Miscellaneous. 



184 



on a cash credit of a thousand pounds, operations to the extent of fifty thousand 

 pounds took place in a week. It was also elicited that on a cash credit of five 

 hundred pounds operations to the extent of seventy thousand pounds took place 

 in a year. One witness stated that in a small country bank operations had taken 

 place to the amount of ninety millions during a period of 21 years, and that the 

 whole loss of the bank during that period did not exceed twelve hundred pounds. 

 It was declared that at that time, there were twelve thousand cash credits 

 guaranteed to persons in Scotland, and that there were 40,000 persons bound as 

 sureties— persons who were interested in the integrity, prudence, and success of 

 the others, for the sureties (cautioners as they are called in Scotland) keep a 

 watchful eye on the proceedings of those for whom they stood security, and have 

 always the right of inspecting their accounts with the bank, and of stopping it at 

 any time if irregular. The witnesses before the Parliamentary Committee declared 

 that the effects were most remarkable on the morals of the people. 



" All these marvellous results," says an eminent Scotch writer, " which have 

 raised Scotland from the lowest depths of barbarism up to her present proud 

 position in the space of 150 years are the children of pure credit." It is no exaggera- 

 tion but a melancholy truth that at the period of the revolution in 1688 and the 

 establishment of the Bank of Scotland, that country, partly owing to a series of 

 disasters as cannot be paralleled in the history of any other independent nation, 

 and partly owing to its position at the very outskirts of civilisation, and far 

 removed from the humanising influence of commerce, divided into two nations 

 aliens in blood and language, was the most utterly barbarous and lawless country 

 in Europe. And it is equally undeniable that the two great causes of her rapid 

 rise in civilisation and wealth have been her systems of national education 

 and banking," 



" Her system of banking has been of infinitely greater service to her than 

 mines of gold and silver. Her banking system has tended immensely to call forth 

 every manly virtue ; mines of the precious metal would probably have demoralised 

 her people. In the character of her own people, in their steadiness, their industry 

 and their honour, Scotland has found wealth infinitely more beneficial to her than 

 all the mines of Mexico and Peru. The express purpose of these banks was to 

 create credit, incorporeal entities, created out of nothing for a transitory existence, 

 and when they had performed their functions, vanishing again into nothing from 

 whence they sprang." 



LAND BANKS IN GERMANY. 



The method in which the continental nations have solved this problem of 

 finding capital to improve agriculture is quite different to the cash credit system 

 of Scotland. The first attempt at creating a land bank was made in Prussia, 

 and the inventor was a German merchant called Buring. At the close of the 

 seven years war in 1756, the land owners of Silesia found themselves in a great 

 strait. The ruin and desolation caused by the war gave rise to general distress 

 among landed proprietors. Interest and commission rose so high that they were 

 unable to meet their engagements, and Frederick the Great issued a decree 

 suspending the payment of all interest on estate debts for three years, and a 

 subsequent decree extended it to a further period. It was at this time that Buring 

 came forward with his system of raising money on land credit. The system of 

 Government Funds, suggested to Buring the idea of creating a similar species 

 of land stock. Governments, as we all know, can always borrow much cheaper 

 than landlords, because the title is indisputable and the securities are far more 

 valuable than those of private individuals. So there is no impediment to the 

 negotiability of Government paper. Buring therefore conceived the idea of sub- 



