The Scottish Provincial Banking Companies, 1747-1864.

Abstract

A study of the early Scottish provincial banks has been long overdue. In view of the praise and international emulation of the Scottish banking system in the nineteenth century and the subsequent accolade of historians, it is perhaps surprising that the wealth of surviving bank archives has not been subject earlier to the kind of intensive treatment that is the achievement of this book. Charles Munn first examines the evolution of the provincial banking companies from their local business environments, pointing out the intimate and mutually supportive links between the two throughout the economic vagaries of the period. Secondly, he analyzes in detail the banks' business organization, emphasizing in particular the multiple ownership and branch networks that distinguished them from their English counterparts. Some comparisons with the English system are also made in the third section of the book, which concentrates on the role of Scottish institutions in the finance of the economy. Free note issue and the widespread practice of cash credits stand out as unique features of the Scottish system, at least before the joint stock enabling legislation that did much to transform banking in England. Until now, historians interested in Scottish provincial banking have had to rely either on general monetary and banking studies or on the few existing monographs of particular industries or banks. In bridging a wide gap in the historiography and, in particular, in marshalling the detailed minute-book and balance-sheet evidence from more than twenty banking institutions, Munn has succeeded admirably. For the business historian the book is a fine demonstration of the extent to which balance-sheet data can be collated and compared and includes a useful discussion of the pitfalls of using such documents for a period when accountancy, even among the Scottish bankers, was still in its infancy. Using these data Munn's analysis suggests that, despite their large partnerships and co-partnerships, the Scottish banks were characterized by failures and instability to a much greater extent than was previously thought, particularly by the English bankers of the period who so admired the Scottish system. The success of the Scottish provincial banks in terms of customer satisfactionproviding a cheap and expansive system of credit supply-is also stressed but, as Munn points out, in the current state of knowledge the difficulties of comparison with English banks in this respect are immense. It is perhaps a pity that the relatively narrative sections of the book, on the rise and fall of the banks and their organization, are much longer than the more analytical discussion of their role in the economy and particularly in the finance of enterprise. This section is half the length of the other two and provides only a taste, albeit an interesting one, of the relationship between the banks and the accommodation of their clients. It would have been interesting if the study could have included a look at the business interests of bank partners and whether a partner could rely on favorable credit terms from his bank. The book is also marred by the rather dry thesis style of the exposition, although this is to some extent mitigated by a lively choice of contemporary quotations. Clear lay-out makes the book an easy reference work for student use and the publisher has kept the price very reasonable given the high standard of production, placing it within reach of the private as well as the institutional buyer.