THESE banks cannot have more than ten partners. They are hanks of deposit, of loan, and of discount. As hanks of deposit they usually allow interest on both deposits and balances of current accounts, and charge a commission on the amount of the transactions. In commercial or manufacturing districts, their advances are usually made by way of discount; in agricultural districts, frequently by loans. They remit money by issuing bills or letters of credit on London, or they direct their agents to make payments to bankers or other parties resident in London. As banks of circulation, they have at various times occupied a large portion of public attention, and have been the subject of much legislation.

Those bankers who wish to issue notes, or unstamped bills of exchange, must take out a licence, which will cost 30, and must be renewed every year. They may reissue any notes not above the value of .100 as often as they think proper. And should any of the firm die or remove from the business, the notes may be issued by the remaining partners. But they cannot be re-issued by a new firm which does not include any member belonging to the firm by whom the notes were first issued.

If the half of a note be lost or stolen, a banker cannot be compelled to give a new note in exchange for the remaining half. But if it can be proved that one half of a note is burnt, or otherwise destroyed, then the holder may perhaps recover the note from the banker.

In such cases, the bankers always pay the value of the note on receiving a respectable indemnity.

Bankers may be compelled to pay whole notes that have been lost or stolen, provided the holder has given actual value for them.

The stamp duty on country notes is as follows:-

s.

s.

s.

d.

Notes not exceeding

1

0

........

0

5

each.

Exceeding

.

1

0

and not exceeding

2

0

0

10

,,

Ditto

.

.

2

0

,,

,

5

0

1

3

,,

Ditto

.

.

5

0

,,

,,

10

0

1

9

,,

Ditto

.

.

10

0

,,

,,

20

0

2

0

,,

Ditto

.

.

20

0

,,

,,

30

0

3

0

,,

Ditto

.

.

30

0

,,

,,

50

0

5

0

,,

Ditto

.

.

50

0

,,

,,

100

0

8

6

,,

Country banks are allowed to compound for the stamp duties on their notes, at the rate of three shillings and sixpence per cent. upon the half-yearly amount in circulation, and to include, on the same terms, their bills drawn on London at twenty-one days after date. But whether a country banker compounds for the stamp duties or not, he must make a return to the Government of the amount of his notes in circulation every Saturday night. These returns are consolidated, and the result published in the "London Gazette."

I am not aware that we have any authentic details of the rise and progress of country banking in England. It is generally understood that very few country banks existed previous to the American war-that they rapidly increased after the termination of that war-that they received a severe check in the year 1793, when twenty-two became bankrupt, and that they increased with wonderful rapidity after the passing of the Bank Restriction Act. Since the year 1808 every bank that issues notes has been compelled to take out an annual licence-and since 1804, the notes have been subject to a stamp duty. This duty was increased in 1808, and again in 1815.

In the year 1775 bankers were prohibited by Act of Parliament to issue notes of a less amount than 20s. And in 1777 they were prohibited to issue notes of a less amount than 5. But after the passing of the Bank Restriction Act in 1797, the last restriction was removed, and the country banks commenced issuing notes of l and .2. And in 1822 the permission to issue such notes was continued until the expiration of the Bank Charter in 1833. But after the memorable panic of 1825, the Government refused to issue any more stamps for notes under =5, and it was enacted that all such notes already stamped should cease to be issued by the bankers after the year 1829.

The speculations that preceded the panic of 1825 were attributed by the Government of the day to a wild spirit of speculation fostered by the country banks. To guard oat the recurrence of similar evils, not only were notes under 5 abolished, but two other measures were introduced. Banks of issue, consisting of more than six partners, were permitted to be formed at a greater distance than sixty-five miles from London : and the Bank of Eng-land was induced to open branches in the provinces.

And here it will be proper to notice a peculiarity in the county of Lancaster, and particularly in Manchester and Liverpool. In these places there were no country notes, and but a small proportion of Bank of England notes. The circulation consisted mainly of bills of exchange, which passed from hand to hand like bank notes, having the endorsement of all the parties through whose hands they had passed. In Liverpool large notes were required to pay the duties at the Custom House; and in Manchester small notes were required to pay wages. These were obtained from the Bank of England in London: hut the transactions between manufacturers and dealers were transacted by bills of exchange; and as these bills were all made payable in London, bank notes were not required in Manchester and Liverpool, even for the payment of these bills.

The measures adopted by the Legislature in the year 1826 led to the establishment of branches of the Bank of England in Manchester and Liverpool. From this period the circulation of bills of exchange declined, and was superseded by Bank of England notes. This was accelerated by the circumstance that the joint-stock banks formed in these places did not issue their own notes, but those of the Bank of England. This establishment had offered to discount for the joint-stock banks at 1 per cent. less than they charged to the public, and the joint-stock banks thought it more for their interest to obtain the notes of the Bank of England on these terms than to issue notes of their own. The circulation of the country now consisted of notes of the branches of the Bank of England, notes of the joint-stock banks, and notes of the private bankers; and as many of the weak private banks had ceased to exist, and as others had merged into joint-stock banks, and as all notes under 5 were abolished, it was supposed that the country had now obtained the advantage of a secure circulation.