From the eagerness of the proprietors of the Equivalent Stock to be engaged in some profitable business, as detailed under December 1719, it might have been expected that they would sooner or later fall upon some mode of effecting their wishes. All attempts to come into connection with the Bank of Scotland having failed, they at length formed the bold design of setting up a new bank—bold, in as far as it was entirely a novelty, there being no thought of a second bank even in England, where business was conducted upon so much greater a scale than in Scotland. It seems to have been by engaging the good-will or interest of the Earl of Islay, that the object was attained. The Bank of Scotland in vain published a statement shewing how it was quite competent, with its thirty thousand pounds of paid-up capital, to conduct the business of the country, and really was conducting it satisfactorily. In vain did Scottish jealousy try to raise a cry about the large proportion of English shareholders in the new concern. It received a royal charter, which was the last document |1727.| of the kind prepared before the king set out on his fatal visit to Hanover, and required a warrant from the new sovereign before the seal could be appended to it. The Earl of Islay was made governor, and the Lord President Dundas became deputy-governor. In December they opened their office, with a capital of £111,000; and in the first week of the new year, they began to issue notes ‘having his present majesty King George II.’s picture in front.’[[661]] At first, these notes were expressed in Scots money; but the time had now come when the people of Scotland began pretty generally to adopt the English denominations, both in their accounts and in common parlance; so this fashion was not kept up by the Royal Bank above two years. It is unnecessary to remark that the new bank prospered, and now ranks second to none in respectability. But this only makes the more remarkable the dreary anticipations which were formed at the time by those whom it rivalled.
‘Whatever was said while the Equivalent Society’s charter with banking powers was a-seeking, or what has been said since the passing thereof, that there was no design of prejudicing the Old Bank—nobody that knows the nature of banking does believe that two banks can be carried on in the same country; for it is impossible to manage and keep them up, without interfering and rubbing upon one another, unless rules and regulations could be made to prevent it; and it is impossible to digest regulations for executing such a design, but what must make the interests of the two companies reciprocal, and the product of their trade mutually to be communicated; and so two different offices, under distinct management and direction, would be a needless charge and trouble. Therefore the gentlemen of the [Old] Bank did from the beginning lay their account with an attack from an enemy, and a foreign one too, with home alliances.’[[662]]
Following up this terrible view of the case, the Bank of Scotland, for some time before the new establishment was opened, discontinued lending money, as a matter of precaution, thus creating considerable distress among the mercantile classes, and of course justifying, so far, the establishment of a new source of accommodation. When the Royal Bank was fairly afloat, the Bank of Scotland proceeded to the yet greater extremity of calling up former loans, thus deepening the distress. ‘The country,’ says Mr Wodrow in a kind of despair, ‘is not able to bear both banks. The new bank would fain have the old coalescing with them; but |1727.| they bear off. It’s a wonder to me how there’s any money at all in the country.’[[663]]
A pamphlet having been published in the interest of the Bank of Scotland on this occasion—being the Historical Account already more than once quoted—another soon after appeared in justification of the Royal Bank, though professedly by a person unconnected with it.[[664]] ‘It can be no secret,’ says this writer, ‘that a great number of people of all ranks were creditors to the public in Scotland by reason of offices civil and military, and that the Equivalent stipulated by the act of Union fell short of their payment; that in 1714 they obtained an act of parliament constituting the debts due to them, but that no parliament provision was made for a fund for their payment till the year 1719, when a second act was made, appropriating to that purpose a yearly fund of £10,000 sterling, payable out of the revenues of customs, Excise, &c., preferable to all payments except the civil list. Between the first and the second act, many of the proprietors, being doubtful that any provision would be made for them by parliament, and others being pressed by necessity, chose to dispose of their debentures (these were the legal vouchers ascertaining the debts due to the persons named in them) as they best could, and to the best bidder. Many of them were carried to London, but a very considerable part of them still remains in the hands of Scots proprietors, partly out of choice, partly by reason of some legal bars that lay in the way of issuing debentures, and partly by purchasing them back from England.’
In consequence of powers in the act of 1719, ‘his late majesty did, by letters-patent in 1724, incorporate all persons who then were, or thereafter should be, proprietors of the debentures whereby that public debt was constituted, to the end that they might receive and distribute their annuity.’ His majesty having at the same time promised powers and privileges to the corporation as they might request, it petitioned him for those of a bank in Scotland, which he and his successor complied with, limiting the power to ‘such of the company as should, on or before Michaelmas 1727, subject their stock, or any share of it, to the trade of banking.’
There is, further, a great deal of angry controversial remark on the Old Bank; but the most material point is the allegation, that |1727.| that institution ‘divided 35, 40, 50 per cent.’ by the use of ‘other people’s money.’ The author adverts with bitterness to the harsh measures adopted by the Old Bank in prospect of rivalry. ‘It is a hard thing,’ says he, ‘to defend the conduct of the Old Bank upon the prospect of a rivalship. Lending is superseded; a tenth is called from the proprietors, and all their debtors threatened with diligence for a certain part or for the whole of their debts, which diligence has since been executed.... Why did they carry their revenge (as it is universally known they did) to every one who had the least relation, alliance, friendship, or connection with the proprietors of that bank [the Royal]?... Why were the first examples of their wrath made out of the most known friends of the present establishment, and why were the disaffected remarkably and visibly spared?’
Considering that the Bank of Scotland had never yet had more than thirty thousand pounds sterling of capital paid up, the fact of the larger stock of the Royal, and their having £30,000 of specie to trade with distinct from their stock,[[665]] become features of importance, as shewing the increasing business of the country.
From a folio broadside[[666]] containing the ‘Rules to be observed by such Persons as keep a Cash-accompt with the Royal Bank of Scotland,’ it appears that ‘no sum paid into the bank or drawn out of it, be less than 10l. sterling, nor have in it any fraction or part of a pound; and in case of fractions arising by the addition of interest at settling an accompt, such fractions are to be taken off by the first draught or payment thereafter made.’ Sums of five pounds and upwards are now taken in and given out at all the Scottish banks (1860).
June.
Witchcraft, now generally slighted by persons in authority in the south, was still a subject of judicial investigation in the far north. Wodrow, in his Renfrewshire manse, continued to receive accounts of any transactions in that way which might be going on in any quarter, and, under 1726, he is careful to note ‘some pretty odd accounts of witches’ which he had received from a couple of Ross-shire brethren. One of them, ‘at death,’ he says, and it is to be feared that her death was at the stake, ‘confessed that they had by sorcery taken away the sight of one of the eyes of an |1727.| Episcopal minister, who lost the sight of his eye upon a sudden, and could give no reason of it.’[[667]]