Page:Encyclopædia Britannica, Ninth Edition, v. 3.djvu/349

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scotland.]
BANKING
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clause was taken advantage of in 1818, when several aliens acquired property in the bank in order to secure the benefit of naturalization. But after being suspended, the privilege was finally cancelled in 1822.|1}}

We subjoin an official abstract of the constitution and objects of the Bank of Scotland, printed in 1857 for the use of the proprietors ; the terms and model of transact ing business are, of course, sometimes altered, according to circumstances:—


1. The Bank of Scotland is a public national establishment, erected and regulated by the Legislature alone, and expressly as a public bank in this kingdom, for the benefit of the nation, and for the advancement of agriculture, commerce, and manufactures, and for other objects of public policy. (Will. Parl. 1, 5 ; 14 Geo. III. c. 32; 24 Geo. III. c. 8; 32 Geo. III. c. 25; 34 Geo. III. c. 19; 44 Geo. III. c. 23.)

2. The statutory capital is at present 1,500,000 sterling. It is raised by voluntary subscription, and has been subscribed for. 1,000,000 has been called for, and paid in. (44 Geo. III. c. 23.)

3. Subscribers, if not under obligations to the bank, may, at pleasure, transfer their right. If under obligation to the bank, the obligation must be previously liquidated ; or the proceeds of the sale, at a price to the satisfaction of the directors, must be applied towards such liquidation. Transfers are made by a short assign ment and acceptance thereof, both in a register appointed for that purpose. The expense, besides the Government stamp, is lls. (Will. Parl. 1, 5.)

4. Bank of Scotland stock may be acquired, in any portions, by any person, community, or other lawful party whatsoever, without selection, exclusion, or limitation of numbers. (Will. Farl. 1, 5; 44 Geo. III. c. 23.)

5. Bank of Scotland stock may be conveyed by will, and, if specially mentioned, without expense of confirmation. It cannot be arrested ; the holder s right may be adjudged. Dividends may be arrested. (Will. Parl. 1, 5.)

6. The Bank of Scotland is a public corporation by Act of Parlia ment. The bank s transactions are distinct from those of the stockholders ; and theirs from those of the bank. (Will. Parl. 1, 5.)

7. The establishment is expressly debarred from any other busi ness than that of banking. (Will. Parl. 1, 5.)

8. The management is vested, by statute, in a governor, deputy- governor, twelve ordinary, and twelve extraordinary directors. They are chosen annually, on the last Tuesday of March, by the stock holders having 250 of stock or upwards. Those above 250 have a vote for every 250, to 5000, or 20 votes. No person can have more than 20 votes. The governor must hold, at least, 2000 of stock.; the deputy-governor 1500; and each director 750 [now 1000]. They swear to be equal to all persons, and cannot hold any inferior office in the bank. (Will. Parl. 1, 5 ; 14 Geo. III. c. 32 ; 44 Geo. III. c. 23.)

9. The executive part is conducted by a treasurer, secretary, and other public officers, all sworn. All the officers of the Bank of Scotland find due security. (Will. Parl. 1, 5.)

10. The board of directors sits, for the general administration of the bank, at the bank s public head office in Edinburgh. The local business of that district is also conducted at that office. For the local business in the other parts of the kingdom, the bank has its regular public offices in the principal towns. At each of these offices there is the bank agent or cashier, who gives due security, and con ducts the bank s business for that district in the manner after- mentioned. (Will. Parl. 1, 5.)

11. The bank takes in money at all its public offices, on deposit receipts or on current deposit accounts. At the head office drafts on the branches, and at the branches drafts on the other branches and on the head office, are granted. Both at the head office and branches drafts are granted on the London, Dublin, and English and Irish provincial correspondents of the bank. All receipts and drafts are on the bank s engraved forms, and bear to be granted " For the Bank of Scotland," or "for the Governor and Company of the Bank of Scotland." At the head office official documents are signed by the treasurer, and at the branches by the agents, and all are counter signed.

Remittances can be made to the principal colonial and continen tal towns; and bills, payable in the colonies, and in foreign coun tries, can be negotiated through the bank. (Resolution of Court, 1793, as since modified.)

N.B.—The bank has always allowed interest on deposits, at a rate varying according to circumstances.

12. Bills on London. Edinburgh, or any town in the United Kingdom, are discounted at all the bank s public offices. The bank s agents judge, in ordinary cases, of the bills presented, so that parties meet with no delay. The bank does not re-issue the bills which it has discounted. (Resolution of Court, 23d Feb. 1789, and subsequent modifications.)

13. Government stock and other public funds may be purchased or sold, and dividends thereon may be received through the bank.

14. The bank gives credit on cash accounts at any of its offices, on bond, with security. The security may be personal co-obligants, or such other security as may be specially agreed on. Applications for cash accounts are given in to the office where the cash account is wanted, and must specify the credit desired, and the security pro posed ; and the individual partners, where co-partneries are proposed. Cash accounts are granted by the directors only, and are not re called unless by their special authority. It is understood that these credits are not used as dead loans, to produce interest only. In the fair course of business, the advantage of the bank is consulted by an active circulation of its notes, and by frequent repayments to it in a way least affecting that circulation. {Resolution of Court, 6th Nov. 1729, and 23d Feb. 1789.)

15. The bank s dividend has been for some time 8 [it has risen till it is now (1875) 14] per cent, per annum on its paid-up capital of 1,000,000 sterling. The dividends are paid regularly twice a year, without expense. They may" be drawn either at the bankY. head office, or at any of its other offices, as most agreeable to tho stockholder.


The above may suffice as a general outline of the mode in which the business of banking is conducted in Scotland.

The Royal Bank of Scotland was established in 1727. Its original capital of 151,000 has been increased to 2,000,000.

The British Linen Company was incorporated in 1746, for the purpose, as its name implies, of undertaking the manufacture of linen. But the views in which it originated were speedily abandoned, and it became a banking company only. Its capital amounts to 1,000,000.

None of the other banking companies established in Scotland are chartered associations with limited responsi bility, the partners being liable, to the whole extent of their fortunes, for the debts of the firms. The number of partners is in every case considerable. The affairs of the banks are uniformly conducted by a board of directors, annually chosen by the shareholders.

The Bank of Scotland began, as already stated, to issue 1 notes so early as 1704, and their issue has since been continued without interruption. " In Scotland," to use the statement given in the Report of the Committee of the House of Commons of 1826 on the Promissory Notes of Scotland and Ireland, " the issue of promissory notes pay able to the bearer .on demand, for a sum of not less than 20s., has been at all times permitted by law; nor has any Act been passed limiting the period for which such issue shall continue legal in that country."

All the Scotch banks receive deposits of as low a value as 10, and often lower, and allow interest upon them.

The interest allowed by the banks upon deposits varies, from time to time, according to the variations in the cur rent rate of interest. The aggregate amount of the sums deposited with the Scotch banks in 1874-5 is stated to be 78,401,070.

A witness, connected for many years with different banks in Scotland, and who had experience of their concerns at Stirling, Edinburgh, Perth, Aberdeen, and Glasgow, being examined by the Commons Committee of 1826, stated that more than half the deposits in the banks with which he had been connected were in sums from 10 to 200. Being asked what class of the community it is that makes the small deposits, he gave the following answer, from which it appears that the mode of conducting this branch of the bank business in Scotland has long given to that country most part of the benefits derivable from the establishment of savings-banks:—