The Isle of Man Banking Company Limited.

ON the 31st October, 1925, the Isle of Man Bank completed the sixtieth year of its existence. Its fiftieth anniversary passed amidst the anxieties of the Great War; now that a calmer time has come, it is not without interest to recall some of the facts of its beginning and progress.

FOR some considerable time before the year of opening, 1865, the idea of a strong joint Stock Bank for the Isle of Man had been in the air. The banking business of the Island was then carried on by Messrs. Dumbell & Howard, a local private bank of comparatively recent establishment, and the Bank of Mona, a Scottish institution of considerable standing in the Island, where little was known of the weakness of its parent Head Office, the City of Glasgow Bank.

In 1857, a time of financial stress, both of these were in temporary embarrassment, and the local bank of Dumbell & Howard was closed for months. It is said that Mr. Mark Hildesley Quayle, Clerk of the Rolls, and other business and professional men were strongly impressed by these occurrences, and a project for a new bank was earnestly discussed. Mr. Quayle was believed to have specially realized the risk of his position as the custodian of large sums belonging to the Chancery Court, for which at that time he was personally responsible.

IN March, 1858, there appeared in the Manx newspapers the prospectus of a bank, of which "limited liability" was a feature. Subscribed to this proposal were the names of W. F. Moore, H.B. Noble, S. Harris, Gilbert and Gavin Torrance, Thomas Bridson, Charles Cleator, and other well-known men of business in Douglas. A copy of this early prospectus appears in the Appendices. Nothing definite apparently resulted from the advertisements.

IN 1862, the British Parliament passed the Companies Act, which is the charter of Limited Liability. This revived the movement in the Isle of Man. Mr. William Callister, of Thornhill, who had acted as representative at Ramsey of Holmes' Bank, and Mr. Mark Hildesley Quayle, already mentioned, united in influencing the recently appointed Governor, Mr. H. B. Loch, with such success, that on the Tynwald Day of 1864, His Excellency gave notice to introduce into the Insular Legislature a bill " to provide for incorporation, regulation, and winding-up of trading companies with limited liability." The formation of the Bank was delayed to await the enactment of this measure, which duly passed the Legislative Council (the Upper branch of the Legislature) and was then sent to the House of Keys (the Lower branch). Judging from the press reports of the Keys' debates, and from private correspondence still in existence, Mr. Callister would appear to have had charge of the bill in the Keys, and in the debates he was ably supported by Mr. W. F. Moore.

On 14th October, 1864, Mr. Callister wrote to Mr. Noble as follows — "Of late I have made no secret of my intention about the Bank in the event of the Limited Liability Bill becoming law. This will account for your hearing what you did. I think the matter should not be kept secret any longer."

THE Bank's foundation may actually be dated from 27th January, 1865, on which day Mr. Callister presided at a meeting of five, who came together by appointment at the office in Douglas of Mr. Samuel Harris. These were Mr. Mark Hildesley Quayle, of Castletown, Clerk of the Rolls, whose family had carried on a private bank, still well-remembered in Castletown, in the early part of the 19th century ; Mr. William Callister, of Thornhill, then at the height of his influence as a landowner and capitalist in the North of the Island, and as a member of the House of Keys; Mr. William Fine Moore,of Cronkbourne, proprietor of the well-known Tromode canvas factory, and also a member of the Keys ; Mr. Henry Bloom Noble, of Villa Marina, by whose large bequests so many Manx charities now benefit; and Mr. Samuel Harris, then, and for forty years after, High-Bailiff of Douglas.

At this meeting it was resolved "That it is desirable forthwith to establish an Insular Bank with limited liability, and that such Bank be called The Isle of Man Banking Company Limited."

The five further agreed to act as the promoters, and the capital suggested at the meeting was £120,000 in 12,000 shares of £10 each. The number of directors was to be five, with a qualification of 200 shares.

THE bill, however, under which the Bank was to be founded, made slow progress in the House of Keys ; indeed it met with strong opposition, largely, as the promoters believed, of an interested nature. In a long and warm debate in March, 1865, the opponents of the measure urged that the principle of limited liability, as applied to banks, was very dangerous ; a large business, they argued, might be carried on by a few men, without efficient check, and altogether outside the knowledge of the shareholders. The supporters of the bill quoted the approval and adoption of the method in England, where the Bank of England itself was based on limited liability. It was the only system, they urged, on which really responsible men would ever attempt to found a joint-stock bank, for persons of substance would not risk their entire resources. They further pointed out the advantages of the rigid scrutiny and independent professional audit provided under the bill.

