—— Part
II.
Sect.
Constitution of Banks.
8.
581
Sect.
Joint Stock Banks.
8.
1186. The earliest development of joint stock banks (s) was in ^^g^^nks^^^ 1826, when corporate bodies or co-partnerships, unlimited in number, were authorised to carry on banking business, both deposit Joint stock In co^n^ry^ and issue, outside the sixty-five-mile radius from London (^). 1833 banking other than issue business was recognised as permisLondon sible within London and the sixty-five-mile radius by corporations, companies, or partnerships, irrespective of the number of members {u). In 1837 powers were given to the Crown to grant charters of incorporation to trading companies, including banking companies (x), and such charters may now be renewed or extended (a). In 1844 a system of constituting banks of more than six persons Effect of Pre-existing banks under the legislation of by letters patent was instituted. legislation of 1826 and 1833 were given the option of coming under the new system by petitioning for letters patent, but if in operation prior to May 6, 1844, were not compelled to do so (h). The powers and privileges of banks formed within the sixty-fivemile radius in 1833 were assimilated to those formed outside it under the legislation of 1826, except with regard to the right to issue notes (c). In 1857 the limit of ten members was imposed on all unregistered Limit on partnerships for banking business (d), but partnerships of not more pmbers than ten were authorised to carry on banking business in all 1357^^^^ respects as any partnership of not more than six could then do {e). By the same Act all banks formed under the 1844 legislation were compelled to register with unlimited liabiUty (/), but those of the earlier joint stock banks or companies which had merely availed themselves of the privileges of the 1844 scheme were not affected, For (s) For the general law as to joint stock companies, see title Companies. the powers and duties of directors and managers, and the company's hability for their acts, see title Companies. As to statutory requirements in a contract for the sale of shares, stock, or interest in a joint stock banking company, see title
Stock Exchange. (0 Country Bankers Act, 1826 (7 Geo. 4, c. 46). Bank of England Act, 1833 (3 & 4 Will. 4, c. 98). (x) Chartered Companies Act, 1837 (7 Will. 4 & 1 Yict. c. 73). (a) Chartered Companies Act, 1884 (47 & 48 Vict. c. 56). (&) Joint Stock Banks Act, 1844 (7 & 8 Vict. c. 113), ss. 1—45. (u)
(c)
lUd.^
s.
47.
not clear whether the restriction applies only to combinations formed for the exclusive purpose of banking, or whether it would include combinations carrying on banking business as part of their undertaking, or what precisely constitutes banking business. See Ex parte Coe (1861), 3 De G. F. & J. 335, where a society formed to receive deposits and conduct emigration operations was held not a banking company within the Joint Stock Banking Companies Acts and contrast O'Connor v. Bradshaw (1850), 5 Exch. 882, where a company formed for the purpose of buying land and receiving deposits to be so utilised was held illegal under the Bank Charter Act, 1 844 (7 & 8 A^ict. c. 32). Probably the real test is the receiving money to be withdrawn by cheque. This does not, as (e) Joint Stock Companies Act, 1857 (20 & 21 Vict. c. 49). before stated, appear to permit a partnership of not more than six, issuing notes at that date by virtue of not being more than six, to increase its number of members to ten without prejudice to the right of issuing notes. See p. 572, note (p), ante. (/) Joint Stock Companies Act, 1857 (20 & 21 Yict. c. 49), s. 4. (d)
It is
