Much Ado About Nothing: The Limitation of Liability and the Market for 19th century Irish Bank Stock

Abstract Limited liability is widely believed to be a prerequisite for the emergence of an active and liquid securities market because the transactions costs associated with trading ownership of unlimited liability firms are viewed as prohibitive. In this article, we examine the trading of shares in an Irish bank, which limited its liability in 1883. Using this bank’s archives, we assemble a time series of trading data, which we test for structural breaks. Our results suggest that the move to limited liability had a negligible impact upon the trading of this bank’s shares.

Wider share ownership?: investors in English and Welsh Bank shares in the nineteenth century

The joint-stock banks that established after the liberalizing legislation of 1826 were periodically criticized during the nineteenth century for their low-quality and rapidly deteriorating shareholder constituencies. The quality of a bank's shareholding constituency was of paramount importance because of unlimited shareholder liability. Using archival records, this article examines the quality of bank shareholder constituencies over the nineteenth century. The main finding is that shareholder constituencies did not deteriorate in quality until the introduction of limited liability. The non-deterioration of constituencies is attributed to bank deeds which locked in the aggregate quality of shareholder constituencies by empowering directors to vet all share transfers.

Holding Shareholders to Account: British Banking Stability and Contingent Capital

This chapter seeks to explain the relative stability of the British banking system in terms of its capital structure. From 1826 joint-stock banking was allowed, but shareholder liability was jointly and severally unlimited. Limited liability banks were allowed from 1857–8, but these banks issued partly paid shares with an obligation on shareholders to subscribe for uncalled capital. Contingent capital meant that shareholders and managers would suffer losses in the event of failure and this discouraged risk shifting at the expense of note-holders and depositors. Although individual banks collapsed, the failure rate of banks (in terms of number or capital) did not reach a critical level—10 per cent—beyond which the payments system might have been threatened. This chapter argues that agency problems and systemic risk rose after the abolition of contingent share capital in 1958 and the deregulation of the banking sector in the 1970s.

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

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.

Models of open populations with space-limited recruitment: extension of theory and application to the barnacle Chthamalus montagui.

1. Barnacles are a good model organism for the study of open populations with space-limited recruitment. These models are applicable to other species with open supply of new individuals and resource limitation. The inclusion of space in models leads to reductions in recruitment with increasing density, and thus predictions of population size and stability are possible. 2. Despite the potential generality of a demographic theory for open space-limited populations, the models currently have a narrow empirical base. In this study, a model for an open population with space-limited recruitment was extended to include size-specific survival and promotions to any size class. The assumptions of this model were tested using data from a pan-European study of the barnacle Chthamalus montagui Southward. Two models were constructed: a 6-month model and a periodic annual model. Predicted equilibria and their stabilities were compared between shores. 3. Tests of model assumptions supported the extension of the theory to include promotions to any size class. Mortality was found to be size-specific and density independent. Studied populations were open, with recruitment proportional to free space. 4. The 6-month model showed a significant interaction between time and location for equilibrium free space. This may have been due to contrasts in the timing of structuring processes (i.e. creating and filling space) between Mediterranean and Atlantic systems. Integration of the 6-month models into a periodic annual model removed the differences in equilibrium-free space between locations. 5. Model predictions show a remarkable similarity between shores at a European scale. Populations were persistent and all solutions were stable. This reflects the apparent absence of density-dependent mortality and a high adult survivorship in C. montagui. As populations are intrinsically stable, observations of fluctuations in density are directly attributable to variations in the environmental forcing of recruitment or mortality

High-resolution spectroscopic observations of B-type stars from the Edinburgh-Cape Survey - III. Completion of a magnitude range limited survey

High spectral resolution (R similar to 40 000) and signal-to- noise ratio observations of five high Galactic latitude early- type stars taken from the Edinburgh-Cape (EC) Faint Blue Object Survey are presented. These were required to complete a magnitude range-limited survey of young B-type objects with 11 <V <15. Of the five stars, four were rejected on the grounds that they are either subluminous (subdwarf or horizontal branch), were part of a binary system or possessed colours later than the (U - B) = -0.5 cut-off employed. The remaining star in the data set, EC 19596-5356, is found to exhibit normal young B-type stellar properties. A kinematic analysis reveals that an origin in the Galactic disc appears likely for all the stars in the sample. Some statistics are drawn about the number density of young stars in the Galactic halo.