the world of private banking

82
THE WORLD OF PRIVAtE BANKING
London clearing banks by some provincial banks, such as Lloyds and the Midland,
in order to secure their direct institutional entry into the clearing. 43
Nonetheless, when examining why corporate banks founded after 1870 failed
to make a mark nationally, it has to be borne in mind that the majority of them
were conceived as local institutions, like their predecessors of the 1830s. Their
managements had little intention of developing either major regional or national
business catchment areas. In these terms, it is not surprising that none became a
significant deposit holder. They were not competing in the national deposit market,
however defined, but rather at a parochial level. Instead, their main national impact
arose from their promotions collectively increasing the number of English and
Welsh joint-stock banks to a historic maximum of 128 in 1880. As, generally, their
objective was providing local banking facilities, the prime competitive edge of the
post-1870 corporate banks bore upon the remaining private country banks. 44
The Lancashire & Yorkshire was different, being nationally successful. This
was due in part to its not being an entirely new bank in 1872, having arisen out
of the Alliance of London & Liverpool’s Manchester branch. Its manager, John
Mills, began to free his local domain from 1866, his efforts achieving success from
April 1871. As such, the Lancashire & Yorkshire was the product of particular
personal enterprise. On its establishment, the bank soon began to branch, opening
four offices over the first year of its separate existence and a further two by the
close of 1874. Expansion went along with riding out the minor financial crisis
of 1875 by the employment of significant reserves, which cushioned the bank
against London bill brokers ‘rejecting some of the very finest paper’. 45 Except for
the conversions of existing private banks, no other post-1870 corporate banking
creation began with such a head start, given by customer accounts accumulated
over a previous decade. 46
43
P.L. Cottrell, ‘The Domestic Commercial Banks and the City of London, 1870–
1939’, in Y. Cassis (ed.), Finance and Financiers in European History 1880–1960
(Cambridge, 1992), p. 48.
44
For one example of their lending business – that of the Swansea Bank (1872–1888)
– see Cottrell, Industrial Finance, pp. 213, 219–23.
45
G. Chandler, Four Centuries of Banking, II, The Northern Constituent Banks
(London, 1968), pp. 516–29; Anon., The Story of the Lancashire & Yorkshire Bank Limited
1872–1922 (Manchester: n.d. [1922]); and, for John Mills in particular, see L.H. Grindon,
Manchester Banks and Bankers; Historical, Biographical, and Anecdotal (Manchester, 2nd
edn, 1878), pp. 311–12; and Cottrell, ‘Credit, Morals and Sunspots’, esp. pp. 54–5, 58–61.
46
The other bank in Capie’s tabulations that enjoyed some initial, rapid deposit
growth, albeit relative, was the Birmingham, Dudley & District. However, Capie is mistaken
in regarding this as a new institution formed in 1874. Rather, it was the reconstitution of
a bank first established during the 1830s. See Capie, ‘Structure and Performance’, Table
3.5c, p. 98 and, for the Birmingham, Dudley & District, Crick and Wadsworth, Hundred
Years, pp. 55, 66; and A.R. Holmes and E. Green, Midland: 150 Years of Banking Business
(London, 1986), pp. 15, 16, 19, 26, 38, 59, 69, 71, 73, 75, 83, 104.