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SCOTCH BANKING 
153 
that it was impossible to circulate bills on the security of A.D. 1659 
wealth which could not be rapidly realised, and they would 
not subscribe. Experience as to-the depreciation of notes were be- 
which could be circulated, even though not immediately con- il 
vertible, was gradually acquired. It was brought to light understood. 
in Scotland by the issue of notes with an optional clause? 
which permitted the bank to defer payment for a period 
of six months, and still more forcibly in England by the 
phenomena which occurred after the suspension of cash 
payments in 17973, 
219. The fact that Scottish economic life since the Te bank- 
Union has developed in such remarkable independence of AA 
that of England is principally due to the special features Jacilivated 
of the Scottish banking system. Poor as Scotland was, and dnl 
large as is the monetary drain to which she has been ex- there. 
posed?, she has been able to dispense with the aid of wealthy 
outsiders for the development of her resources, and has relied 
almost entirely on her own capital. There are curious links 
of connection, and curious differences, between the foundation 
ind the development of banking, both of issue and for 
leposit, in the two countries. 
The Bank of Scotland was founded at the same time as Zk Bank 
she Bank of England, and on very similar lines so far as its o Scotland 
business was concerned ; but as there was no public debt to 
be financed, the Scotch institution never established close 
relations with the Government, or obtained a permanent 
monopoly. It was started in the same year as the Darien 
Company, and perhaps seemed a less promising enterprise 
than that unfortunate undertaking. Its capital was to 
sonsist of £12,000 sterling (£100,000 Scots), and by the 
beginning of 1696 £10,000 was paid up’, so that the Bank 
of Scotland was able to start business, and to make advances 
of its notes to the public; and from 1704 onwards it circu- dssued £1 
lated the £1 notes® which have formed such a leading feature pics the 
Commons in 1693, and was favoured by the Government in 1696 (Macaulay, 
v ; ri below, p. 454. 2 See p. 699 below. 
3 R. Somers, The Scotch Banks, 116. 
4 Acts of Parliament of Scotland, 17 July, 1695, c. 88. They had a monopoly 
for 21 years. 8 A. W. Kerr, History of Banking in Scotland, 23. 
6 There appears to have been an unsuccessful issue in 1699. Graham, The 
P1 Note 14