Banking and Bank Notes in Georgian England

The 18th Century saw the roots of modern day banking in England. International trade and the various wars, most importantly, the war with France, led to the development of the British banking system. Checks and banknotes appeared, as well as the founding of the Bank of England.

Before banks, many of the services we think of when it comes to banking were provided by merchants and brokers, but, most assuredly, by goldsmiths located in most cities and large towns, but, especially, in London. Goldsmiths did more than deal with coins. Their promises to pay were accepted as “legal tender.” They were men of character, who word was as good as the law. They issued endorsed receipts, which one could return to collect his money.

In addition, people with money could write to the goldsmith to transfer money into another person’s account, which was an early form of writing a “check.” However, with more access to international trade and investments, a need to move money more efficiently was required. Thus, goldsmith houses became the banks of the 1700s.

Okay, strictly speaking, they are Bank Notes, during the Regency era. They were promissory notes (or cheques/checks) issued by specific banks to a specified value. They are called Bank Cheques today, which are a different beast to cheques written by a bank’s customers.

The Bank Notes of old are the equivalent of today’s Bank Cheques/Checks – a check issued by a specific bank against its own holdings. The bank withdraws the funds from their customer’s account and holds it in their own reserves, and the bank holds that money until the the Bank Cheque/check is presented for payment.

Pontefract Bank 1 guinea dated 1810 No.O550 for John Seaton, Sons & Foster, https://www.londoncoins.co.uk/?page=Pastresults&auc=132&searchlot=263&searchtype=2

A great source for everything “normal” during the Regency era is the book, In These Times, by Jenny Uglow. [As the Napoleonic wars raged, what was life really like for those left at home? Award-winning social historian Jenny Uglow reveals the colourful and turbulent everyday life of Georgian Britain through the diaries, letters and records of farmers, bankers, aristocrats and mill-workers. Here, lost voices of ordinary people are combined with those of figures we know, from Austen and Byron to Turner and Constable. In These Times movingly tells the story of how people really lived in one of the most momentous and exciting periods in history.]

This book contains a lot of information on banks. It concerns the impact of the Wars on life in England, and follows certain families, some involved in banking, for the duration.  You might be surprised by the number of local banks and the amount of commerce it discusses. There are several references to banking and banks.– city banking and country banking. The Bank of England. ” Several private banks dotted down Fleet street and the Strand to Charing Cross, a busy corridor between the city and Westminster and the West end, all dealing with wealthy landed customers in need of mortgages and loans,or, if they were flush, a safe house for their deposits. …. Each bank had its distinctive clientele: Praed & Co in Fleet Street had the West Country and Cornish business; Drummond’s catered for army agents, Gosling’s and Child’s for East India company tycoons; Coutts dealt with the aristocracy and never with industry; Wright’s in Covent Garden looked after the Catholic gentry and Herries Bank in St. James Street, further west, issued cheques for smart travellers setting out on the grand tour.The rule at Hoare’s was that one partner was in attendance at all times…. Ten clerks. One must be in at all times even on Sundays and Christmas day. They could live there.”

Baring’s was a merchant banker even if the word was not used at that time. The Quakers had several banks: Lloyd’s in Birmingham, Backhouse in Darlington, and Gurney’s in Norwich.

Supposedly, Child & Co. was one of the London banks that catered to aristocrats, so I’m using that as my hero’s London bank.

In Jane Austen, Edward Knight & Chawton : Commerce and Community by Linda Slothouber, the author says Edward Austen Knight’s primary London bank was Goslings Bank. He also used a bank founded by his brother Henry. Austen, Maunde & Austen, which went bankrupt, causing Edward to suffer a substantial loss.

Book Blurb: When Jane Austen’s third brother, Edward, inherited the estates of his rich relatives, he took on their surname, Knight, and he took control of property scattered across five English counties. Jane visited her brother at his home in Kent, and she spent her final years in a cottage he owned in the village of Chawton in Hampshire. From these vantage points, she observed Edward’s approach to managing his estates and learned about the concerns and activities of wealthy landowners, knowledge that is reflected in her novels.

Using original estate books, bank records, letters, and other archival sources, Linda Slothouber has created the most detailed portrait to date of Edward Knight. With Edward as an example, along with excerpts from Jane Austen’s novels, the reader discovers how the landed gentry of fact and fiction made their money, tried to ensure the prosperity of their heirs, and interacted with workers on their estates. People at all levels of the estate economy are represented, with profiles of specific individuals that Jane Austen would have known during her years in Chawton.
To fully understand the social criticism and subtle humor in Jane Austen’s novels, it is necessary to understand her world; while the pastimes of the gentry are often in the foreground, the business of estate ownership is an essential foundation. Learn what being “Lord of the Manor” and having “ten thousand a year” really meant; what stewards, bailiffs, overseers, and churchwardens did; who administered the civic affairs of the village; how attitudes toward natural resources and common property changed during Jane Austen’s lifetime; and why the estate-owner, though at the top of the social order of the village, was often judged according to the well-being of his humblest cottagers.

Goslings bank had records of money deposited in country banks. One such was Hammond & Co, in Canterbury. That bank consistently sent large deposits to the Gosling bank. I imagine these deposits would travel with guards. Agents also regularly made deposits in the Gosling bank. They were close enough to town to do so.

Sparrow & Co., an Essex bank also made deposits into the Gosling account. Money for current expenses and for current wages were kept on hand so not all money was sent to the bank. People were not quite in the habit of writing checks. Coin was preferred to paper, and most servants and such were paid in coin. Though this book is about the finances of Edward Austen Knight, it is the only one so far that I have found that actually discusses the bank deposits. Others discus the debts, the expenses, loans made by the landowner to others or taken out from a bank.

Banks in the countryside grew exponentially after the recoinage of guineas in 1774, meaning an institution/established business was required to collect coins and provide alternate currency for the people in the surrounding villages and neighborhood.

If one was involved with government securities, were part of the aristocracy, or the gentry, or was a wealthy barrister, one would customarily use these banks: Hoares, Coutts, Childs, and Drummonds.

If one was a member of the stock exchange, acted as a liaison for country banks, or did business with traders and manufacturers, one would deal with Martins, Mastermans, Curries, or Glyn Mills.

Other Resources: 

BANKING AND BANK NOTES:

Banking in Eighteenth Century England

http://www.umich.edu/~ece/student_projects/money/banking.html

British Banking History

http://www.banking-history.co.uk/history.html

Regency England and Money

http://hibiscus-sinensis.com/regency/money.htm

About reginajeffers

Regina Jeffers is the award-winning author of Austenesque, Regency and historical romantic suspense.
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2 Responses to Banking and Bank Notes in Georgian England

  1. Jessica Merryn says:

    Regina, wonderful article (and Jenny Uglow’s book is fabulous!), but could you please clarify precisely what you were trying to communicate in the sentence that is the third last para of the post? As written, its opening phrase doesn’t make sense, and I don’t wish to assume you mean ‘x’ when it could be ‘y’.

    • Jessica, the line should have read “grew,” not “great.” The eye sees what it wishes when proofreading no matter how many times one looks over a piece. The point was that 1774, banks, as a whole, were plentiful throughout the country, not only in the large cities.

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