Turtle Bunbury

Writer and Historian

 
Random Quote
Random Date

 

HISTORY

HEROES AND VILLAINS

William Shaw (1823-1895), Chairman of the Home Rule Party & Munster Bank

William Shaw was the Chairman of the Munster Bank when it collapsed in 1885. Indeed, his complicity in fraudulent banking practices led to, what was until the Anglo-Irish Bank crisis of 2008-9, the last failure of a major Irish bank. Prior to the Munster Bank’s collapse, Shaw had been a well-respected businessman and independent Liberal MP. As a nationalist, he led the Home Rule movement between the tenures of Butt and Parnell

Born in Moy, Co Tyrone, in 1823, William Shaw was one of many young Protestant students at Trinity College Dublin who became embroiled with the Young Ireland movement during the 1840s. He then studied theology at Highbury College in Middlesex, and served as a Congregational Minister at an independent church in Cork from 1846. In 1850, he cast off the cloth and moved into business. That same year, he married into a wealthy Cork merchant family and began to build up extensive business connections in the city.

In 1865, Shaw began his move into politics, standing unsuccessfully as a Liberal Party candidate in Bandon. Three years later, he won the same seat as an independent Liberal. In 1870 he became active in the Home Government Association, a pressure group set up by Isaac Butt in support of home rule for Ireland. In 1873, Shaw presided over the convention held to found the HGA’s successor, the Home Rule League. In 1874, Shaw was elected unopposed MP for County Cork. Along with Mitchell Henry, he now frequently deputised for Home Rule Party leader Isaac Butt. When Butt died in 1879, Shaw was selected as the new party chairman. The following year he lost his chairmanship to rising star Charles Stewart Parnell.

Shaw objected to the increasing gulf Parnell now wedged between the Home Rule Party and its Liberal roots, opposing the Irish Land League and resigning from the Home Rule Party. In 1880, he sat on the Bessborough Commission which nonetheless declared in favour of the "Three Fs" as demanded by the Land League: fair rent, free sale, and fixity of tenure

In 1864, Shaw was one of a number of Cork City industrialists and merchants who founded the Munster Bank to look after the farmers and traders of the southern counties of Ireland. In 1870, the bank acquired the long established private bank of David La Touche & Son. From 1876, The Irish Banker constantly highlighted the Munster Bank’s liquidity but to no avail. By the end it had 43 offices, 19,000 creditors and 22,000 debtors. And William Shaw was its long-standing Chairman. In 1883, he brazenly declared to the Board: ‘I never in my life bought £500 worth of speculative security; anything I have ever bought, I bought to keep’.

The collapse did not begin until alienated shareholders began a whispering campaign against certain directors who were said to be helping themselves to huge unsecured loans. It emerged that Shaw had received a personal loan of £80,000, more than double that of all the other directors combined. He and the other directors had also received excessively generous dividends. In July 1884, Shaw bit the bullet and resigned. He was strongly denounced and blamed for his role in the bank’s collapse.

Shaw’s resignation coincided with the public acknowledgment that the bank did indeed have substantial long-standing bad debts. Inevitably, debtors became increasingly slow to pay off loans due to an institution that looked to be utterly doomed. The crippled Munster Bank was liquidated on 14 July 1885 and its directors found guilty of insider lending on a grand scale. Over 200 employees were laid off. Two weeks later, Robert Farquaharson, one of the Munster’s managers in Dublin, absconded when confronted with a fraud valued at £70,000. In their summary of events, The New York Times reported on July 14th, 1885, that the directors’ conduct had amounted to “plain fraud”. In the ensuring proceedings, Shaw and two other directors were forced to declare bankruptcy. Shaw himself was fined over £120,000.

A serious calamity threatened Ireland. Fortunately, Cork brewing magnate JJ Murphy, an upright member of the Board, quickly stepped up to the mark and reincarnated the bank as the Munster & Leinster Bank. In time, all the creditors and depositors in the failed bank were repaid in full, and with interest, and a financial calamity was averted. When Murphy was honoured for his efforts by the City of Cork in 1890, one speaker declared that if Murphy had not saved the day, ‘the trade and commerce of the country would have been paralysed for many years, credit would have been destroyed, and misery and poverty would have fallen upon thousands of hapless victims’. In 1966, the Munster & Leinster was subsumed into Allied Irish Bank.

Shaw, who still represented Co Cork in Parliament, did not contest the 1885 general election, which took place just months before the collapse of his bank. He was ruined and spent his last years ‘in seclusion and under shadows of commercial and domestic misfortune’. The disgraced banker worked as a journalist in London for many years, before retiring to Enniskerry, where he settled with his sister in a house on Church Hill, passing away in September 1895.

Articles