Abstract
A tontine is a shared fund in which surviving investors benefit financially from the deaths of other members. Since the mid-seventeenth century it has been used variously across Europe as a tool to raise state revenue, as a private investment tool, and as a method to raise capital for building projects. In nineteenth-century Ireland, the tontine developed to include a mutual aid scheme directed at the country's working classes and poor. This form of tontine existed within a wider sphere of microcredit and microfinance instruments – including loan funds, pawnbrokers and Mont de Piété banks - directed at Ireland's poorer classes. These provided services to a section of Irish society neglected by the country's banks and other financial institutions. The mutual aid tontine was therefore very much an indigenous financial instrument developed for the needs of Irish society. Like the Irish themselves it travelled. The scheme also proved to be popular in England during the nineteenth century, predominantly in areas of high Irish immigration. This article argues that this was as a direct result of the transplantation of Irish communities and support structures into England.
The scholarly debate around the tontine in Ireland has been both asymmetrical and sparse. The three government-operated tontines of the 1770s have received the bulk of the (limited) attention, while local private tontines used to fund building and infrastructure projects and small mutual aid tontines established by Friendly Societies and other benevolent groups, have suffered from a deficiency of investigation. 1 The lack of attention paid to the tontine in Ireland has not always been for a lack of trying, however. Phillip Hellwege, when planning his excellent edited collection dedicated to the legal history and future of the tontine, intended to include a chapter on Ireland. Yet, when preliminary research was unable to ‘trace any legal discussion of tontines’ in the country, it became necessary to drop the inclusion. 2 This is not an isolated problem, with John Campbell also highlighting a lack of information when it came to his investigation of tontine and benefit society records held in the National Archives of Ireland and in the Registry of Friendly Societies. 3 While high level details on privately operated Irish tontines - the date of establishment, society address and the name of principle officers/auditors - still exist, comprehensive files linked to the low-level operation of the majority of these schemes do not. 4 This absence can be traced to the explosion which rocked the Public Records Office of Ireland on 30 June 1922. 5 As a result, seven centuries of Irish documented history, including detailed records of Irish tontines, were lost. 6 This may be one reason why the historiography of the tontine in Ireland has been weighted towards the government tontines of 1773, 1775 and 1777, with their associated records housed in London. 7
This article aims to aid in addressing the lopsidedness of the current debate by detailing the tontine's development in Ireland into a mutual aid model during the nineteenth century and place this development within the wider financial context of the island. It will do this through an investigation into three aspects of this form of tontine. Firstly, it will consider the way the scheme developed in Ireland and how it operated. Central to this was the packaging of the tontine as a yearlong financial instrument incorporating a short-term insurance policy. This provided subscribers with a sickness benefit and/or burial costs, or access to a benevolent fund when required. Each Christmas any residual funds were then shared among the remaining subscribers who had not drawn down on the policy during the year. This was the tontine function of the model. Secondly, this article will demonstrate that the concept of the mutual aid tontine, like the Irish themselves, migrated. Examples of mutual aid tontines can also be found in England, predominantly in Merseyside, an area of long-established Irish immigration. These began to emerge during the 1840s, concurrent with an increase in Irish migration driven by the Famine, and proved to be a popular financial instrument. This article will argue that the emergence of mutual aid tontines in England was a direct result of the transplantation of Irish communities and support structures into that country. This ties in with the work of Michael Mullan, who has detailed the development of Irish American associationalism in Philadelphia. Mullan concluded that groups and societies took their ‘inspirational universe for a civic Irish Philadelphia’ from a model ‘first established in Ireland, interned as social learning in the emigrating Irish, and was reconstituted in Irish Philadelphia’. 8 The same can be said for the Irish in Merseyside.
Finally, there will be a consideration of the context in which mutual aid tontines developed in Ireland. These were modest sized member-driver associations which developed the tontine into a short-term insurance instrument with a yearly division of surplus funds. This represented one of the most significant evolutions of the model since Lorenzo de Tonti had made his original proposal in 1653. The conclusion as to why this happened in Ireland, is that this form of tontine developed as part of a wider network of microcredit and microfinance instruments directed at the Irish working classes and the poor. The network was comprised of aid offerings made by Friendly Societies, trade groups and unions, community loan funds which offered small loans at interest to the poorer classes, and pawnbrokers and Monts de Piété offering pawn and loan facilities. These institutions and instruments, including the tontine, filled a void of banking activity which was slow to respond to the needs of the Irish working classes and poor during the nineteenth century.
