The Bank of England established branches in the year 1826, at the suggestion of Lord Liverpool, in order to extend to the provinces the advantage of a secure circulation. This was considered the grand desideratum at that time, in consequence of the numerous failures that had recently taken place among the country bankers; and was effected with the greater facility, in consequence of the establishment of joint-stock banks, who made arrangements for issuing Bank of England notes.
The branches being not merely banks of circulation, but of deposit, of discount, and of remittance, they came into competition with the country bankers. This, in some cases, reduced the charges previously made on banking transactions. As banks of discount, they charged the same rate which was charged at the London office-a charge usually below that of the country banks. As banks of remittance, they granted letters of credit at a shorter term. As banks of deposit, they charged no commission. But, on the other hand, they allowed no interest on the balance, and they allowed no account to be overdrawn; and they would not receive from their depositors any country notes unless the banks had previously opened an account with them, and made a lodgment to meet their notes.
The branches are all subordinate to the parent establishment. They carry on the ordinary business of local banking, and of London banking as well, in addition to issuing bank notes and bills. Cash for their notes can be demanded only at the particular branch which has issued them, or in London. The accounts are balanced every night, and the balance transmitted to town daily, together with particulars of all the transactions of the day. One of the most important public services performed by the branches is the remittance of the revenue, which is paid into them by the collectors, and credit is then at once given to the exchequer account in London.
The bank has branches at Birmingham, Bristol, Hull, Leeds, Liverpool, Manchester, Newcastle, Plymouth, Portsmouth, and one in London, called the West-end Branch.
It had originally branches at Exeter, Gloucester, Norwich, Swansea, and Leicester.
The branch at Exeter was closed May 1, 1834; the Gloucester branch on the 28th February, 1849; the Norwich branch, May 31, 1852; the Swansea branch on 28th February, 1859; and the Leicester branch on 29th February, 1872. The reasons assigned for withdrawing these branches do not appear very satisfactory. The Exeter branch was closed because another branch was opened on the same day at Plymouth, and the branch was said to be removed to Plymouth. The opening of a new branch at Plymouth seems to have no necessary connection with the closing; of that at Exeter. The Gloucester branch was closed because a railway had been opened to Bristol, and the people of Gloucester might, if so disposed, transact their business with the Bristol branch. The distance between Gloucester and Bristol is about the same as that between Manchester and Liverpool; but the directors have never announced any intention of closing their branch at Manchester, upon the ground that there is a railway to Liverpool. The true reason we believe to be, that the business at these branches had not realized the anticipations of the directors. The active opposition of the private bank of Messrs. Sparkes & Co. (afterwards merged in the Devon and Cornwall Bank), prevented the Exeter branch obtaining much business. At one time the Gloucester Banking Company issued only the notes of the Gloucester branch, but afterwards they resumed the issue of their own notes, and hence, in 1843 and subsequent years, the circulation of this branch declined. The Norwich branch not only obtained but small business, but made large losses. It appears from parliamentary returns that so early as the year 1831, the bad debts at this branch amounted to £32,000. It may be remarked that three of the branches withdrawn were located in the centre of agricultural districts, and the most prosperous branches have been located in manufacturing and commercial towns, as Manchester, Liverpool, Birmingham, and Newcastle.
Here is another anomaly of the Act of 1844. The Bank of England is placed in a position in which it is its interest to withdraw some of its branches. At the same time, the banks of issue in the neighbourhood of those branches are not allowed to extend their issues so as to fill up the vacuum which is thus occasioned in the amount of the local circulation.
In addition to the management of the Government Funded Debt, which has always been conducted by the Bank of England, that corporation has of late years undertaken the management of the Government Unfunded
Debt, formerly managed by the Exchequer Office, of the Indian Debt, and of the Funded Debt of the Metropolitan Board of Works.
Pari passu with this increase of business, additional facilities have been afforded to the recipients of dividends of the various stocks by giving them the option of receiving their dividend warrants, by post, or at any of the branches of the Bank of England. The bank has also waived the charge of 1s. 6d, which it formerly made for preparing powers of attorney for the receipt of dividends.
In the Bullion Office an important modification has been made in the assay by which gold is bought and sold. Formerly, what was called the Trade Report was used, and the fineness of the gold was quoted to the 1/8 of a carat grain, equal to 7 1/4 grains Troy, or the 768th part of the whole. This left a small profit to the bank on gold bullion imported by them into the Mint for the purposes of the coinage, since the Mint assayed much closer; whereas the assay now used at the bank determines to the 1/3 of a mil-lieme, equivalent to the 1/3000 part of the whole, and leaves no appreciable difference between the bank and the Mint assay.
The price at which light gold coin is bought by the bank has also been raised from £3 17s. 6 1/2d per ounce to £3 17s. 9d., the authorities of the Mint receiving this coin from the bank at £3 17s. 10 1/2d, instead of requiring it to be remelted and reassayed, as was the practice previously. It is to be hoped that this change, which decreases the loss on light coins, will tend to induce bankers to withdraw them from circulation, and thus lend their aid to purge the gold currency, which is at present in a very unsatisfactory condition.
Under the Stock Certificates Act, 1863 (26 Vict. c. 28), the bank issues stock certificates for consols, new 3 per cents., and reduced 3 per cent. annuities. These certificates are transferable by delivery; but the transfer may be restricted by the holder filling in his name, address, and quality, in a space provided for the purpose. These certificates are of the denominations of £50, .£100, £200, ₤500, and £1000, and coupons are attached, payable to bearer, for the two half-yearly dividends due next after the date of issue.
The stockholder, when he desires to obtain certificates, transfers the stock in the Transfer Office in which the business of that particular stock is transacted, where he receives a certificate of the transfer, and this he exchanges in the Chief Cashier's Office for the stock certificate he requires.
When a holder of stock certificates wishes to have the stock they represent reinscribed, he delivers them up in the Chief Cashier's Office, and receives a certificate entitling him to have a corresponding amount of stock inscribed in his name in the Transfer Office of the stock.
The Government makes a charge of 2s. per cent. for the issue of certificates, and 1s. per certificate for re-inscription.
Stock certificates for Metropolitan Consolidated 3 1/2 per cent. stock are issued in exactly the same terms as certificates for the Government Funds, and for corresponding amounts, with the exception that there are no certificates of £200.
Stock certificates for India 4 per cent. and 5 per cent. stock are issued for £100, £500, and £1000; but the transfer of these certificates cannot be restricted, and the charges are slightly different from those for the Government funds.