An amendment to exclude banks from the scope of the act was defeated, but the measure failed to secure the essential number of votes (13 out of 24)the voting being 11 each way.

A meeting of the promoters was held on the day following. Mr. Quayle, who could not be present, wrote advising his colleagues not to be discouraged, and suggesting that, until Manx legislation was obtained, the new Bank might be registered in Liverpool under the English Act.

It would seem, however, that some of the opponents to the measure soon changed their views, for when, on 11th April, the Bill again came from the Council to the Keys, it was referred to a Committee. A conference between the two branches of the Legislature took place on 29th May, with the result that the Bill, with some alterations, was passed, and became law on the following Tynwald Day, 1865.

Mr. Callister wrote to Mr. Noble on 5th May, 1865, "The Committee of the House of Keys have agreed about the Limited Liability Bill. The former noncontents have all come round and will join in passing the measure. ... The main point now is to secure a proper audit, and to this we must bend our attention. ... The Bill is now certain to become law and from all that I can learn I am led to think the proposed Bank will be well received by the public; my own wish is that the list of proprietors should embrace as many persons in business as possible, as that would infallibly ensure the success of the undertaking."

WHILST the Act awaited promulgation, the promoters were engaged in framing the prospectus. It was now agreed that the capital should be increased to £150,000 in £100 shares, 3000 to be subscribed for by the promoters, while 3000 were reserved for future issue, and 9000 offered for public subscription. Two pounds per share was to be paid up forthwith, leaving £1 6s. 8d. callable at notice, £6 13s. 4d., or two-thirds of the nominal amount, was, as still is obligatory by law, to remain as security, payable only in the event of liquidation).

ON 19th August, 1865, the list of applications closed, and, on 18th September, Out of 13,615 shares applied for, 9000, the number available, were allotted among 227 persons, the original shareholders. Among these were many men, besides the promoters, of standing and influence. Among the landowners were : J. S. (later Sir J. S.) Goldie Taubman, of the Nunnery), ; Major Bacon, of Seafield; Edward Moore Gawne, of Kentraugh ; Wm. W. Christian. of Ballachurry ; Henry Cadman, of Howstrake ; Thomas Fisher, of Balladoole ; and Charles Dodds, of Ballacallin.

Among business men were: William Dalrymple, George Sherwood, Daniel E. Gelling, Thomas Cubbon, John Crellin and Thomas Caine, of Douglas ; John R. Kerruish and Daniel Joughin, of Ramsey ; James Mylchreest, of Castletown ; and Edward Qualtrough, of Port St. Mary.

Others of the larger shareholders were : Col. C. H. Cary, of Castletown ; Rev. Wm. Cromie, Lawrence Wm. Adamson, Alexander and James Spittall, of Douglas, and Archdeacon J. C. Moore.

Richard Sherwood, afterwards Deemster, was also on the original list, and at the foundation, and until elevated to the Bench, acted as the Bank's legal adviser. The beautiful handwriting of the Bank's Memorandum of Association was the work of Mr. Sherwood.

Only one of the 227 original shareholders now survives, Mr. Henry Evans Gelling, of Port St. Mary, who had then recently commenced practice as an advocate at Castletown. Mr. Philip J. Kegg, another original Castletown shareholder, died so lately as 1919.

IT was evident that with administration of any ordinary efficiency the prosperity of the Institution was assured. On 11th August, 1865, Mr. Callister wrote to his colleague, Mr. Noble — "It is very gratifying to find that our undertaking is now an accomplished fact. There never was such a body of shareholders, connected with the Isle of Man, united together before, and if an undertaking commencing under the most favourable auspices is deserving of success, ours certainly deserves it; and, unless some great mistake is committed, must succeed to a reasonable extent. I say reasonable, because it is not well to entertain extravagant expectations of any undertaking." And he wrote again on 13th January, 1866 — "In time we will take the lead, or I am very much mistaken. The publication of our list of shareholders has done much to increase confidence."

