Carmarthen Bank was a
bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
established and formerly operated in the county of
Carmarthenshire,
Wales
Wales ( cy, Cymru ) is a Countries of the United Kingdom, country that is part of the United Kingdom. It is bordered by England to the Wales–England border, east, the Irish Sea to the north and west, the Celtic Sea to the south west and the ...
during the 19th century. It became
bankrupt in 1832 and its name was then adopted by another Carmarthenshire-based bank.
History
This bank was established in
Carmarthen by the
partnership
A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments o ...
known as Waters, Jones & Co., and probably developed from one or more earlier banks operated under the name of Waters and variously referred to in the
London Directory, for the years 1811–1816, as Waters; Waters & Co.; R. & R. Waters; and Thomas Waters & Sons.
[Early Banks in West Wales, by Francis Green (in West Wales Historical Records, The Annual Magazine of The Historical Society of West Wales, Volume VI, edited by Francis Green, Printed by W. Spurrell & Son, 1916)]
During the
Panic of 1825
The Panic of 1825 was a stock market crash that started in the Bank of England, arising in part out of speculative investments in Latin America, including an imaginary country: Poyais. The crisis was felt most acutely in Britain, where it led to ...
, the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
suspended cash payments due to frequent provincial bank failures, leading to a general run on
British banks in December 1825.
In December, 1825 public meetings were held at the Guildhall, Carmarthen and at
Llandeilo, where votes of public confidence were passed in Waters, Jones & Co. and
David Morris & Sons.
Both enterprises survived the 1825 crisis but, on 19 January 1832, Waters, Jones & Co. suspended all payments. The partners in Carmarthen Bank at this time were John Waters, Arthur Jones and David Jones, all of Carmarthen.
Attempts were made to avoid
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
, and on 7 February 1832, an agreement
[Carmarthenshire Antiquarian Society archives] was drawn up which recited that the accounts had been inspected on 21 January 1832, and that assets were sufficient to meet liabilities.
Under this agreement, Waters, Jones & Co. would meet all the assets of Carmarthen Bank under the supervision of inspectors, who were to receive the proceeds of realisation of the assets on
trust
Trust often refers to:
* Trust (social science), confidence in or dependence on a person or quality
It may also refer to:
Business and law
* Trust law, a body of law under which one person holds property for the benefit of another
* Trust (bus ...
for the bank's creditors.
This agreement contained a proviso that if the partners of
Sir James Esdaile & Co., bankers of
Lombard Street,
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
, and certain other
creditors holding nine-tenths of the value of the bank's debts, did not execute the agreement before 1 May 1832, the agreement would be void and a commission of bankruptcy would be issued against Waters, Jones & Co.
Although the partners in the bank, and some of the creditors, signed the agreement, the partners of Sir James Esdaile & Co., who were owed a large amount, did not. A fiat of bankruptcy was issued, and the notes exhibited at the Ivy Bush Hotel, Carmarthen on 11 September 1832, when a first
dividend
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-in ...
of 5 shillings in the pound was paid.
According to one authority,
[Anon., British Losses by Bank Failures, 1858] the liabilities of Waters, Jones & Co. amounted to £300,000, and the failure of the bank was the result of ‘issuing notes to the extent of nearly £100,000 upon unmarketable securities, and making advances in opposition to every principle of common sense and common safety. Money was freely lent, without security, to
drovers to enable them to purchase cattle, and the wants of a large agricultural district were soothed in a similarly paternal manner.’ It may be that such harsh criticism was due to the writer being a heavy depositor in the bank.
Successor in name
It was probably after the failure of Carmarthen Bank that David Morris adopted the name, and changed the name of his bank from
David Morris & Sons to Carmarthen Bank.
David Morris & Sons had been formed from the amalgamation of Morris & Sons, which he had established in Carmarthen, in 1791, and
Carmarthen Furnace Bank
The Carmarthen Furnace Bank is a bank established in Carmarthenshire in the 18th century as a result of the efforts of a Welsh entrepreneur and businessman called John Morgan. The banking business started by issuing tokens to facilitate an iron an ...
, which had been established by John Morgan of Furnace House, Carmarthen.
Bank notes
The earliest known
bank note
A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issued ...
for this bank is for £2 and is dated 10 October 1825. Existing specimens of bank notes issued by the bank are for £1, £2, £5, £8, and £50. So far as is known, it is the only bank in England or Wales that issued an £8 bank note.
Other Carmarthenshire banks
Other Carmarthenshire banks include: Carmarthen Furnace Bank,
Llandovery Bank
The Llandovery Bank was established in 1799 in Llandovery, Wales, in the premises known as the King’s Head on Stone Street (comprising the rear range of the present building),Lloyd., T., Orbach., J., Scourfield, R., 2006, Pevsner Architectural G ...
,
Llanelly Bank
Llanelly Bank was a 19th-century bank based in the Welsh town of Llanelli. The bank used the then-standard Anglicised spelling of the town's name.
History
Little is known about the history of Llanelly Bank. However, the House of Lords Sessional Pa ...
, and David Morris & Sons.
References
{{reflist
External links
Carmarthenshire Archives Service, Carmarthen Bank Collection
Defunct banks of Wales
History of Carmarthenshire
19th-century establishments in Wales
Companies based in Carmarthenshire