the world of private banking

LONDON’S FIRSt ‘BIG BANG’? 79
James Cousins and had, initially, an office so small that it could only accommodate
one customer at a time. Cousins withstood the consequences of the 1864 failure of
the Leeds Bank, and when his own bank was subsequently incorporated, he was
its principal shareholder. 32
The formation of new provincial corporate banks went in parallel with the
setting up of London joint-stock limited banks: Alliance of London & Liverpool,
East London, Imperial, Metropolitan & Provincial, North London and South
London. They had various parents, the Imperial being the product of the efforts
of a Scots merchant who gradually recruited a board from among the City’s
cosmopolitan membership – H.L. Bischoffsheim, A.P. Petrocochino, P. C. Ralli
and D. Stern – and their presence as directors greatly assisted in maintaining
the bank’s share price from 1864 until the 1866 crisis. The East London was the
creation of a Mr Sleigh, who was sufficiently able to recruit an MP and a compiler
of directories for its board. 33 Another, initially titled the South Eastern Banking
Company, was promoted in February 1864 by a finance company, the London
Financial Association. It was the conversion of the private West Surrey Bank of
C.E. Mangles & Co., and subsequently acquired the Ramsgate Bank of Messrs
Burgess & Canham. 34
The foundation of limited banks accompanied the inception of what proved
to be significant trends in the structure of English domestic banking. One was
the beginning of a sustained impetus to branch. The number of offices per bank
rose from 2.9 in 1855 to 4.3 in 1866, a rise predominantly a feature of jointstock
banking, for which the overall ratio of offices per bank increased from 6.3
to 8.7. 35 Branching took further the declared intention of some of the new banks’
managements and promoters to link the metropolis with the provinces. However,
more important for the inception of nationwide banking were the decisions of
the managements of two established joint-stock banks. During the mid-1860s, the
National Provincial’s directors decided to forgo the profits of a provincial note issue
in order to open a fully-operational London branch. At the same time, the board
of the London & County (a joint-stock deposit bank established in 1836 under the
declaratory clause in the Bank of England’s renewed charter) re-invigorated their
bank’s branching policy. For the most part, however, this involved the widening
of its network solely within the Bank of England’s protected metropolitan noteissuing
area. Consequently, these two branching strategies were complementary
and in 1874 resulted in the London & County and the National Provincial being
32
W.F. Crick and J.E. Wadsworth, A Hundred Years of Joint Stock Banking (London,
3rd edn, 1958), pp. 221–3.
33
Crick and Wadsworth, Hundred Years, pp. 297–9. Sleigh may have been involved
in the earlier creations of the Bank of Egypt and the Ottoman Bank.
34
Cottrell, Investment Banking, vol. I, pp. 334–5.
35
Nishimura, Decline of Inland Bills, Table 1, pp. 80–81.