THE Company, was forthwith registered, its certificate being numbered 1, so that it is the first and oldest of all Manx companies incorporated under the Act of 1865. The " Provisional Committee", as it was now called, selected as manager Mr. John James Karran, accountant at the Bank of Mona, who was to hold that office for nearly twenty-nine years, and, on his retirement, served another fifteen years as a Director. A man of conservative mind and of great application to business, Mr. Karran was, to the end of his life, intensely devoted to the interests of the Company. Mr. Archibald Clarke, also a Bank of Mona official, was made cashier. He retired in 1893.

THE well-known and beautiful design on the Bank's £1 notes, a view of the Douglas of that time from a print illustrating the arrival of Governor Piggott in 1862, was now chosen. The note has remained practically unaltered. This local currency note has always held its own in the Island. In 1894 a £5 note was for the first time issued. With the Bank's issue of £5132, shown in the first balance sheet of December, 1865, may be compared that of £82,196 in its last balance-sheet of December, 1925. The Committee at the moment experienced some difficulty in obtaining bonds on land to secure this note issue. Mr. Callister then transferred to the Bank several of such mortgages which he privately held on Manx properties, and these were handed over to the Insular Government as part security. Eventually £8,000 Consols was purchased and substituted for Mr. Callister's bonds, which were then re-conveyed to him.

THE Clerk of the Rolls (Mr. Quayle) now withdrew from the Committee because, as judge of the Chancery Court, he felt that his position disqualified him from acting as a Director. His place was filled by Mr. William Dalrymple, proprietor of the woollen factory at the Union Mills.

THE London & Westminster Bank was selected as London agents, a connection which has continued to the present day. A little later the Liverpool business of the new concern was entrusted to the Bank of Liverpool, an association which has also endured, as did that with the Bank of Whitehaven, until within recent years the latter was absorbed in a larger bank. The Bank's correspondence with the Provincial Bank of Ireland dates from the foundation ; that with the Bank of Scotland, though not so old, is also of long standing.

The Bank's first broker was Mr. P. B. Drinkwater, of Liverpool, brother of Deemster Sir W. L. Drinkwater. Mr. Drinkwater's partner, Mr. H.B. Parr, is still associated with the firm of Parr & Rae, who have continuously to the present date advised the Bank in its investment business.

On Mr. Sherwood's elevation to the Bench, he was followed as solicitor to the Bank by Mr. G. A. Ring (late Attorney-General), Mr. R. B. Moore (present Attorney-General), and then by Mr. W. P. Cowley, the Bank's present solicitor.

The earliest auditors were Mr. David Lyell and Rev. H.C. Davidson. Since 1879, the professional audit has been performed by a member of the firm of Messrs. Turquand Youngs & Co., of London, assisted, as in the past, by a local gentleman elected from among the shareholders ; Mr. Ll. S. Kneale, advocate, officiating for a number of years, followed by Mr. H. Cowin, the present local auditor.

IT was an essential feature of the Bank that the Directors should have efficient control of, and be in continual touch with, its affairs, and a weekly meeting was initiated, which has continued to the present time.

THE Douglas office opened on 1st November 1865, in Athol Street, in the premises now occupied by Messrs. Williamson's grocery business. Castletown branch was opened on 11th November ; Ramsey, a little later in the same year; Peel, on 8th February, 1866; Port St. Mary dates from 1874; Port Erin, from 1894 ; Laxey was established in 1895; and the two auxiliary Douglas offices, Regent Street and Marina, in 1900 and 1924 respectively.

The early Bank premises had little architectural pretension. Some of them must, from the first, have provided only cramped accommodation ; none of them belonged to the Company. At the present time the Bank owns all its buildings. The new and handsome head office was first occupied in 1902. Of the present branch offices, Castletown and Peel were taken over from the Bank of Mona ; the others were built or re-built by the Company.

IN 1865, the staff at Douglas consisted of manager, cashier, and three clerks. The first branch agents were Mr. W. E. Stevenson Moore, at Ramsey; Mr. Tom Corrin, at Castletown ; and Mr. James Cannell, at Peel. The Ramsey agent and his immediate successor, Mr. D. Joughin, both died within a few years, but Mr. Thomas Corkill, who then took up office, had a long and prosperous term, as had the Castletown and Peel agents. All three died in retirement.

Of the original staff, it may be mentioned that two survive at this time, — Philip Talbot Whiteside, resident in far-off Brisbane, who was a junior clerk at the Head Office at the opening, and John James Cannell, of California, who still visits the Isle of Man on occasion. Mr. Cannell was the first apprentice at Peel.

