Recent progress of joint-stock and private Banks - The former encouraged by Government in consequence of numerous failures amongst the latter - The Government measure, 7 Geo. IV. c. 46 - Dissatisfaction of the Bank of England, and reclamations of the country Bankers - Bank of England establishes branches - Number, capital, circulation, and dividends of joint-stock Banks in 1836 - Subsequent failures and mismanagement - Esdailes, Foster, & Co., the Manchester and Liverpool district Bank - Comparative results of the two systems - Panic and numerous failures in 1840 and 1841 - The Walsall, St. Marylebone, Commercial, and Imperial Joint-stock Banks - Hammersley's, Wright's, Wakefield's, Kirkpatrick's - Summary of losses - Suggested improvements - Bank of Manchester - The London joint-stock Banks - General considerations - Latest official returns.

The progress of Banking brings me to a new epoch. I have now to sketch the introduction of joint-stock Banks in 1826, in consequence of numerous failures amongst the private Bankers, and a settled belief in the public mind that there could be little or no security for the due preservation of trade and property in future, unless some better machinery was devised for regulating and sustaining the secondary branches and tributary channels of the currency, than that which had been found to produce general derangement and the deepest sufferings. In the correctness of this opinion the Government fully agreed. Accordingly, proper steps were taken in the Cabinet and in Parliament to legalize the associated Banking bodies it was proposed to establish, for the purpose of extending that aid and support to the circulating medium at the various locks and feeders, from which the national industry draws its necessary supply of the artificial stream. These it was considered no longer prudent or safe to leave exclusively to the care and judgment of individuals, who had in so many instances proved too weak and inefficient to discharge the responsible functions imposed by a charge so onerous and important.

The events by which this change was brought about, were of a description every way calculated to produce a strong impression. When Napoleon was driven into exile, and peace after many years of expensive warfare was restored to Europe, the factitious and degraded nature of our English monetary system was put directly and undisguisedly to the test. Its defects subjected every class in the community, without exception, to the most serious inconvenience and considerable losses. Our commercial intercourse was no sooner renewed with the continent, than we found that the one-pound note, which we had been for some time vainly flattering ourselves upon the strength of a resolution, passed by a divided House of Commons, was worth twenty shillings, would pass current with other nations for no more than fifteen shillings. A general process of equalization therefore set in, and proceeded by stern degrees to correct and adjust the relations of our monetary and commercial affairs upon more exact principles. The Bank of England made a bold effort to stem the torrent that was to sweep away a large portion of the support and substance of the people as a thing of no reality, by keeping up its circulation for some time as profuse as ever; - but the necessity of the case was imperative - our currency had been brought into competition with those of foreign countries, and we could no longer avoid paying, the price of the depreciation, which became apparent upon a fair comparison between its nomina and intrinsic value. Wheat, which in 1813 was 6l. a quarter, fell in 1814 to 4l. 5s. a quarter; other commodities suffered a corresponding depression of prices, and between the years 1814 and 1816, no fewer than 246 Banks were swept, like so many straws, from the face of the country1. As that consummation approached the period of its fulfilment, for which the more intellectual and independent portion of the community had been labouring with zeal and talent for several years, the number of private Bankers continued to decrease, and many Bankruptcies amongst their proprietors, particularly in 1819, in 1821, and during the panic of 1825-6, when no less than eighty commissions issued against them; still further disclosed the fragile and imperfect sources those persons relied on who entrusted their property to such safe keeping.

Thus the joint-stock Banks did not rise until the losses inflicted by private Bankers had repeatedly shaken the confidence of the public and the government in their solvency. This circumstance should not be overlooked by those who may feel disposed to indulge in speculations, as to the probability of the joint-stock system becoming universal, and putting its rivals altogether out of the field.

1 Nine hundred and forty licences were issued to country Bankers in 1814; and at the end of 1816, the stamp office was called upon to supply only 752 licenses. In 1825 the number was still further reduced to 552.

The measures proposed by Lord Liverpool's government in 1826, were at first much resisted, but ultimately acceded to, and carried into full effect. The plan went, 1st, to abolish gradually all country Bank notes under 51.; 2ndly, to get the Bank of England to set up branch Banks of its own in the principal provincial towns; and, 3rdly, to part with so much of the monopoly created by its charter, as prevented the establishment of Banks with more partners than six, beyond a certain distance from the metropolis.

I need not describe how little these changes were relished when first mooted; nor detail how slowly and reluctantly the law by which they were soon made permanent, was adopted in various quarters. We have now to concern ourselves with the result alone, which gave us during the same year the act 7 Geo. IV. c. 46, entitled, "an act for the better regulating co-partnerships of certain Bankers in England." By the provisions of this measure, a Bank established at a greater distance than sixty-five miles from London, may have any number of partners; and all such partners are made liable for the whole of the debts of the company. All Banks thus founded may sue and be sued in the name of one of their public officers; and whenever judgment is obtained against such officer, execution may be issued against any member of the copartnership; every one of whom, before the Bank issues notes, must be registered at the stamp office, in a form prescribed by the Act. A public knowledge is thus insured of the names and residences of the shareholders; the places at which the Bank and its branches are established, and the proper officers to be sued.