The Express.
London, England, 1863-08-24 00:00:00

PROGRESS OP iormr-srocir BANKING.

In the pamphlet by Mr. Henry Ayres, ma Beaks
and Basking under the two systems now existing,
of limited and unlimited liability, some interesting
records of the progress of joint-stock banking from
the close of the seventeenth century are furnished,
of which a brief abstract may be generally useful on
a subject with which the public are not usually
well acquainted. The Bank of Ragland was the
first bank founded on the joint-stock system, in the
year 16114, and fora considerable time subsequently
what were known as private banks were conducted
upon uo settled bases.

in 1704 a charter was granted to a oompany idled " The
Nina Adventurers of England," who artabllabad *MMus
into • bank, issued their own notes, and ousted an a most
extensive system of fraudulent tranudioes, which finally
terminated in s suspension of perinea. The minigatiry
panic of 1825 again id the public to the octhiciaration of i
banking, aid the privilege of issuing bask notes payable on
demand. It bad bees fated that during the war which
ocannespeed in 1793, the withdrawal et specie had mated
sea • numity of the eironlatimg medium, that the govern'
mast and the country bad berme placed in the greatest dd.
Amnia, and the Bank had " resolved muninionmly " motto
discharge the bills due as the Treasury on the 3rd of
February, 1796. In April of the same year a number of
bankers and In
met at the London Tavern, and
passed a resolution against " an alarming scarcity ot=
the City of London ;" and that " this momity p
chiefly, If not entirely, from an inmate in the emealkseeM
of the country, and from a diminution la the me-
until* discounts which the Bank of England has
thought proper to introduce into the theduct d the
establishment during the last three months." In 1826, the
first glimpse of freedom in banking began to exhibit itself.
Is this year was Fused the 7th Geo. IV. cap. 46, by which
joint-stock banks could be established as beaks of issue,
after being prohibited 118 years. Bet them baths could not
come newer to London than by a tedium al 115 miles in all
directions ; no agents of such banks were allowed in Lon-
don ; nor were they permitted " to borrow, draw, or take
op in London, or within 66 miles thereof, any sums of
money o their bills or notes, payable on asman4 or at ant
time less than Ric months from the time Pf
By this set the Bank of England was bet emt=io
establish branches in any part of England. In 1833 another
advance was made by the joint-stock hanks ; they min
allowed for the Beet time to have agents in Load=
=r • the
eof the Bank of England with regard to pa
six is samba was abolishad ; and Beak of Eng-
land notes were fiat made • legal team for all sums above
K, except at the Bask and Its breathes. It was ander Ude
act that joint-stock Make were first permitted in London.
The year 1833 was the othimeecemest of • new epoch in
joist-stock banking ; joint-stook banks were permitted to
be established within the radium of 65 miles from London.
The Loadou and Westminster Bank took the lead in this
new movement, and began business in March, 1834. The
Loudon Joint-Stock Bank, the London and County, the
Union Bank of London, and the Commercial Bank soon
followed in the train, to be succeeded by several others,
whose career has been equally narked by success; hut it
will be sufficient for the present purpose to have romans
only to those joint-stock banks that were first established
in London, under this change in the law, to exhibit the
remarkable degree of prosperity which they have enjoyed.
Taking the amount of deposit. and current accounts as the
surest evidence of public ooefidencir, the following este-
mut shows the amount held by the four oldest joint-stock
banks at each quinquennial period from 1840 to 1860:
Loudon and
Westminster Londortioint Loadonsad Quinn Bank

1860 21,911.646 11 170,9133 f,437,903 1377,766 ti,549,11111
1845.. 4506,014 i 504470 1,480,736 2,012,643 9,562,776
1850.. 3,169,644 4940.060 towns 2.914616 11•236.614
9356.. 5.1,14,648 6,241,694 4,642,430 8,368.4011 17,214,996
12130-12,434,464 10,603,656 6,652,614 10,362,703 38.732,428
The seat itest is the success of jointroek hasidr is to be
found is it. profits Taking the foss joist-stock rake is
furred to above. at the err periods, their mite pregrered
r Moos
London and London London and taro
• - - -