Tontine? Insurance? Both?
Let us deal with the elephant in the room before we progress any further; can we really call this short-term insurance instrument a tontine? The short answer is yes. The long answer is as follows.
In its simplest historical form, a tontine is as a shared investment fund with benefit of survivorship. Historically, in return for the price of a subscription, subscribers received an annuity payment secured against a nominated life. Payments were set at an initial interest rate and taken from a pot that was divided among the scheme's subscribers. As nominees died, their associated subscribers retired from the tontine, and the annuity payment linked to them was redistributed among the remaining active subscribers, permanently increasing the yearly interest rate and dividend. Subscriber numbers in large government tontines in Ireland, England and France ran into the thousands, and nominees were often split into separate classes depending on their age. 9
On the surface, the small mutual aid tontines lacked many of these structural characteristics, but they did have the benefit of survivorship. In exchange for a weekly subscription, subscribers were granted a defined benefit, usually sickness and burial cover or access to a benevolent fund. The tontine function of the scheme was derived from the practice of dividing any remaining monies among surviving subscribers each Christmas. The scheme was then wound up, with a small amount kept back to cover the costs of restarting the tontine, usually equivalent to one subscriber's benefit, and the process was renewed in the next year.
The peculiarity of the mutual aid tontine, when compared to a more traditional tontine, was derived from its short-term nature. While there are examples of tontines being used to raise a fund to invest in other financial instruments having a lifespan of five to seven years, any shorter was atypical. 10 In general, tontines were protracted financial instruments. It was not unusual for seventeenth- and eighteenth-century tontines to run for close to a century, by which time the original subscriber was no longer the beneficiary. Operating one for the period of a year on a rolling basis was therefore highly innovative. So, while the Irish mutual aid schemes may not have had a traditional tontine structure and had instead been developed into short-term insurance-type instruments, they still possessed a tontine function.
Importantly, in Ireland, these mutual aid schemes were known by their organisers, subscribers and by the wider Irish populace as ‘tontines’. Schemes congruous with these Irish tontines existed in the form of ‘dividing’ Friendly Societies in Scotland, but no reference to these ever being called ‘tontines’ can be located. 11 In Wales, private tontines directed as building projects existed from the 1790s, but it was another century before one can identify any form of mutual aid tontine society; this is more than 60 years after the first Irish scheme was established. 12 In England, the mutual aid tontines existed alongside other ‘dividing’ societies, but it was predominantly in areas of high Irish immigration that these were termed as ‘tontines’; on which more will be said later in this article. The Irish therefore appear to have been the earliest adopters of the term ‘tontine’ to describe these mutual aid schemes. It is suggested that this was due to the popularity of the Irish government tontines of the 1770s. These represented the most successful government tontines operated in Britain and Ireland and provided large swathes of the Irish population with an understanding of the model. Identifying these, albeit far smaller, short-term, mutual aid instruments with a benefit of survivorship as ‘tontines’, was therefore logical.
Mutual aid tontines: Structure, membership and operation
Mutual aid tontines existed in Ireland among a plethora of other small local schemes offering funeral and sickness benefits which were administered by a mixture of Friendly Societies, benevolent societies and religious groups. These were member-driven groups with a preference for limiting subscriber numbers in order to curb occurrences of fraud and reduce the administrative burden. 13 Sickness and burial groups were common across Ireland, with the Register of Friendly Societies identifying 414 such societies in existence between 1806 and 1844. 14 These were not always tontines, but at least 92 mutual aid schemes which specified ‘tontine’ in their names were registered across the years 1833–1877. 15 It is likely that many more schemes existed but did not specify ‘tontine’ in their title, or which did not undertake the formal registration process. 16
British Parliamentary Papers, which include reports of Registrar of Friendly Societies in Ireland, are an important source of information on Irish mutual aid tontines. While these still have their limitations, and do not elaborate on the exact operational details of the tontines, they do provide an overview of membership numbers, subscription figures and sums paid out. They also allow us to identify that while mutual aid tontines existed across Ireland, they had a concentrated presence in and around Dublin. 17
