Just reading a fascinating book on the Cork brewery that was founded in 1792 by two local Cork businessmen and which was still trading in 2008 when it was taken over by Heineken. That’s a period of 216 years in business. Our old family firm Dwyer& Co survived for just 160 years. City Life our little company is 45 years old this month. It is only a baby by comparison!

The book is a fascinating story of the survival of a family business which was started by two prominent Cork business men William Beamish and William Crawford. It started as an equal partnership business, and passed through the generations in similar fashion. A really incredible story in survival, continuity and adapting to changing economic times.

The part that really fascinated me was the chapter about the then Munster Bank.

Cork has had many successful breweries over the years Beamish & Crawford and Murphy’s being the dominant ones. They were both major employers. For a long time, until Guinness became the main player, they also enjoyed great success. Over the years the many other smaller breweries in Cork either went out of business or were taken over. It was the last of these surviving smaller breweries that leads to the banking story.

The brewery in question was Lane and Co Ltd and it was amalgamated with Beamish & Crawford in 1901. That left just two breweries operating in Cork, Beamish & Crawford and Murphy’s.

Just 17 years earlier in 1884 one of the co-owners of Lanes a man called William Shaw was also the Chairman of the Munster Bank. His company Lane & Co had become indebted to the bank to the tune of £57,000. Shaw was also one of the founders of the bank just 20 years earlier when it was set up in 1864. The bank had been formed to look after the farmers and traders of the southern counties of Ireland. Hence the name Munster! In 1870 The Munster Bank acquired the long established private bank of David La Touche & Son.

The growth of the bank was extraordinarily swift and when the end came in 1884 it had 43 branches, 19,000 creditors and 22,000 debtors.

In that year of 1884 a mere 20 years after it was founded, it was rumoured that Shaw and the other directors were helping themselves to huge unsecured loans from the bank. We thought in Ireland that the recent banking crisis and the happenings at Anglo Bank and indeed other banks was unique in our economic history!

It transpired that Shaw had received a personal unsecured loan of £80,000 from the bank. He and some of the other directors had also been receiving excessive dividends. In July of that year Shaw resigned and was denounced for his role in the collapse of the bank which was liquidated the following year on 14th of July 1885. Its directors were found guilty of insider trading on a grand scale and over 200 employees were laid off. Shaw was declared bankrupt and was fined £120,000. A banking crisis resulted.

Interestingly back then the Irish Banking System which was now in turmoil, was not rescued by the EMF or the Irish Taxpayer.

The fascinating and final part of the story is that it was in fact another Cork Brewing magnate J.J. Murphy one of the owners of Murphy’s Brewery, who was an upright member of the Munster Bank board, who quickly stepped up to the mark and reincarnated the bank as The Munster & Leinster Bank. In time, all the creditors and depositors were repaid in full, and with interest, and so the banking crisis was resolved in a very satisfactory way.

In 1996 one hundred and eleven years later the Munster & Leinster bank was subsumed into Allied Irish Bank which was then nationalised on the 23rd of December 2010 when the Minister for Finance the late Brian Linehen announced that he was injecting €3.7 billion of Irish taxpayer’s money into the bank to save the bank.

And so some one hundred and twenty five years after it was rescued by Mr J.J.Murphy the Allied Irish Bank was nationalised and the shareholders lost all of the value of their shares in AIB and their annual and for many, very important dividend income, from those shares. I am really sad that Mr Murphy’s efforts were in vain and looking back now it all now seems such a shame.

Ted Dwyer Family Business

February 2016