01 The Hour
Saturday
7 May 1966. Ireland. Reconstructed to the day.
The notices went up in the first days of the closure. Cheques from regular customers and known clients only.
The banks were shut and nothing was being cleared. A cheque was still an instruction to a bank that was not open, and nobody could say when it would be presented or paid. What a shopkeeper was being asked to supply was not change. It was credit, for an unknown term.
The notices settled the terms on which he would give it. Not the amount, and not the date. Whether he knew the name.
02 The Sequence
May 1966 The major commercial banks closed in a dispute that kept them shut for three months.
4 May 1966 Some firms were reported to have opened accounts with English banks with the intention of flying in wage money.
7 and 26 May 1966 From the start there were many notices that cheques from regular customers and known clients only would be accepted. Cheques circulated widely, but they were not universally accepted.
4 June 1966 As the dispute went on, cheques were increasingly rejected, shopkeepers being unable to accept them because of a shortage of cash.
24 June 1966 The cheque books ran out. The unofficial cheques that circulated after they had run out were reported as having to be examined on a case by case basis.
25 June 1966 Manufacturers were described as unwilling to take them. At the Tipperary cattle market the record of the period is one line long: no sale due to the bank strike.
1 May to 17 Nov 1970 The same thing again, much longer. The strike ran from 1 May 1970 and the banks opened for the first time on 17 November. Two months of reduced working hours had preceded it. Depositors placed cash with banks that were not closed and wrote cheques against those deposits to pay foreign suppliers.
1971 The central bank published its survey of the economic effects of the dispute. The proportion of claims dishonoured, when the cheques could at last be presented, turned out to be quite low.
1978 The academic account that followed concluded that the economy coped because the substitutability between money and credit is high, and that deposits can be replaced by credit that does not come from a bank.
03 The Hidden Dependency
Clearing is the part of the machinery nobody looks at, because it decides nothing about any individual payment. It simply establishes, afterwards, that the money was there.
With the banks shut, that work did not disappear. It moved. Somebody still had to decide whether the paper in front of him would be good, and the only people in a position to decide were the ones standing behind the counters.
So the test applied to a cheque was whether the man taking it knew the man who wrote it. That is what the notices in the windows say when they are read as a rule rather than as a complaint. Regular customers and known clients. The test was acquaintance, and it was applied one transaction at a time, by people with no training in it and no recourse if they were wrong.
The test applied to a cheque was whether the man taking it knew the man who wrote it.
04 What Still Worked
The Banks That Were Not Closed
In the longer closure of 1970, depositors placed cash with the banks that remained open and wrote cheques against those deposits to pay suppliers abroad. The dispute was with one set of institutions, not with the instrument.
The Flown Wages
Within days of the 1966 closure some firms were reported to have opened accounts with English banks, intending to fly the wage money in. The payroll found a route before anything else did.
The Judgement At The Counter
It turned out to be good. When the accumulated cheques could finally be presented after the 1970 closure, the proportion of claims dishonoured was quite low.
05 Contested
Contested 1970
How long the 1970 closure lasted has three answers, and one study gives all three in a single paragraph.
The strike itself is dated from 1 May 1970 to the middle of October. The banks opened for the first time on 17 November. And the associated banks are described as having been completely or partially closed for almost an entire year, because two months of reduced hours came before the strike and the backlog came after it. Five and a half months, six and a half, or twelve, depending on which clock is being read.
06 The Pattern Library
1 When one retail withdrawal channel closes or fails, demand concentrates on whichever channel is left open, and the capacity of that channel sets what a depositor can obtain.
Observed: Northern Rock 2007, Cyprus 2013, India 2016, Greece 2015, United States 1933, Argentina 2001, Lebanon 2019, Worldpay 2026, TSB 2018, Afghanistan 2021, Nigeria 2023.
2 A currency replacement can require physical work on every unit of the estate before the new money can circulate, whether a modification to each cash dispensing machine or a stamp affixed to each note, so the changeover proceeds piece by piece rather than all at once.
Observed: India 2016, Czechoslovakia 1993.
3 Withdrawal limits imposed on a domestic banking system can be written to exempt cards issued outside it, so one machine dispenses under two rules according to where the card was issued.
Observed: Greece 2015.
4 Domestic payment and deposit channels can continue operating while cross-border payment routes fail, with the central bank standing in as the intermediary for payments to and from the country.
Observed: Iceland 2008, Germany 1931.
5 When the institutions that convert payment instruments into cash are closed, wages and checks already received cannot be spent, and merchants and carriers extend their own credit in place of the missing conversion.
