the world of private banking

84
THE WORLD OF PRIVAtE BANKING
Maurice, his brother. Like the Guaranteed Cheque Bank (1880–4), a number had
very brief business lives, including Cates & Son (1875–8), A.S. Cochrane (1875–
8) and A. Masters & Co. (1880–2).
Whereas the aggregate deposits of provincial joint-stock banks exceeded those
held by all private country banks in 1871, the London joint-stock banks only finally
gained institutional dominance as deposit holders in the metropolis during the
boom of the early 1870s. 50 The relative vibrancy of mid-century London private
banking compared with private country banking is difficult to explain, because of
its long-established heterogeneity. Indeed, that heterogeneity may be one reason
for its overall greater resilience. To go further is almost impossible, as there is
only one history of a City private bank, Glyn, Mills, which was in some respects
more like a merchant bank, 51 whereas other business histories are of primarily
elite West End houses: Childs, Coutts, Drummonds and Hoares, none of which
would provide the necessary general pointers. 52 All in all, an overall assessment
of London private banking throughout the nineteenth century remains a longstanding
unconsidered item on the English banking historian’s research agenda.
The growth of joint-stock banking, undertaken by new and established
institutions, took forward deposit/cheque banking, especially during the early
1860s and early 1870s. The liabilities of private banks, metropolitan and provincial,
grew more slowly – at about a third of the rate of their joint-stock competitors over
the mid-century period – with the result that their share of total public liabilities
declined to about a third by the late 1870s. 53 Overall expansion was checked in
the short-term by the 1866 crisis, but only brought to almost a halt by the 1878
crisis caused by the failure of the City of Glasgow Bank. This led to the money
supply, primarily bank deposits, growing slower than output, and this, along with
falling holdings of monetary and prime banking reserves, contributed to the price
deflation of the first phase, 1873–86, of the ‘Great Depression’ of the last quarter
of the nineteenth century. 54
50
See Capie and Webber, Monetary History of the United Kingdom, vol. I, Table III.
(3), p. 432.
51
R. Fulford, Glyn’s 1753–1953: Six Generations in Lombard Street (London, 1953).
52
P. Clarke, Child & Co. 1673–1973: the First House in the City (London, 1973);
E. Healey, Coutts & Co., 1692–1992. The Portrait of a Private Bank (London/Sydney/
Auckland, 1992); H. Bolitho and D. Peel, The Drummonds of Charing Cross (London,
1967); and [C. Hoare & Co.], Hoare’s Bank: a Record 1673 –1932 (London, 1932). See also
J.A.S.L. Leighton Boyce, Smiths the Bankers 1658–1958 (London, 1958).
53
Collins, ‘English Banking Sector’, pp. 375–81; and idem, ‘English Banks and
Business Cycles, 1848–80’, in Cottrell and Moggridge, Money and Power. The estimates
of Capie and Webber are in broad agreement, indicating that, over the period 1878–87,
joint-stock banks held 69 per cent of all English bank deposits; calculated from Capie and
Webber, Monetary History of the United Kingdom, vol. I, Table III.(3), p. 432.
54
D.E. Moggridge, ‘Keynes as a Monetary Historian’, in Cottrell and Moggridge,
Money and Power, pp. 138–43; and Collins, ‘The Banking Crisis of 1878’: On expectations