In the United States the earliest such libraries date back to the 18th century, when societies or groups of individuals joined to purchase books for a commonly run library. The Library Company of Philadelphia was the first of these libraries, started in 1731 by Benjamin Franklin.
With the advent of free public libraries in the 19th century most of the subscription libraries were replaced or taken over.
Subscription libraries, also known as social libraries, share many common factors with circulating libraries, making it difficult to tell them apart from one another because the difference between them is often subjective. Occasionally subscription libraries call themselves 'circulating libraries', and visa versa.
"Many ordinary circulating libraries might call themselves 'subscription' libraries because they charged a subscription, while the earliest private subscription libraries, such as Leeds, Warrington, or Liverpool, describe themselves as 'circulating' libraries in their titles. Since many circulating libraries called themselves after the town where they were situated, it is often difficult to distinguish the type of a particular library, especially since many are only known to posterity from a surviving book label, with nothing but the name as identification".
During the eighteenth century, many small, private book clubs evolved into subscription libraries, charging high annual fees or demanding subscribing members to purchase shares in the libraries. The materials available to the subscribers tended to focus on serious subject areas, such as biography, history, philosophy, theology, and travel, rather than works of fiction, particularly the novel. However, the increasing production and demand for fiction promoted by commercial markets led to the rise of circulating libraries, which met a need that subscription libraries did not fulfil. Circulating libraries also charged subscription fees to their patrons and offered serious subject matter as well as the popular novels, thus the difficulty in clearly distinguishing circulating from subscription libraries.
Subscription libraries were democratic in nature; created by and for communities of local subscribers who aimed to establish permanent collections of books and reading materials, rather than selling their collections annually as the circulating libraries tended to do, in order to raise funds to support their other commercial interests. Subscription libraries initially relied only on the regular subscription fees collected from their subscribers to maintain the premises housing their collection, rather than keeping the collection at the home of one of the members. Even though the subscription libraries were often founded by reading societies, committees, elected by the subscribers, chose books for the collection that were general, rather than aimed at a particular religious, political or professional group. The books selected for the collection were chosen because they would be mutually beneficial to the shareholders. The committee also selected the librarians who would manage the circulation of materials. Those employed to maintain the library collection had little influence on the selection of materials for the collection, as the members who owned the library wanted to maintain their control over the selection process.
"These societies are voluntary associations of men and women who have come together because they are interested in the aims and objects which the societies serve and they feel that they can pursue those interests better as members of a society, rather than as individuals. The libraries therefore have been collected together for the purpose of serving the objects to which the various societies are dedicated and they do this, for the most part, by serving their members".
Using the guidelines provided by Kelly, learned society libraries are private libraries, but these are owned by larger groups and materials are often lent or borrowed by qualified individuals or institutions outside the society itself. Societies were concerned mainly with the sciences, physical and biological and often cooperated with other groups like the Royal Society. Exclusive subscription libraries, the oldest one in the world being the Chemical Society in London, was founded in 1841 for the general advancement of chemistry. The primary objective of the society was to guide and direct original research in chemistry and to disseminate that knowledge through debates, lectures and its own Journal. .
"A professional society is an association of the members of one profession who qualify for membership by passing examinations organized by the society and these qualifications entitle them to pursue their professions. The society watches over the interests of the profession and speaks and acts with the authority of its members".Professional societies were for the well-to-do and they did not accept dabblers or amateurs, had their own bylaws and these societies also selected a librarian to manage their own library collections.
"Because circulating libraries usually developed from a specific shop or were founded from the outset at a particular commercial address, the association of place proved particularly important in the reception and reputation of such libraries".
However, in an edition of "Tom Tyler and his Wife" in 1661 the publisher and bookseller Francis Kirkman included a catalogue of 690 plays which he claimed to be ready to lend “upon reasonable considerations” from his premises in Westminster.
In Britain there were more than 200 commercial circulating libraries open in 1800, more than twice the number of subscription and private proprietary libraries that were operating at the same time. Many proprietors pandered to the most fashionable clientele, making much ado about the sort of shop they offered, the lush interiors, plenty of room and long hours of service.