There may have been one or two circulating libraries in Britain in the seventeenth century but they really became established in the 1720s. The poet Alan Ramsay was renting books from his Edinburgh bookshop in 1725, generally credited with being the first such commercial library. A circulating library is simply a commercial library, where readers can rent a book, on a book-by-book basis or more commonly with an annual subscription. Fines for late returns would represent an income stream too. “The era of the great circulating libraries — Bell’s, Lackington’s, and Lane’s — coincided with the rise and development of Gothic fiction” Franz J. Potter tells us in The History of Gothic Publishing, 1800-1835, (Palgrave Macmillan, 2005).
The website British Circulating Libraries 1725-1966 tells all about them. At their height they were purchasing a substantial proportion of the books printed — often 40% of the run, and with Gothic novels (which were more or less written factory style for the circulating library market) more. The libraries liked to be able to count a single novel as three separate loans, and this drove the Victorian novel into its 3-volume norm.
Mudie’ Select Library undercut the competition when they opened in 1842 fixing their price of one guinea a year at about a quarter of the usual price. This represented half the price of the normal three-decker novel. For many avid readers this was the only way to go. By 1890 Mudie’s had about 25,000 subscribers. The company was rather strait-laced and used its purchasing power to ensure that publishers didn’t allow any racy content in their novels. As their publicity material said “Cheap Reprints, Serials, Costly Books of Plates, Books of merely Professional or Local Interest, and Novels of objectionable character or inferior ability, are almost invariably excluded.” Trade publishing pretty much danced to their tune.
W. H. Smith & Sons started out with kiosks on railway stations but quickly developed lending libraries too. They didn’t close the last one till 1961.
Boots the Chemist soldiered on till 1966. UsvsTh3m describes their set up. I can remember returning books to Boots in the fifties with my mother, and can attest that at least the one in Galashiels didn’t look as stuffy as the pictures they show. The decline of the circulating library coincided with the development of the cheap mass-market paperback, but in a formal sense, it was the Public Libraries and Museums Act 1964, with its requirement that local councils lend books for free, that killed them off. Prior to that not every council did provide library service.
There are still a few active subscription libraries in Britain and America, among them the Mercantile Library, in New York City which now trades under the title “The Center for Fiction”. I was once briefly a member. Many of the remaining examples are associated with learned societies.