Revolution, Union, and Divergence—from Scotland to North Britain

Abstract

Abstract This chapter examines the Scottish monetary revolution, which emerged from attempts by the Scottish elite to solve the country’s chronic economic and monetary problems. Bank of Scotland was founded in 1695 in an attempt to alleviate the scarcity of money. It differed from its English counterpart in crucial respects, with very different implications for Scotland’s social relationships, power structures, and popular beliefs about money. The chapter argues that the monetary union of the two countries that accompanied the political union of 1707 was a key episode in Scotland’s monetary revolution, and was rendered uncontroversial by the Company of Scotland’s attempt to found a colony at Darien, whose disastrous failure triggered the final ruin of Scotland’s monetary system. The process of monetary union and the distribution of ‘the Equivalent’ are analysed to demonstrate aspects of Scottish monetary nationalism. The chapter concludes by examining the development of Scotland’s banking system in the eighteenth century. While the system’s distinctiveness is obvious, the chapter shows that Scottish banks became ever more deeply linked with British government debt and networks of credit radiating from London, giving Scotland a key role in one of Britain’s first modern, systemic financial crises in 1772. It also shows that, despite Scottish banks’ unique circulation of low-denomination banknotes, scarcity of money remained a serious problem for most Scots.