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Miscellaneous. 



AGRICULTURAL HANKS IN SCOTLAND. 



The country which affords the greatest parallel to Ceylon of the present day 

 economically is Scotland in the latter part of the 18th century. Scotland was in 

 those days a poor country, and the people were illiterate and ignorant. The labour- 

 ing classes were poverty striken and miserable. Lawlessness was rampant every- 

 where, and the Scotch were as notorious in those days as cattle-lifters as the 

 Sinhalese are at the present day. Large tracts of land in every part of the country 

 lay waste and uncultivated. There was not enough money in the country either to 

 open up the lands for agriculture or to construct public works. But the present state 

 of Scotland is a marvellous transformation from what it was 150 years ago, and this 

 wonderful progress was entirely due to the system of cash credit introduced by the 

 Scotch Banks. A ' cash credit ' is a drawing account created by the Bank in favour of 

 a customer, upon which he may operate in the same manner as an ordinary banking 

 account. A person who applies to a bank for a cash credit is called upon to produce 

 two or more competent sureties who are jointly bound, and after a full enquiry into 

 the character of the applicant, the nature of his business, and the sufficiency of his 

 securities, he is allowed to open a credit, and to draw upon the bank for the whole 

 of its amount or for such part as his daily transactions may require. To the credit 

 of the account he pays such sums as he may not have occasion to use, and the 

 interest is charged or credited as the case may be. 



'Cash credits' are of two sorts, viz., (1) those given to private persons to help 

 them in their business, and (2) those given to promote agriculture or public works. 

 As regards the first kind of cash credit, it is said that almost every young man 

 commencing business in Scotland begins even now by means of a cash credit. 

 Solicitors. Writers to the Signet, and other professional men are, it seems, given 

 small advances to start them in business on the guarantee of two or more sureties. 

 All classes of society, rich as well as poor, are freely given cash credits, provided they 

 are men of high character. In the evidence given before a Committee of the House 

 of Commons, Mr. Monteith, M.P., stated that he was a manufacturer employing at 

 that time 4,000 hands, and that he began the world with nothing but a cash credit. 



When the Scotch first turned their energies to agriculture about the middle 

 of the 18th century, the banks in Scotland had the right of issuing notes of their 

 own, and they had habituated the people to receive their notes as money. Finding 

 that there was much scope for agriculture in all parts of Scotland, the banks 

 opened branches in every important centre and sent everywhere cartloads of 

 their pound notes. The landholders anxious to improve their lands gave long 

 leases to farmers. Upon the security of those leases and upon that of personal 

 sureties, the banks granted cash credits to farmers. The advances were made 

 entirely in the pound notes of the banks, and as the banks were very strongly 

 constituted, their notes were universally received as cash. With these notes the 

 farmers employed labourers to reclaim the land, and in a few years "bleak and 

 barren moors were everywhere changed into fields of waving corn." With the 

 produce of the fields, the farmers gradually repaid the loans, and reaped large 

 profits themselves. 



As for public works in Scotland, money for every description of them has 

 been raised by the system of cash credit. Canals, docks, harbours, roads and 

 railways have all been made in the same manner, and the debts were discharged by 

 the profits arising from the public works. The Forth and Clyde Canal was, it is stated, 

 constructed by means of a cash credit of £10,000 granted by the Royal Bank. 



These cash credits are, it is to be remembered, not meant to lie idle, but 

 they are constantly operated upon by paying in and drawing out. It was stated 

 in the evidence given before a Committe of the House of Common (in 1826) that 



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