ABSTRACT
The main new arrival on the British financial scene in the 1820s was the joint-stock bank, its coming timed to some extent by the great banking crisis of 1825. Scotland had long enjoyed the advantages of joint-stock banks — in the eighteenth century she had several chartered banks and many multi-partnered banks that functioned as joint-stock companies. The late arrival of commercial and industrial advance on a large scale in Scotland, shortage of local capital and the need to raise large amounts quickly and spread risks widely prompted the joint-stock principle of deposit banking there. It was a response to a less mature business environment than existed in England as much as to a more tolerant legal code. The Scottish business community profited much from the greater willingness of joint-stock banks to lend on overdraft at 5 per cent, and from the greater stability that large capitals in a common fund made possible. English businessmen had noticed that the Scottish banking system had been far less troubled by the 1825 panic than the English. Thomas Joplin, a Newcastle merchant and banker, thereupon successfully challenged the Bank of England's claim to monopoly. In 1826 joint-stock banks were legalized outside a 65-mile radius from London, and in 1833 joint-stock banks, but without rights of issuing notes, were legalized within the Bank of England monopoly area and London.
