404 



BANK. 



milled from 1797 till April, 182!), when Uie permission 

 ceased. There have been comparatively few hank- 

 ruptciesnmongtlieScoiLi-.il limits. In I7<):>and IN?.), 

 when su many of the Knglish provincial banks \\< IT 

 swept off, there was not a single establishment in 

 Scotland thnt gave way. This superior stability seems 

 to be ascribublc partly to the formation of NO many 

 banks with numerous Ixxlies of parim TS, which tends 

 io prevent any company with only u few partners, 

 unless they are known to possess considerable for- 

 tunes, from getting paper into circulation ; partly to 

 the less risk attending the business of banking in 

 Scotland ; and partly to the facility afforded by the 

 law of Scotland of attaching a debtor's property, 

 whether it consist of hind or movables, and making 

 it available to the payment of his debts. All the 

 "ottish Iwnks receive deposits of so low a value as 

 10, and sometimes lower, and allow interest upon 

 them. The interest allowed by the bank upon de- 

 posits varies from time to time according to the cur- 

 rent rate of interest which money generally bears. 

 At present, the interest allowed on deposits is only 

 two or two and a half per cent. It has been calcu- 

 lated that the aggregate amount of the sums deposited 

 with the Scottish banks amounts to between 20 to 

 24 millions. The loans or advances made by the 

 Scottish banks are either in the shape of discounts or 

 upon cash credits, or, as they are more commonly 

 termed, cash accounts. This species of account does 

 not differ in principle from an over-drawing account 

 at a private banker's in England. A cash credit is 

 a credit given to an individual by a banking company 

 for a limited sum, seldom under 100 or 200, upon 

 his own security, and that of two or three individuals 

 approved by the hank, who become sureties for its 

 payment. The individual who has obtained such a 

 credit is enabled to draw the whole sum, or any part 

 of it, when he pleases ; replacing it, or portions of it, 

 according as he finds it convenient ; interest being 

 charged upon such part only as he draws out. " If 

 a man borrows five thousand pounds from a private 

 hand, besides tliat it is not always to be found when 

 required, he pays interest for it whether he be using 

 it or not. His bank credit costs him nothing, except 

 during the moment it is of service to him ; and this 

 circumstance is of equal advantage as if he had bor- 

 rowed money at a much lower rate of interest.' 

 ( Hume's Essay on the Balance of Trade.) This, then, 

 is plainly one of the most commodious forms in which 

 advances can be made. Cash credits are not, how- 

 ever, intended to be a dead loan ; the main object of * 

 the banks in granting them is to get their notes cir- 

 culated, and they do not grant them except to persons 

 in business, or to those who are frequently drawing 

 out and paying hi money. The expense of a bond 

 for a cash credit of 500 is 4 stamp duty, and a 

 charge of 10*. 6d. per cent, for filling it up. Accord- 

 ing to a demi-official return given in the Commons' 

 report, the total number of notes in circulation in 

 Scotland, in the early part of 1826, amounted to 

 3,309,082, of which 2,079,344 were under o, and 

 1,229,838, 5 and upwards. The Scottish banks draw 

 on London at twenty days' date. This is denominated 

 the par of exchange between London and Edinburgh. 

 Most of the great Scottish banks, such as the bank 

 of Scotland, the Royal bank, &c. liave established 

 branches in other towns besides that where the head 

 office is kept. 



By the act 9 Geo. IV. c. 65., to restrain the negotia- 

 tion in England of Scottish or Irish promissory notes 

 and bills under 5, it is enacted, that if any body 

 politic or corporate, or person, shall, after the 5th of 

 April, 1829, publish, utter, negotiate, or transfer, in 

 any part of England, any promissory or other note, 

 draft, engagement or undertaking, payable on de- 



mand to the bearer, for any sum less than 5, pur- 

 porting to have been made or issued in Scotland or 

 Ireland, every such body politic or corporate, or JUT- 

 SOU, shall forfeit for every such offence not more tin; n 

 j5 nor less than .5. Nothing contained in this act 

 applies to any draft or order drawn by any person on 

 his or her banker, or on any person acting as such 

 banker, for the payment of money held. by such bank- 

 er or person for the use of the person by whom Mich 

 draft or order shall be drawn. 



The following Table contains an account of the 

 names or firms of the present luniks in Scotland 

 (in number 30) ; the dates of their establishment ; 

 places of the head offices ; number of brunches ; 

 number of partners ; and the names of their London 

 agents. 



Banks in Ireland. ' ' In no country, perhaps," says 

 Sir Henry Parnell, " has the issuing of paper money 

 been carried to such an injurious excess as in Ireland. 

 A national bank was established in 1783, witJi similar 

 privileges to those of the Bank of England, in respect 

 to the restriction of more than six partners in a bank ; 

 and the injury that Ireland has sustained from the 

 repeated failure of banks may be mainly attributed to 

 this defective legislative regulation. I lad the trade of 

 banking been left as free in Ireland as it is in Scotland, 

 the want of paper money that would have arisen with 

 the progress of trade would, in all probability, have 

 been supplied by joint-stock companies, supported with 

 large capitals, and governed by wise and effectual 

 ndes. In 1797, when the Bank of England suspended 

 its payments, the same privilege was extended to 

 Ireland ; and after this period the issues of the Bank 

 of Ireland were rapidly increased. In 1797, the amount 

 of the notes of the Bank of Ireland in circulation 

 was 621,917 ; in 1810, 2,266,471 ; and in 1814, 

 2,986,999. These increased issues led to corres- 

 ponding increased issues by the private banks, of 

 which the number was fifty in the year 1804. The 

 consequence of this increase of paper was a great de- 

 preciation of it ; the price of bullion and guineas rose to 

 ten per cent, above the mint price ; and the exchange 

 with London became as high as 18 per cent., the par 

 being 8. This unfavourable exchange was after- 

 wards corrected ; not by any reduction in the issues of 

 the Bank of Ireland, but by the depreciation of the 