To take the year 1869 as an example, 224 mutual aid schemes existed in Ireland, with 42,703 members and a geographical spread which covered the whole island. 18 Thirty-four of these schemes identified as tontines and had a combined membership of 1,704. 19 Mutual aid tontines therefore represented around 15 percent of the total market in these types of schemes in Ireland at this time. The bulk of these small local tontines were religiously affiliated, taking their name from a saint/religious figure or were linked to linked to a local parish. Of the 92 which were registered between 1833 and 1877, 63 fell into this category. Others were linked to trades, such as the Dublin Mechanical Tontine, the Ropemakers Tontine, and the Irish Industrial Tontine. While others appear to have had a particularly patriotic hue, for example, the Celtic Tontine and the Harp and Shamrock Tontine. 20
It is important to note that the mutual aid tontines were a financial instrument directed at a different class from previous tontines in Ireland. When the first government tontine was offered in Ireland in 1773, a single subscription was priced at IR£100, a sum which excluded most of Irish society from participating. 21 Meanwhile, private tontines directed at funding building costs had focused on the erection of grand townhouses and members only meeting rooms. 22 Mutual aid tontines by comparison had memberships comprised of mainly skilled and unskilled workers. 23 These were drawn from across the professions, although some organisers did prohibit certain trades from joining. Being a ‘slater’ (roofer) was, for instance, deigned too dangerous a living, while it was felt that tailors and shoemakers could not be trusted take time off when they were sick. 24
As so many of the schemes were linked to religious groups, many were sectarian in their organisation. The general stance of Protestant mutual aid tontines was only to admit Protestants. Although there were exceptions, with the secretary of one Protestant tontine in Dublin remarking in 1874, ‘[w]e don’t keep out any man on account of his creed or occupation. I often hear of societies refusing men on account of tailoring being their trade, but there's more talk in it than anything else’. 25 Catholic societies, meanwhile, did not stipulate that Protestants could not join, but they did require all members to observe many Catholic customs or be subject to fines. 26 Despite these divisions and the omissions of some trades, the Irish mutual aid tontines were united on one principle: they were a financial instrument for Irish workers and catered for the working classes and the poorer members of Irish society.
Insurance cover or yearly windfall?
Ostensibly the mutual aid tontine was an insurance policy, with the tontine function being an additional benefit. That view has been challenged, however. Rather than providing its members with insurance, with the potential yearly payout as a secondary feature, Mullan states that the ‘primary financial aim’ of these schemes was actually the reverse. The contention is that, rather than the draw of support at times of ill health or death, investors were being pulled towards the scheme in anticipation of the annual windfall. 27 Mullan provides evidence, in the form of spending data from Irish mutual aid tontines, which demonstrates that a majority of tontine funds were being directed at the yearly dividend, rather than providing members with a sickness/death benefit. This is collated from an 1874 report on Irish Friendly Societies presented to the British parliament and demonstrates that by that time, 67 percent of the total funds held by these societies were being directed at the Christmas division, 12 percent towards sickness benefits and 11 percent to death benefits. 28
This reading of the situation is not one confined to modern observers. Nineteenth-century commentators in Dublin also raised concerns around the operation of mutual aid tontines. A central fear was that young subscribers were shopping around for schemes which contained the fewest old men. These would pay out less during the year and at Christmas would retain a larger portion of funds. This would leave more to be divided among remaining subscribers in relation to the size of contributions. The worry was that such a system would leave the ‘old men at the mercy of the young’. 29 It is worth noting that by the second half of the nineteenth century, Ireland was home to a prematurely aged population. This was the result of the famine which had reduced the number of infants and young people in the country, and by the subsequent emigration of Ireland's younger generations. Figures from the 1850s onwards demonstrate that those who emigrated were overwhelmingly young. Of the more than 3.7 million men, women and children who left Ireland between 1851 and 1900, only 0.67% were over the age of 60. The premature ageing of the population was also met with increasing sickness, driven by post-famine conditions, and declining life expectancy. For those hunting for a tontine made up of younger healthy members who would not withdraw from the fund during the year, this must therefore have been a challenge. 30
Concerns over this shift in how subscribers viewed the mutual aid tontine were such that the Registrar for Irish Friendly Societies, William Francis Littledale, proposed in 1872 that scheme organisers should establish a reserve fund which would be ringfenced from the main tontine fund. This separate pot was to be used to renumerate the contributions made by a scheme's older members. Some organisers implemented this measure, and from the late 1870s the Register of Friendly Societies included an additional column headed, ‘Statement made as to the provision for old age’. 31 This specified an additional amount collected from subscribers to be directed towards older members but was by no means a practice undertaken by every tontine scheme. There were also some organisers that could see the benefit of removing the yearly annuity altogether, but the idea proved unpopular with wider memberships and the Christmas division remained. 32