JoiTaiak -7;Zt7- Bank Total
Bank. Beek Bank. London. Peelle.
1840.. £48,551 .. £34.112 6.4.305 £16,118 £104,047
I 1845.. 46,344 .. 666116 .. 13,578 .. 30.419 .. 14025
1010.. 02,2132 .. 40.074 .. 141,162 .. .. 181,144
1656.. 164,407 .. 117,866 441,000 .. 130,957 .. 40,179
1440.. 171,666 .. 07,204 .. 70,643 .. 124,441 .. 413,862
The principal interroptiou to the earner of these joint-
stook beaks was during the quinquennial periodlllB4s. 50, in
which both deposits and prate greedy diminished,
owing to the potato diem., the railway
the deficient harvest of 1847 ; between 1845 and 1847, the
deposit account In the London and Westminster Bank dimi-
nished 856,2611. ; the London Joint Stock. 499,5641. ; and
the London and County, 264,6184 The Usion Bank of Lon-
don was the only one of the shove banks whose deposit as
coastal were not reduced at this period, bet exhibited an in-
erase of 497,5161., and an inertia.. of profits to the extent
of 11,1791. 1.1844 the Bank of England charter was again
renewed for a further period of ten years beyond the term
granted to it in 1833. In 1844 • new law for the goverment
of joist-stock beak', the 7th sod Bth Viet., cap. 113, was
paned. Under this law,hfter the 6th of May, 1844, so joint.
stock bank could he established except "by virtue et letters
patent," that is, by the old charter system of petitioning her
Majesty in Coruna ; such charter to be granted on the
report of the Board of Trade, when the Lords of the Com.
mates bad reported to her Majesty that the act had bean ono-
plied with, and with "the advice of her Majesty is Council."
The extraordinary meincile of Um Royal British Beak in-
duced the public to reflect a little upon the system of
charters, and unlimited liability in Waking ; bat the legis-
lature in 1857 enacted a sew basks( law, 21) sad 21 Viet.,
esp. 49, which repealed the 7 and 8 Vict.., cep. 113, re-
nerving the favourite proviso, " that no existing or future
banking company shall be registered sea limited company."
In the following year, however (1858), the 21 sad 22 Viet.,
cap. 91, which "enabled joint-stock banking companies to
be formed on the principle of limited liability," was
sad those banks that had been established under us=
liability could register under limited liability, by conforming
to certain regulation. ; but sot one e( the London joist-
stock banks established in London under the principle of
unlimited liability has registered under this act;
and it is only within • recent period that joint-stack
beaks established in Loodoe and elsewhere, have
adopted the principle of limited liability. Until
the year 1862 the law of limited liability appears to
have remained almost • dead letter ; but the accumulation
of unemployed capital and the low rate of intermit charged
by the Beak of Reiland gave an impetus to speculative
trasatetiose is sew basks that had not been equalled since
1825 sod 1826, but limited liability in banking leas now
become the rale and act the exception. By • ;Athenian-
tray Mars recently issued the number of proposed joist-
stook basks • red under limited liability in 1862 wee 37,
with • somiri capital of 33 919 ; of this number only
two an returned as "dissolved ;" how ninny more will come
under this designation is a garden for time to determine.
One of the most remarkable hots commend with our in-
creased ootomeroe is shown is the movements of the precious
metals. Unfortunately our statistics are not complete on
this subject for several yeass after the discovery of gold ;
but it is well known that this discovery has led to • very
great isersese in the metallic eirealatioe of the eounti7.
From 1847 to 1851, the year in which
_gold was discovered em
Australia, the wriallis •• the Fail" Mist .aa 15'61416334
from 1851 to 1856 the amount caused was 39,858,2211. ; and
from 11356 to 1861 it smonoted to 20.052.2711., making •
total at 74591,1251., of which 59.910,4912 have been coined
skies the discovery of gold ie Australia—so amount that ex-
ceeds by 2.7 times the entire piper circulation of Eogland and
Wales, or more than double the &mount of the entire beak.
note circulative of the Usited Kingdom, which averages
about 37.000,0001., being only equal to the amount at which
it stood in 1847.