The restriction of partners in private banks to the number of six continued
till 1862. By the act of that year they were allowed to be ten. This power,
however, did not extend to issuing private banks, which were restricted to
six partners as before. The power of increasing bank partnerships to ten
has been made but little use of. The difficulties of carrying on business
on a large scale by private firms were augmented by certain legal
technicalities which practically rendered large private banks impossible in
ordinary circumstances. Hence banking business did not begin to assume its
present form till almost half-way through the 19th century. The gradual
change followed the passing of the acts of 1826-1833, of 1844-1845, of 1862
and of 1879. Incidentally the act of 1844 had an unexpected influence on
the constitution of the banking system. After favouring the existence of
small banks for many years, it gradually led, as the time arrived when the
establishment of large and powerful banks in England and Wales became
necessary, to their formation. No new bank of issue whatever was allowed to
be established--restrictions were placed on the English issuing
banks--private issuing banks with not more than six partners were allowed
to remain, to amalgamate with other private issuing banks and to retain
their joint issues. The joint-stock banks which possessed issues were also
allowed to continue these, but when two joint-stock banks amalgamated, the
continuing bank only retained its issue. Also when a private issuing bank
was formed into or joined a joint-stock bank, the issue lapsed.

The greater number of the provincial banks in England and Wales had been
banks of issue up to 1844. The act of 1844 [v.03 p.0338] restricted their
power of issuing notes, which at that date and even subsequently continued
to be of importance to them, in such a manner that, as Sir R. H. Inglis
Palgrave stated in giving evidence before the committee of the House of
Commons at the banking inquiry of 1875, these banks possessed in their
issues a property they could use, but were not able to sell. The statistics
forming part of Appendix 14 to the report of the select committee of the
House of Commons on banks of issue (1875) give interesting information as
to the proportion of notes in circulation to the deposits of banks in
various districts of the country and at various dates. The statements were
supplied by twenty-one banks, some in agricultural d