As an example of how significantly payouts could vary, we can return to the records of 1869. The St. Andrews Tontine, a sickness and burial scheme in Dublin, had received £36, 16 s, 10 ½ d in subscriptions during the year, and by Christmas had 18 members who were entitled to a dividend. 33 Over the course of year, organisers had paid out more than £30 to members to cover sickness and burial costs. This meant that when it came time to divide what was left in the fund, those who had not withdrawn anything during the year were left to share £6, 12 s, 6d. This gave each member just short of 34d, around £31 in today's money. 34 The Emerald Isle Tontine, meanwhile, had 22 surviving members by Christmas 1869. Subscribers had paid in more than £75 in subscriptions, and organisers had paid out just £17, 17 s, 7d in benefits. After operational costs this left £43, 19 s, 7d, to be shared among its members, netting each just under £2 (around £185 today). 35 It would of course be helpful to know how many members had started the year with these tontines and how much each member had subscribed across 1869, in order to assess if this was a sound investment or not. Unfortunately, the information included in the register only provides the end of year details. Despite this, it does demonstrate how those schemes which paid out less during the year, with fewer members requiring to withdraw sickness and burial benefits, offered its subscribers a larger dividend at the end of the year.
While more research is required around per capita subscriptions and payout figures, the available historical evidence suggests many members were joining tontines more for the anticipation of a yearly windfall than for assurance against hardship from illness or death. The shift in individual motives away from mitigating risks and towards maximising the share of the tontine payment points towards mutual aid tontines' original aim being subverted, as members displayed a tendency to focus more on prospective gain than avoiding potential loss.
A short note on temperence tontines in Ireland
Alongside mutual aid tontines in Ireland, there existed a limited number of ‘temperance tontines’. These were established as an attempt to financially incentivise sobriety, with payment of tontine annuities linked to subscribers’ abstinence. At least five temperance tontines were in operation in Dublin between 1839 and 1862, with another in Portlaw, County Waterford from 1838, and one in County Wexford. 36
Temperance tontines, like the mutual aid tontines, had a one-year term, but had no insurance instrument built into them. The premise was simple, subscribers were required to make a regular payment into the fund, and, if come the end of the year they had maintained their sobriety, they received a share in the accumulated total. How much they got depended entirely on how many other subscribers had enrolled in the scheme, how many had managed to abstain from alcohol, and of those who had failed, how much they had paid into the fund by the time they fell off the wagon.
In many ways, these schemes were the antithesis to the cultural identity of Dublin Friendly Societies, many of which were deeply associated with alcohol and often held their meetings in public houses. 37 Their emergence was concurrent, however, with an increase in Friendly Societies which were defined by their abstinence stance after 1839 and can be viewed within the wider Irish Temperance movement which was gaining ground in the mid-nineteenth century. 38
The earliest temperance tontine emerged from the County Waterford town of Portlaw in 1838. Constructed around the hub of Malcolmson and Son's cotton mill, the site had been heavily developed since industrialist David Malcolmson and his family had arrived there just 13 years earlier. Inspired by the development of planned industrial villages in Scotland and England, the Malcolmsons did the same in Portlaw. The family constructed accommodation to attract workers and provided schools for children and reading rooms for adults. 39 In return, the Malcolmsons attempted to socially control Portlaw inhabitants and imported English Victorian virtues prevailed. No employee was allowed to smoke when their employer was present, all female employees were given a brush and a comb so that they might always look presentable, and any girl deemed to have acted improperly was dismissed from her job. 40 In this environment, it is no surprise that temperance was also promoted.
With a membership of 500 at its peak, the Portlaw Tontine Club was a popular draw. Subscribers were required to make a weekly payment of sixpence throughout the year. No money was withdrawn during this time, and if any member was found to be ‘intoxicated or of giving or taking a drink in a public house within four miles of his own residence’ they forfeited their interest. At the end of the year the fund was divided among the members who had managed to abstain over the previous twelve months. Some caution was, however, shown by organisers, who, fearful that their abstinence would be tested when they were paid the annuity, required the sober members to leave five shillings of their dividend on deposit. 41 A week later if they were still sober, they were paid the sum.
