Abstract: The Virtues and Vices of Branch Banking: Joint-Stock Banks and the Spread of Banking in England and Wales, 1826-1844

Lucy Newton


Following the crisis of 1825/6, the 1826 Bank Act allowed the creation of joint-stock banks in England and Wales. A plethora of mainly small-scale joint-stock banks were formed between 1826 and 1870. The amalgamation movement of the 1870s-1890s then saw a concentration in banking whereby 1900 saw a few large-scale, joint-stock banks, with extensive branch networks, dominating the UK retail banking sector. This paper examines these joint-stock banks, their propensity to branch, and the part that branching played in their successful progress, at the expense of private banks, during the nineteenth century. These new joint-stock institutions took to branching vigorously. This paper will examine the patterns of branching over the nineteenth century by mapping banks and their branches and analyzing the motivations for branching. Were banks driven by a virtuous desire to serve their customers, shareholders, and local communities? What were the vices involved in branching, such as over-extending and consequent bank failure, with disastrous consequences for customers, shareholders, and local economies? The research aims to add to the debate on UK banking, primarily concerning the virtue of its stability but also the vice of its conservatism.