IT is recorded that on the day of opening £3000 was paid in, and by the 7th November, the deposits were £13,000. At the first statutory meeting, on 20th December, 1865, when the five directors were re-elected, they were able to report £55,534 in deposits and 287 accounts. On 5th February, 1866, the first general meeting, these figures, as at 31st December, 1865, were respectively given as £58,854 and 308 accounts, and a profit of £20 was already shown.

The qualification for the directorate, originally fixed at 200 shares, was in 1868 reduced to 100 shares.

The following years were a time of steady progress.

In December, 1870, deposits had risen to £207,240 (total assets £263,000), the dividend to 10 per cent per annum, against 5 per cent paid for 1866. Already the Reserve Fund had reached the limit prescribed by the Articles of Association, and during the next ten years it went on increasing.

Mr. William Callister, the first Chairman, died in 1872, and Mr. Harris was elected to preside in his place. In 1876 began the connection of Mr. John Thomas Clucas, son-in-law of Mr. Callister, with the management of the Bank, and he continued a director till his death in 1887. Mr. W. F. Moore was in office (with a short break) till 1886, Mr. Dalrymple till 1890, Mr. Noble till 1893, and Mr. Harris till 1894. Other directors up to the time of the present Board have been Captain R. J. Marsh, of Ramsey; Mr. John Quayle, of Crogga, (son of Mr. M.H.Quayle); Mr. Thomas Fisher, of Castletown ; Mr. Dalrymple Maitland, of Union Mills ; Major R. S. Stephen, of Spring Valley; Mr. J.J. Karran, of Thornton, already mentioned as the first manager; Mr. A.W. Moore, of Cronkbourne(son of Mr. W.F. Moore), Speaker of the House of Keys ; Mr. W.A. Hutchinson, of The Groves; Mr. G.F. Clucas (the present Speaker of the House of Keys); and Mr. J.R.Kerruish, of Ramsey. Among these, a group of men of the highest financial and social standing in the Island, it may perhaps be allowable to single out Mr. Maitland, who sat as a director for 29 years, and Chairman for 25 years, as the Bank's most conspicuous figure, and for a generation the chief representative of finance in the Island. He was at the same time, Chairman both of the Isle of Man Steam Packet Company and the Isle of Man Railway,. On the death of Mr.A.W. Moore, he succeeded that gentleman as Speaker of the House of Keys, a position he retained until his death in 1919.

Since the death of Mr. Maitland, Mr. Leigh Goldie Taubman has been Chairman, and with his colleagues, Messrs. E. T. Kissack, (Chairman of the Isle of Man Railway), Philip Christian, John Donald Clucas, and Robert F. Douglas, continue the traditional policy of the Bank, having regard to the welfare of the customers and the Manx community.

IN 1879, the 3,000 reserved shares were offered to the proprietors at a premium of £4, and in general were readily taken up.

THE period between 1880 and 1900 saw great changes in the Island. While agriculture, if fairly prosperous, made no great advance, the other staple industries of fishing and mining were failing.

There ensued instead a great development of the holiday traffic. Visitors from the adjoining lands came in ever greater numbers ; the improvement of harbour facilities and of steam communication, the railways which had been constructed in the seventies, the new hotels and the immense places of amusement, transformed the life of the Island and especially of Douglas. The turnover of the Island's business, if not the resulting profit, was immensely increased.

A feature of Manx finance during this time was the rivalry between the Banks. In 1874, Dumbell Son & Howard had become a joint-stock company as Dumbell's Banking Company Limited. In 1878, the Bank of Mona ceased to carry on business following on the failure of its parent, the City of Glasgow Bank. For some years, the two local banks, Isle of Man and Dumbell's, had all the Insular business between them, and though in 1882 a third banking company (The Manx Bank) was formed, it did not prove a very formidable competitor. In spite of the popularity of Dumbell's Bank, and its more adventurous spirit, the Isle of Man Bank had its share of the new business and profits. In December 1880, its total assets were £584,430; in 1890,£713,400; and in 1895,£936,930 ; while the Reserve Fund, in the last-named year, had risen to £50,000, and the dividend to 25 percent. per annum.