The wider impacts of temperance tontines remain difficult to quantify due to a lack of surviving records. The assumption made by the Portlaw Tontine Club, that members would immediately test their resolve at local public houses upon receiving payouts, does, however, indicate the challenges these schemes faced. Though novel in concept, temperance tontines were a minor tool in attempts to fundamentally reshape cultural attitudes and drinking behaviors in Ireland. While these were not an exclusively Irish form of tontine, with a ‘Tee Total Tontine’ established in the Ayrshire village of Dalry in 1838, they were far more concentrated in Ireland, and highlight a creative attempt to tackle social problems using the tontine model. 42
Irish mutual aid tontines in England
The 1862 Report of the Registrar of Friendly Societies in England listed every Friendly Society then registered in the country. This included benevolent societies, sick and burial societies, insurance societies and fraternities such as the Odd Fellows. Also included were a number of mutual aid tontines of the type found in Ireland. Fifty-seven of these were recorded in the register for 1862, with all but one located in the Merseyside area of Lancashire, with a particular concentration in Liverpool. 43 Records from 1863 followed a similar pattern, with 57 out of 58 tontines located in and around Liverpool (interestingly the one tontine which was not, was based in London but was named the Mersey Docks Benefit Tontine). 44 This relationship between these small local tontines and Liverpool continued in future reports. The 1866 report cited 56 tontines all located in the Liverpool area, while the 1874 report provided details on 36 similarly located tontines. 45
That the mutual aid tontine existed in Liverpool and its surrounding areas is significant. Lancashire, and Liverpool in particular, was a popular destination for Irish immigrants. Prior to the Irish Famine of 1845–1852, movement from Ireland to Liverpool was steady, with 49,639 Irish-born already resident in the city by 1841, representing 17.3 percent of the total population. This increased throughout the decade, peaking in 1851 with 83,813 of a population of 375,955 born in Ireland (22.3 percent). Numbers then decreased gradually over the remaining decades of the nineteenth century, and by 1901, 45,673 Irish born immigrants lived within a total Liverpool population of 684,958 (6.7 percent). Despite the drop in new immigration from Ireland into Liverpool, by the late nineteenth century the ‘Liverpool-Irish “colony” [was] some 150,000 to 200,000 strong’. 46
John Belcham has argued that the Irish in Liverpool are best approached ‘through comparison with [other] large migrant communities overseas, enclaves within which “ethnic” culture was not only retained but rewarded’. 47 He makes the point, however, that there were important differences between Irish immigrants and many of those from other countries. The Irish community in Liverpool did not stand apart because of dietary requirements, or due to any dress or linguistic conventions. Instead, ‘Irishness’ was its own cultural and political project driven by entertainment which provided a constructed image of old Ireland; an Irish culture distinct from English culture; and a dedicated Press aimed at the Liverpool Irish. The growth of Irish societies was also important in reinforcing Irishness. Organisations such as the Catholic Young Men's Society, which promoted ‘national regeneration through rehabilitation of the Irish from the stigma of stereotype and caricature’, became hubs for sections of the Irish community in Liverpool. 48 Alongside these groups there sprang up a plenitude of Friendly Societies and benefit and benevolent clubs from the middle decades of the nineteenth century. 49 Included within these were mutual aid tontines based on the Irish model.
These tontines, just as their Irish counterparts did, existed within a framework of small local funds directed at providing burial costs, sickness benefits or access to a benevolent fund. They were hailed by the Liverpool Press as promoting ‘habits of industry and frugality’ and presented subscribers with a means of improving their lives. 50 They were particularly important for providing an alternative to the unregulated sickness and burial schemes which left Irish immigrants at the mercy of unscrupulous weekly collectors, and which were multitudinous in Merseyside. 51 The organisation of mutual aid tontines in Merseyside mirrored that which existed in Ireland. Many were religiously affiliated, such as St. Patrick's Tontine and St Anthony's Catholic Sick and Burial Tontine, with explicitly Catholic and Protestant schemes in operation. 52 Others were linked to trade and industry, such as the Mechanics Tontine and the Sailmakers Tontine. While others were unmistakably imbued with Irish patriotism, such as the Irish Sons of Freedom Tontine and the Hibernian Munificent Tontine.
As already noted, these tontines existed within a landscape of societies, groups and fraternities providing mutual aid and were congruous with ‘dividing’ Friendly Societies. It was, however, largely in Ireland and English areas of high Irish immigration that these were promoted as ‘tontines’.
