Commercial Bank of Scotland (Limited)
INTERVIEW WITH ALEXANDER BOGIE, GENERAL MANAGER[162]
Q. When was the Commercial Bank of Scotland (Limited) founded?
A. In the year 1810.
Q. When does your present charter expire?
A. It is not limited in point of time.
Q. Has the Government any voice in the management of the bank or any interest in it through the ownership of shares?
A. None.
Q. Have the managers of the branches full control of the business in granting discounts, etc.; if not, what discretion is usually given them?
A. Agents have power to grant advances, but subject to the approval of head office. In advances of considerable amount, an agent's duty is to get authority from the head office before granting it. The discretion allowed is dependent on the size of the branch and the nature of the business and the class of customer, and on the record of the agent. By our system of reports on advances (weekly, monthly, and quarterly) we keep in close touch with the advances and means of borrowers. The London branch is, of course, on different lines, and our manager there has greater powers than an agent at a branch in Scotland.
Q. Is the business conducted at your branches of the same class as at your main office in Edinburgh?
A. Yes; very much the same. The head office has administrative work and supervision of branches, investment, etc., which does not, of course, arise elsewhere.
Q. Do you discount to any considerable amount for individuals and merchants?
A. Yes; it would perhaps be well to point out that in Scotland a large portion of advances made to traders are granted in the form of overdrafts on current accounts. The number and amount of bills in Scotland are less now than in former years. Cash payments for the purpose of obtaining discount are more frequent, and the number of bills discounted by wholesale houses is reduced in consequence.
Q. Is it your custom to employ surplus funds in purchase of bills from discount houses?
A. Only occasionally, when rates suit.
Q. Do you rediscount bills for other banks?
A. It is not our practice to do so.
Q. To what extent does bank rate govern your discount and loan transactions?
A. In ordinary transactions, altogether. In all transactions the bank rate governs as regards the minimum.
Q. Explain the phrase "cash credits," and upon what conditions are they given?
A. A cash credit account is an operative current account in security of which the principal debtor and two or more co-obligants have granted a personal bond in favor of the bank. The account is operated upon by the principal debtor, but all the parties are bound as principals and are jointly and severally liable to the bank.[163]
Q. Is the bank, through its branches, employed by other banks to any considerable extent for the transfer of funds from one city to another?
A. We act as correspondents for the large English and Irish banks and for colonial and foreign banks.
Q. Do you favor the issue of £1 notes? Why?
A. Yes; under the Scottish system, as it enables the banks to plant branches at little expense and so to open up the trade of the country in all districts and directions.
Q. It is your practice to employ your surplus funds in the purchase of prime bills through bill brokers?
A. We occasionally have such transactions.
Q. Were most of your branches organised by you, or were most of them other institutions purchased by you?
A. All of them were organised by ourselves.
Q. Is the question of the amount of reserves, either in specie or in bank, regarded as of importance by Scotch bankers?
A. I should think so, though I only know positively my own opinion.
Q. Do you ever buy any shares of railroad or industrial companies?
A. No industrial company shares and only gilt-edged railway stocks.
Q. Do you ever own bank shares?
A. No.