nor the Land Settlement Commission had any enduring role to play in the new Free State, nevertheless, they had performed the immediate tasks asked of them with distinction. In the highly unusual circumstances of the time, they had the flexibility to respond as the occasion demanded; something that larger, more conventional, government institutions would probably have lacked. Unfortunately, both of their creators, Robert Barton and Art O'Connor, opposed the Treaty, as did Conor Maguire one of the Commissioners, and their hard-earned experience was lost, for the time being at least.