53
It is therefore a credible conclusion that the existence of mutual aid tontines in this area of England was as a direct result of Irish migration. This aligns with Mullan's work on Irish American associationalism in Philadelphia in which he states: the Irish of Philadelphia relied primarily on what cultural heritage and social learning was passed on from a history of associationalism in old Ireland: the workingman's tontine, for example, or town and rural Friendly Societies and all types of fraternal and civic societies in all regions of the native nation
54
Why Ireland? The mutual aid tontine within a network of microcredit and microfinance
This research supports a hypothesis that the mutual aid tontine developed in Ireland within a wider sphere of financial activity carried out by Friendly Societies, loan fund organisers, pawnbrokers, and Mont de Piété banks. These created a network of microfinance and microcredit instruments which were directed at the Irish working classes and poor. These instruments emerged in response to an Irish banking sector which, in the early to mid-nineteenth century, conducted virtually no business with two-thirds of the population. 55 Joint stock banks did not begin to offer small loans or interact with the poor until the 1860s. 56 Rural areas and small towns remained without banking facilities. Even in those areas where access to a bank was enabled, they were largely the preserve of middle- and upper-class members of the community and did not cater to the needs of the poorer classes. 57
The reasons as to why the banking sector eschewed this section of Irish society are unclear. The academic consensus appears to be that Irish banks ‘held ample savings to have financed substantial rural lending to the poor’, but they did not. 58 Some contemporary writings suggest that the poor were simply ignorant of money and finance; although as Aiden Hollis and Arthur Sweetman have stated ‘the extensive lending activities of [Irish] loan funds show that a large proportion of the poor were financially active and able to use financial intermediation’. Another hypothesis as to why banks did not engage with the poorer classes in Ireland ‘is that the marginal product of capital in the hands of the poor was too low for them to borrow profitably from the banks at “reasonable” rates’. Again, Hollis and Sweetman question this, drawing our attention to ‘the activity of pawnbrokers and moneylenders who were ubiquitous’ in nineteenth century Ireland. 59 The demand for access to credit and banking instruments from the poorer classes therefore clearly existed in nineteenth-century Ireland.
In response to the lacuna, a proliferation of loan funds offering credit at competitive interest rates catered to a market snubbed by banks. Hundreds of independent loan fund societies existed in nineteenth-century Ireland. These were popular across the country but were less prevalent ‘in the most developed areas, such as Dublin, and the least developed areas, such as the west coast’; interestingly they are completely absent from Belfast and Dublin from the 1850s onwards. 60 In those areas of middling development, particularly in rural Ireland, the loan fund became an important source of financial support. 61 The funds were established via an initial charitable donation and loans were intended to be ‘reproductive’. This meant that borrowers would use the money to improve their condition, possibly by investing in new agricultural stock. Records show, however, that loans were often used to cover rent or service other debts. 62
Loan funds were often linked to causes and emerged at times of crisis. For example, responding to famine in 1822, a loan fund was established in London for the aid of those in the hard-hit areas of Munster and Connaught. Subscriptions were drawn from Ireland, London, and as far afield as India and the remote island of St. Helena in the South Atlantic Ocean. 63 Friendly Societies also organised loan funds, with 102 registered Friendly Loan Fund Societies operating in Ireland by the last decade of the nineteenth century. 64 These schemes therefore offered credit at competitive interest rates in a market which was not being served by banks. Hundreds of these microcredit societies appeared across the country, and by the mid-nineteenth century as many as 20 percent of Irish households were utilising their services. 65
An even more popular way to access credit in nineteenth-century Ireland was through private pawnbrokers. These were ubiquitous in the country, with almost one pledge per person recorded across Ireland during the century, with numbers hitting 16 pledges per person in Dublin City during the 1840s. 66 In the main, pawnbroker services were utilised by the poorer classes, with more than 80 percent of loans made between 1830 and 1860 being less than 2/6 d in value. 67
While pawnbrokers were popular among the Irish working classes and the poor, the system was one of oppression upon those using the service. Reform was urgently required, but never came. Attempts at this were made in early 1840s, with the introduction of a parliamentary bill which sought to limit the interest, fines, and administrative charges that could be levied against borrowers in 1843. The bill made it to the committee stage but pressure from the Pawnbrokers Association made sure it it did not progress beyond this. Instead, Irish pawnbroking continued to be regulated by laws which had been enacted in the 1780s and which remained unaltered until the 1960s. 68
That the Irish system of pawnbroking had become so oppressive was a symptom of its development. As had been the case in Britain, the sector in Ireland had prospered as a private money-making enterprise. This stood apart from European convention, where pawnbrokers on the continent had largely developed as a charitable enterprise in the form of the Mont de Piété; an institution which offered lower interest rates, increased leniency in the borrowing terms, and which directed any profits into charitable causes. 69
Taking their inspiration primarily from the French model, a short-lived movement to establish Monts de Piété in Ireland began to emerge in the late-1830s. A report from 1840 detailed a preference for this type of lending institution over the ‘common pawnbroker’ and argued that Monts de Piété were effective in ‘relieving the poor from those exorbitant charges, and restoring to the same class from which the profits are derived the overplus, in the shape of some local charity, such as fever hospitals, or grants for the reduction of provisions in time of scarcity or want of employment’. 70 Like the loan fund, the Mont de Piété assisted the poor in their times of need and filled the gap left by inadequate access to banking services.
