Royal Bank of Scotland
INTERVIEW WITH ADAM TAIT, CASHIER AND GENERAL MANAGER[161]
Q. When was the Royal Bank of Scotland founded?
A. In the year 1727.
Q. When does your present charter expire?
A. It is perpetual.
Q. How many branches have you?
A. One hundred and fifty-two.
Q. Are all your branches of the same class, or have you main and subsidiary branches?
A. In some cases there are sub-branches. Some are mainly or almost entirely deposit branches; others have few deposits, but a large advance business.
Q. Is the business conducted at your branches of the same class as at your office in London?
A. No; the London office is itself a branch office and much of the ultimate settlement of balances takes place there. The conduct of the ordinary London business is on the same lines as that of any other London branch bank. No notes can be issued in London.
Q. Do your branches have business relations with merchants, farmers, and all classes of people in their respective localities?
A. Yes, they have business relations with all classes of people.
Q. What is the law governing your note issues, and how are note issues limited and how secured?
A. The act of Parliament of 1845 governs our note issue. There is no limit to the amount of notes that may be issued, but the bank is required to hold gold (and silver to an extent not exceeding one-fifth of the total) against the notes in the hands of the public on the average of each month, and that at its head office in Edinburgh—gold held at branch offices does not count—to an amount sufficient each week on Saturday to cover the notes in the hands of the public in excess of a certain amount specified, £216,451.
Q. To what extent are your notes legal tender in Great Britain?
A. Our notes are not legal tender at all.
Q. What other banks have the right of issue in Scotland?
A. The Bank of Scotland, the British Linen Bank, the Commercial Bank of Scotland (Limited), the National Bank of Scotland (Limited), the North of Scotland and Town and County Bank (Limited), the Union Bank of Scotland (Limited), the Clydesdale Bank (Limited).
Q. Are the notes of your issuing banks secured; and if so, how?
A. They are not secured. In case of the liquidation of the five last-named banks, however, their shareholders are unlimitedly liable for their notes and they are liable to contribute a sum necessary to restore to the general assets the sums that may have been paid out of the same in respect of claims under notes.
Q. What is the total amount of their outstanding issues?
A. About £7,500,000.
Q. Do you pay the Government in the form of taxes or otherwise, either directly or indirectly, for your privilege of note issue?
A. Yes, we all pay a license duty of £30 for each place at which notes are issued, and a tax of 8s. 4d. per £100, or a penny per £1, on the average amount of notes in the hands of the public at the close of each week.
Q. Is it your custom to carry a fixed amount in government securities?
A. Yes, but the amount is not rigidly fixed.
Q. Do you discount any but prime bills?
A. Yes; we do all classes of business.
Q. Is it your custom to employ surplus funds in purchase of bills from discount houses?
A. Yes; bills accepted by London banks.
Q. Do you rediscount bills for other banks?
A. No; except for foreign or colonial banks who are correspondents.
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. Yes.
Q. What, if any, artificial means are taken by you to secure changes in the volume of currency (notes and coin) to make it responsive to business demands?
A. None are deemed necessary. Our system works automatically. Our note issue is unlimited; we are only required to provide gold to cover the amount in the hands of the public at the close of each week and on the average of each four weeks.
Q. What is the customary charge for acceptance of a ninety-day bill?
A. Five shillings per cent.
Q. Your acceptance constitutes what is known in London as a prime bill?
A. Yes.
Q. Do you pay interest on both current accounts and deposit accounts?
A. It is our custom to pay interest on deposits only. In London, however, it is different; there interest is allowed in special cases on large balances on current accounts if left for some time.
Q. How does the bank rate affect the rate allowed by you on deposit?
A. The Scotch banks all allow the same rate and charge the same rates for discounts and overdrafts, and these are fixed relatively to the Bank of England rate. Our deposit rate is usually 1-1/2 per cent. under the minimum bank rate.
Q. Were most of your branches organised by you or were most of them other institutions purchased by you?
A. Most of them were originated by ourselves.
Q. Have you in mind how many branches you had ten years ago?
A. About 136.
Q. What relations do the Scotch banks bear to the Bank of England? Do they deal with it directly?
A. The Royal Bank of Scotland has an account with the Bank of England, which has been in operation since 1728, and it collects bills and cheques for the Bank of England all over Scotland.
Q. Do you regard your system of currency issue as sufficiently elastic for your needs?
A. Yes; there never has been any difficulty. Moreover, no Scotch bank has ever failed to pay its creditors, including the holders of notes, in full.