Metropolis, where it did compete, it was completely victorious. No
company but the Bank of England could issue notes, and
unincorporated individuals gradually gave way, and ceased to do so.
Up to 1844 London private bankers might have issued notes if they
pleased, but almost a hundred years ago they were forced out of the
field. The Bank of England has so long had a practical monopoly of
the circulation, that it is commonly believed always to have had a
legal monopoly.

And the practical effect of the clause went further: it was believed
to make the Bank of England the only joint stock company that could
receive deposits, as well as the only company that could issue
notes. The gift of 'exclusive banking' to the Bank of England was
read in its most natural modern sense: it was thought to prohibit
any other banking company from carrying on our present system of
banking. After joint stock banking was permitted in the country,
people began to inquire why it should not exist in the Metropolis
too? And then it was seen that the words I have quoted only forbid
the issue of negotiable instruments, and not the receiving of money
when no such instrument is given. Upon this construction, the London
and Westminster Bank and all our older joint stock banks were
founded. But till they began, the Bank of England had among
companies not only the exclusive privilege of note issue, but that
of deposit banking too. It was in every sense the only banking
company in London.

With so many advantages over all competitors, it is quite natural
that the Bank of England should have far outstripped them all.
Inevitably it became the bank in London; all the other bankers
grouped themselves round it, and lodged their reserve with it. Thus