How Irish pubs filled the banks’ role in 1970
News that a few British pub chains are on the lookout for acquisitions in Dublin will probably provide some relief for Irish publicans who generally have not had a good time so far in the 21st century.
Many have been forced to close and those that have survived have had to significantly reduce their opening hours.
Increased property prices during the Celtic Tiger era, equally steep increases in the tax take on a unit of alcohol, a considerably heightened awareness of – and clampdown on – drunk driving and a ban on smoking have all played a part in the demise of the Irish pub.
This is a great shame. Not only because “in the old days” the Irish pub was an excellent place to spend some time – the prices were reasonable, the service excellent and the conversation, which was generally outstanding, inevitably improved with every unit of alcohol – but also because the Irish pub, particularly in rural areas, played an extremely important social and economic role in the community. While they sadly but inevitably supported a destructive drinking culture, pubs did provide a social outlet for people who lived in remote areas.
However, most critically, the demise of the Irish pub should raise huge concerns among the citizens and government because of its unique role in the economy. Not the traditional role of creating jobs and opportunities but the pub’s lesser-known role as banker of last resort.
Presumably nobody in Ireland has stopped to wonder what will happen next time there is a bank strike in that country if pubs continue to fade.
It might indeed be that the Irish society and Irish economy have become far too sophisticated to cope relatively easily without banks. But back in 1970 that is exactly what Ireland did – for six months in that year the country coped without too much stress when all the banks closed their doors at the beginning of May and kept them closed until November.
For people who are used to accessing an ATM 24 hours a day, this is a staggering thought. The fact that I have little recollection of the strike is only partly attributable to the fact that I was at school and therefore did not have to bother myself with financial matters. I have clear memories of the occasional teachers’ strikes, as well as a few memories of electricity and telephone strikes around the same time.
The main reason I cannot recollect much about the bank strike was because it did not have a debilitating impact on daily life. Thanks to the Irish pubs.
In the 1970s in Ireland everybody of drinking age had a local pub – or two. Even those who didn’t drink had a local.
Inevitably the publican and his staff, who were frequently all members of one family, knew their clientele well. They saw each other regularly, probably followed the same sports teams and probably attended the same church.
When the banks closed, the pubs stepped into the breach and over the next six months a remarkably efficient symbiotic relationship developed.
It was “relationship banking” in the true sense of the term and was based on the pubs’ ability and willingness to cash cheques for almost everybody.
This was long before anyone had dreamt up the concepts of electronic transfers and ATMs; it was a time when cheques were pretty much the only way of moving money between people and between banks.
The pubs’ survival depended on them playing the role efficiently and effectively. They would have gone out of business if their customers did not have access to money to spend on drink but equally they would have gone out of business if they had been imprudent in exercising their ability to cash cheques. So critical a role did the pubs play that the owner of at least one company – a construction company – bought a pub during the strike to ensure that he would have access to cash.
When the banks reopened in November it was several months before all of the cheques in the system were finally cleared. A remarkably small number of them bounced, which is probably evidence that in relationship banking a publican carries far more “moral” authority than an ordinary banker. Losing your reputation with the latter could cause some inconvenience, losing it with the former risked devastating ostracisation.
Sadly, economic life has probably become too complicated and impersonal to do without banks.