The Mont de Piété was fleeting in Ireland and failed to penetrate working class life in the same manner as private pawnbrokers had. Following the establishment of the first Irish Mont de Piété in Limerick in 1837, a few more emerged in the country, but all had ceased business by 1853. 71 This failure, Eoin McLaughlin argues, was due to ‘[h]igh costs and insufficient income, coupled with high levels of competition, [which] essentially pushed the [Mont de Piété] out of business in Ireland’. 72 He states that the same conditions which had led to the success of Monts de Piété in France were lacking in the Irish model, with organisers failing to recognise the competition which existed from traditional pawnbrokers. The sector undoubtedly had severe shortcomings, but pawnbroking was entrenched in Irish society and could offer ‘liberal interest’ rates which ‘enabled them to provide a better service to the poor’. 73 Replacing an institution which the Irish working classes and poor had come to rely on with a new model, even one which would be beneficial to them, proved to be a step too far.
While the Irish system of pawnbroking was far from perfect, and the Mont de Piété system was short-lived, these, alongside the loan funds, were part of a network of microcredit instruments, operating within a sphere of microfinance, directed at the Irish working classes and poor. McLaughlin has termed the Mont de Piété system an ‘experiment in banking the poor’, which would ‘reduce the cost of borrowing for the poor and also fund a social welfare network’. 74 Hollis and Sweetman, meanwhile concluded that Irish loan funds ‘were an innovative indigenous response to the failure of market institutions (banks) to meet the demand for credit by the poor’. This article argues that the proliferation of small local mutual aid tontines in Ireland inhabited the same world of microfinance and led to the proliferation of a financial model which combined an insurance instrument with a modified tontine, and which represented the first form of tontine aimed at the Irish working classes and poor.
Conclusion
This article has placed the mutual aid tontine within a sphere of financial activity carried out by Irish Friendly Societies and within a wider network of financial offerings directed at Ireland's working classes and poor during the nineteenth century. By packaging insurance alongside the potential for a yearly windfall, Irish mutual aid tontine organisers created a very popular financial instrument. These appealed to the Irish working classes and poor, groups which had been left without access to adequate banking provision, and provided insurance which met the needs and constraints of subscribers. There is, however, much to suggest that the original intent of these schemes became subverted, with some participants being drawn by the yearly payout rather than the insurance offered.
Despite this, or perhaps because of it, the mutual aid tontine was favoured by the poorer classes in Ireland. It was embedded in native Irish communities to such an extent that when they moved, so did the tontine. As this article has demonstrated, mutual aid tontines existed in England. These were mainly in areas of high Irish immigration and indicate that immigrant groups were drawing on cultural knowledge to establish this form of financial support. Further research into the Irish mutual aid tontines that operated in Merseyside would deepen our understanding of the role they played in constructing Irish identity and community in the area.
In transforming the traditionally long-term tontine into a short-term insurance instrument, Irish organisers redefined how the scheme operated. Mutual aid tontines provided financial support at subscribers’ times of need, with the additional benefit of the Christmas division, and represented the first tontines in Ireland directed at the working classes and poor. In uniqueness and socio-economic purpose, the development of this form of tontine in Ireland therefore stands apart from tontines previously operated on the island.
Footnotes
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The research underpinning this article was undertaken during 2022. This was during a year spent at UCD, funded by the Royal Society of Edinburgh (grant number 1878).