Private London bankers did indeed issue notes down to the middle of
the last century, but no joint stock company could do so. The
explanatory clause of the Act of 1742 sounds most curiously to our
modern ears. 'And to prevent any doubt that may arise concerning the
privilege or power given to the said governor and company' that is,
the Bank of England' OF EXCLUSIVE BANKING; and also in regard to
creating any other bank or banks by Parliament, or restraining other
persons from banking during the continuance of the said privilege
granted to the governor and company of the Bank of England, as
before recited; it is hereby further enacted and declared by the
authority aforesaid, that it is the true intent and meaning of the
said Act that no other bank shall be created, established, or
allowed by Parliament, and that it shall not be lawful for any body
politic or corporate whatsoever created or to be created, or for any
other persons whatsoever united or to be united in covenants or
partnership exceeding the number of six persons in that part of
Great Britain called England, to borrow, owe, or take up any sum or
sums of money on their bills or notes payable on demand or at any
less time than six months from the borrowing thereof during the
continuance of such said privilege to the said governor and company,
who are hereby declared to be and remain a corporation with the
privilege of exclusive banking, as before recited.' To our modern
ears these words seem to mean more than they did. The term banking
was then applied only to the issue of notes and the taking up of
money on bills on demand. Our present system of deposit banking, in
which no bills or promissory notes are issued, was not then known on
a great scale, and was not called banking. But its effect was very
important. It in time gave the Bank of England the monopoly of the
note issue of the Metropolis. It had at that time no branches, and
so it did not compete for the country circulation. But in the