Our public libraries today are in a depressing state. Given this, the history of for-profit libraries is a fascinating story that should be better understood. The increase in secular literature and the high cost of books encouraged the spread of lending libraries throughout the eighteenth century. Commercial subscription libraries began when booksellers began renting out extra copies of books and by 1790 there were already over 600 private rental and lending libraries, with a clientele of 50,000 readers. It was at one of these libraries that David Ricardo was first introduced to economics.

Following the growth of gentlemen-only libraries, the late eighteenth century also witnessed the growth of subscription libraries for tradesmen which were designed principally for the use and instruction of the working classes. In 1842, Charles Edward Mudie (1818–90) started to lend books from his stationery shop in Southampton Row, London, and by the end of the century he would be referred to as ‘the King of the librarians’ and credited with revolutionising book reading across the UK. At Mudie’s Select Library, a subscriber could borrow an unlimited number of books (one at a time) for one guinea a year, and a subscriber could have his order sent to his door within a 20-mile radius of London. Branches soon opened in Birmingham and Manchester.

Mudie’s influence increased by advertising his ‘Constant Succession of the Best New Books, Exchangeable at Pleasure’ and by buying books from publishers in bulk. Mudie’s also generated income from rebinding his books and selling them. This allowed him to continually turnover his stock and keep it up to date. Between 1853 and 1862, 960,000 books were added to the library, and in 1864 Mudie’s Select Library was converted into a limited company. By the end of the century Mudie’s Select Library consisted of an estimated 7.5 million books.  While Mudie’s success also sealed the fate of many smaller commercial libraries operating at the time, some competitors did exist. For example, when Mudie rejected a proposal from William Henry Smith to open libraries at its railway bookstalls in 1858, Smith had no choice but to start his own lending service which lasted until 1961. At W.H. Smith’s, Class B books could be borrowed for 2d for five days and Class A books cost 1d a day.  Books could be borrowed from a railway bookstall before getting onto the train and then exchanged at the final destination. Incidentally, in March 2010 the forward-thinking Culture Minister Margaret Hodge declared, ‘I’ve long wanted library users to be able to borrow a book in Brent and return it in Birmingham.’!

In 1898 Jessie Boot (on the advice of his wife Florence, the daughter of a bookseller), also opened their Boot’s Booklovers’ Library which charged borrowers 2d per book, and by 1938 they had one million subscribers who were borrowing 35 million books a year. Books were strategically positioned in stores to encourage subscribers to purchase other Boot’s products. This initiative lasted until 1966. The 1920s also witnessed the rapid growth of the pay as your read two-penny library which made use of cheap reprints and second hand books and were often operated as a sideline to another business. By the late1930s there was an estimated 6,000–7,000 of such libraries across the UK. The decline of Mudie’s Select Library finally occurred in the 1930s when they could no longer compete with the growth of free local government libraries. The doors at Mudie’s Select Library were closed for good on Saturday 12 July 1937.  These for-profit libraries emerged spontaneously and the government (mischievously encouraged by philanthropists such as Andrew Carnegie) jumped onto a horse that was already galloping. Government intervention in this sector also played a major role in forcing many of these pioneering libraries out of business, leaving subscribers little option but to put up with the second-rate service so often provided by their local tax-financed library.

An edited version of this article was published in Economic Affairs, September 2010