istricts, some in
places where manufactures flourished, some in mixed districts, commercial
and agricultural, or industrial and manufacturing. In all of these, the
inquiry being carried as far back as 1844, the proportion of the
circulation to the banking deposits had greatly diminished in recent years.
In several cases the deposits had increased three-fold in the time. In one
case it was five times as large, in another nearly seven times, in another
nearly twelve and a half times. The proportion of the circulation to the
deposits had very largely diminished in that time. In one instance, from
being about one-third of the deposits, at which proportion it had remained
for five years consecutively, it fell to 9% at the end of the term. In
another from being 22% it had diminished to 1-1/2% of the total. In all
cases where the detail was given it had diminished greatly.

The Bank Act of 1844 was arranged with the intention of concentrating the
note issues on the Bank of England in order to secure the monopoly of that
bank as the one issuer in England and Wales. The result was that nearly all
the provincial banks in England had by 1906 lost the right of issue.
Doubtless all were destined to do so before long, a result by which banking
in England and the industries of the country must lose the advantage which
the local issues have been to Scotland and Ireland. Had the English country
banks been allowed, as the Scottish banks were, to associate together and
to retain their issues, powerful banks would many years since have been
established throughout England and Wales, and the amalgamations of recent
years would have been carried through at a much earlier date, and on terms
much more favourable to the public.

[Sidenote: Security of note issue.]

No security was ever required to be given for the local issues in the
United Kingdom. The provisions of the acts of 1844-1845 which compel the
Irish and Scottish banks to hold specie against the notes issued beyond the
legal limit, do not make the coin held a security for them. The legislation
of 1879 which made the note issues a first charge, with unlimited
liability, on the total assets of the joint-stock banks which accepted the
principle of limited liability for the rest of their business, has been the
only recognition by the state of the duty to the note-holders of rendering
them secure. It has been a real disadvantage to England that this duty has
never been sufficiently recogn