Paper money of England and Wales

Edited by Catherine Eagleton and Artemis Manolopoulou

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An introduction to English banking history

Page three

The banking structure in 1844

Table three shows the banking structure that existed in England by 1844.

Type Banks Branches Banknote circulation
Bank of England 1 12 £18.1m
London private banks 63 0 0
London joint stock banks 5 45 0
Provincial private banks 273 71 £5.1m
Provincial joint stock banks 100 441 £7.2m
Totals 442 569 £30.4m

Table three: The banking system in 1844. Source: Crick and Wadsworth (1936).

In 1844 there were 442 different banks operating from 569 branches issuing a total of £30.4 million in banknotes. Of the £30.4 million of circulating banknotes, just £18.1 million was issued by the Bank of England. The remaining £12.3 million of banknotes came from 280 provincial banks (208 private + 72 joint stock – not all banks issued banknotes). None of the joint stock banks that issued notes could open branches in London. London private banks could have issued notes but chose not to do so. This was a very complex system and remedial action was considered necessary.

In 1844 the Bank Charter Act was passed in an attempt to place all the various banks under some form of legislative control for the first time. In particular there was a clear intention to remove all banknote issues other than those of the Bank of England. It took many decades for this process to be completed, and the last local banknote issue, from Fox & Co. of Wellington, was made in 1921. 

In the 1860s further legislation relating to company law eventually allowed banks to acquire limited liability status. This meant that in the event of a bank failure, bank shareholders were only liable to the full value of the shares they individually held. Prior to this, bank shareholders had unlimited liability in the event of a bank failure.