The stoppage of Dumbell's in the February of 1900 naturally caused some anxiety, and a temporary withdrawal of a certain amount of deposits, but the Bank emerged from the trial with greatly increased prestige, and its large liquid resources furnished the Island with a great reserve, which was of the utmost service to the community in the emergency. The year 1900 ended with deposits of £880,000, and total assets exceeding £1,000,000. The opening of Regent Street Branch, which took place at this time, and gave improved banking facilities in the busiest centre of Douglas, has no doubt been an important factor of the increased prosperity.

IT is not desirable that the history of a Bank should be sensational, and when normal conditions had been re-established, which took place more rapidly than had generally been anticipated, and for a number of years after, there is very little to record except the inevitable changes in the Directorate, and the continual fall in the value of first-class securities in which the Bank invested. This the Isle of Man Bank felt, along with all similar institutions on the mainland, and the necessary writing down from time to time tended to reduce the profit and keep down the dividend, which the Directors had thought it prudent to lower at the time of the crisis in 1900 to 15 per cent.

THE advent of the Great War, in 1914, brought the Manx season to a sudden end in the beginning of August. The problems of the war years were faced by the Bank with courage and success. Its figures constantly increased; its new investments bore more profitable rates of interest than the old : but, on the other hand, it suffered from the fall in its old securities, for which full provision had to be made in its balance-sheets.

Another feature of the time was the great amount of 5% War Loan and other Government issues taken up by the Bank's customers through its medium the collection of the income from these and other investments, and transactions of varying nature on behalf of the holders have now become a large and essential part of the Bank's business. In fact, very numerous operations formerly carried on directly between the borrower and the investor are now performed by the Bank, at little or no cost to the customer, and greatly to his convenience. The large present resources of the Bank are the more remarkable when one takes into account the sums withdrawn from its deposits for national purposes during war time.

MR. Alexander Hill, who had succeeded Mr. Karran as manager in 1895, had brought the Bank with great success through the difficulties of 1900, and the initial anxieties of war finance in 1914. His untimely death early in 1915 was a great blow to the Directors.

Mr. Hill was succeeded in the managership by Mr. Cubbon, who had held the position of secretary since 1894, and with him was associated Mr. John Robert Quayle with the position of assistant manager.

ON the 31st December, 1925, the Bank's deposits stood at "£2,,216,731 4s. 0d.; its total assets at £2,471,038 17s. 10d., surely a surprising figure in an Island such as this, and attesting the thrift of the population, which is under 50,000 ; the Reserve Fund being £108,000, that is, a sum three and-a-half times the paid-up capital ; the net profit was £20, 116 18s. 0d.; the dividend (with bonus) was again 25 per cent. The aggregate dividends paid by the Bank exceed 1100 per cent, which means that each original share of £2 paid has received back £22 in dividends during the sixty years. A wonderful record, which goes to prove how efficient the management of the Bank has been.

IT is sometimes said that joint-stock companies are without human sympathy. The remark is ususally unjust; certainly such a company as the isle of Man Bank, whose Directors and officials are Manxmen, is too closely identified with the people of the Island not to be moved within legitimate bounds by all that affects either the community or the individual. In few lands, perhaps, is banking so widely popularized and so intimately connected with the lives of all classes ; the small depositor and the tradesman of humble standing here receive an attention which can hardly be surpassed.

It may more fairly be claimed that in certain respects a company is not necessarily subject to human frailties. Its energies need riot fail when the physical and intellectual powers of its founders decay. Men die ; but the work is carried on. That the Isle of Man Banking Company should so long have survived, with benefit both to the public and its shareholders, tends to prove the competence of our insular people to manage their own affairs in the region of finance as well as in that of politics.

WITH the hopes expressed by the first Chairman in 1865 we may compare a passage in the speech of the Acting-Chairman (his grandson) at the General Meeting of Shareholders in 1925 — "We owe a great deal to these predecessors of ours on this Board. They were wonderfully capable men in their day and generation, and did well for the Isle of Man when they laid the foundations of the Bank."

On reviewing the situation as it would appear to those founders of the Isle of Man Bank in 1865, we cannot indeed fail to be struck with their courage and sagacity in urging the application of the principle of limited liability to Banking Companies as one of the best methods of stimulating business and assisting, the advancement of he community, which it was undoubtedly successful in doing.

In these days of banking amalgamations it is rare to find surviving a purely local bank; but the success of the Isle of Man Bank proves that such a concern, if well managed, may yet, with its local knowledge and local connection, be carried on to the benefit of the proprietors and of the district.