the world of private banking

CHAPTER 5
Banking and Family Archives
Fiona Maccoll
Introduction
The age of private banking has long since passed and the hundreds of local banks
which once populated towns across England and Wales have been eclipsed by
the development of joint-stock banks. However, these private banks, owned and
managed by a small number of partners, played a vital and unique role in the
development of both the modern economy and banking.
Initially, banking developed in London, and it is estimated that there were 40 or
so private banks operating in the capital by the end of the seventeenth century. The
number of banks outside London, however, only began to grow rapidly during the
second half of the eighteenth century. It is estimated there were about 12 provincial
or ‘country banks’ in 1750. By 1810 their number had grown to 650. The majority of
these banks remained small and locally based, often operating from only one office.
Changes to banking law in 1826, enabling joint-stock banks to be formed,
ultimately led to the demise of private banks. The number of private banks declined
during the nineteenth century as some failed and others converted to, or were
taken over by, joint-stock banks. By 1904, just 35 remained in business. Similarly,
private banks in the City of London were finding it increasingly difficult to compete
with joint-stock banks. For example two well-established private banks, Prescott’s
of Cornhill and Smith Payne & Smiths of Lombard Street, became joint-stock
concerns in 1891 and 1902 respectively.
NatWest Group, itself formed as a result of the amalgamation of nearly 200
banks, numbers well over 100 private banks amongst its constituents.
Historical Research
In 1956, L.S. Pressnell in his seminal work Country Banking in the Industrial
Revolution remarked that private country banks had been subject to remarkably
little historical investigation. The fact that his book is still the classic text in this
field suggests that this remains the case today.
L.S. Pressnell and J. Orbell, A Guide to the Historical Records of British Banking
(Aldershot, 1985), p. xvi. A revised edition of this work is: J. Orbell and A. Turton, British
Banking: a Guide to Historical Records (Aldershot, 2001).
Ibid., p. xvii.