Observed: United States 1933, Ireland 1966.
6 A public employer short of the national currency can pay wages in an instrument it issues itself, which then circulates alongside the currency it stands in for.
Observed: Argentina 2001, United Kingdom 1914.
7 Withdrawal restrictions can be imposed by individual institutions and their trade association rather than by statute, so the limit differs from bank to bank and no law governs it.
Observed: Lebanon 2019.
8 A cash withdrawal ceiling is paid only in the denominations the machine is permitted to hold, so a ceiling and a denomination rule set together decide how many notes a withdrawal is, and a ceiling has to be raised alongside the denominations that pay it when the existing notes no longer carry it.
Observed: Zimbabwe 2008, Nigeria 2023, Venezuela 2018.
9 A payment outage can hit card authorisation and merchant funding as separate faults, so acceptance at the terminal is restored while the money owed to the merchant arrives a day late under its own incident notice.
Observed: Worldpay 2026.
10 A retailer that loses electricity can go on trading by taking cash and rationing goods by hand, so the counter outlasts the checkout system that normally prices and settles the basket.
Observed: Texas 2021.
11 A systems migration can leave account records readable but wrong, including presenting one customer's account to another, so a working login is no guarantee that the balance on the screen belongs to the person reading it.
Observed: TSB 2018.
12 The size of a card processing failure can be counted twice, once on first attempts and once after the same card was presented again, and the second count can be about half the first, so part of the recovery runs through the cardholder at the till.
Observed: Visa Europe 2018.
13 A restriction on access to money can be written by purpose as well as by amount, so a balance that cannot be drawn in general becomes payable when it is used for wages, taxes or relief, and the test applied is what the money is for.
Observed: Germany 1931, Brazil 1990.
14 A deposit freeze can be paired with a transferable certificate issued against the frozen balance, so the deposit becomes a claim that can be sold before it is released, at a price the market sets rather than its face value.
Observed: Ecuador 1999, Argentina 2002.
15 A per head issue of a new currency can be distributed through the administration that issues food rations rather than through the banks, so the ration card is the proof of entitlement and the banks are used to collect the old money rather than to pay out the new.
Observed: Germany 1948.
16 When the persons under sanction become the governing institutions of a country, the prohibition reaches ordinary payments that merely touch the state, and access is restored by successive general licences written by activity, so what decides whether a payment can be made is which licence it falls under.
Observed: Afghanistan 2021.
17 One foreign currency can carry more than one price at the same moment inside a single country, the authority setting them by the use the money is put to or by the date a balance was credited, while another price goes on being made outside the official ones.
Observed: Lebanon 2019, Mexico 1982, Egypt 2016.
18 A payment abroad can be made conditional on prior approval by a committee working to a ceiling set for the whole country each day, so what a firm can pay turns on the capacity of the approval process rather than on the balance in its account.
Observed: Greece 2015.
19 Scarce foreign exchange can be rationed through the commercial banks under published guidelines, with the central bank selling only the net requirement at a daily auction and checking compliance through reporting after the fact rather than approving each payment in advance.
Observed: Iceland 2008.
20 A payment instrument issued by a bank in a country under strain can be valid and unusable at the same time, because the counterparty abroad requires a second bank to confirm it, so the trade stops at the confirmation rather than at the instrument.
Observed: Sri Lanka 2022.
21 Notes of a single currency can trade against one another at a discount according to denomination, so the same sum is worth more or less depending on which note it is held in.
Observed: Iraq 2003.
22 A compulsory conversion of deposits can be narrowed by further instruments after it is already in force, so what the measure finally takes is settled by the exceptions rather than by the decree that announced it.
Observed: Argentina 1990.
23 The administration that rations a currency held at an official price can be dismantled in the same announcement that frees the price, so the list of who may buy and the queue behind it end on the day the rate is let go.
Observed: Egypt 2016.
24 An instrument made for remitting money rather than circulating can be declared legal tender in an emergency because a stock of it already exists in small denominations, after which the office that issues it pays it out in place of coin and declines to give change.
Observed: United Kingdom 1914.
25 When the supply of the standard payment instrument runs out during a closure, people write their own in its place, and each one has to be assessed individually by whoever is asked to take it.
Observed: Ireland 1966.
Changed today: Entry 5 gained Ireland 1966, where the banks were shut, cheques could not be converted, and shopkeepers took them on their own account from regular customers and known clients. Entry 25 added, on the cheque books running out and the unofficial paper that followed being examined one at a time.