There is now reason to think that in pursuit of this object our
Scottish neighbours have got considerably ahead of us here in England.
The subject, indeed, seems congenial to the shrewd faculties of our
northern fellow-countrymen. The founder of the Bank of England was
a Scotchman: a native of the same country originated the idea of
the Savings' Bank: and for a long period of time the facilities and
accommodations of banking have been known and practised beyond the
Tweed to an extent very much above what has been attained in this
country. Here banks may be said to exist solely or chiefly for the
wealthier classes of society; in Scotland the advantages which they
afford are widely diffused among the middle ranks, and are shared in
a large measure by the petty capitalists and retail traders of the
towns and villages. As a proof of the great extension of the system,
we find that throughout Scotland there is a bank for every 7500 of the
population--in some districts for every 5000. In London, the proportion
is stated to be only 1 for every 32,894; in some parts of England 1
for every 16,000. The rapid progress in wealth and civilisation which
has been made by a country naturally so poor and sterile, has been
attributed by many sagacious observers to the multiplication of its
banks, and to the facilities afforded by them. Capital has been made
to stimulate industry in a double ratio, by the increased activity
and quickened speed with which it circulates through the channels of
commerce. Above all, this great desideratum has been attained without
any sacrifice of the other prime requisite of sound banking--stability.
Within the last century and a-half it is computed that the loss to the
community in Scotland by the failure of the four or five public banks
which have stopped payment has not exceeded L.26,000. In England,
during a much shorter period, the loss occasioned by those fearful
catastrophes, both in London and in the country, with which experience
has made us familiar, has certainly exceeded as many millions. It
is also a fact of much significance, that in 1793, in 1825, and in
the late crisis of 1847, the Scottish banks rode out the storm which
proved fatal to so many English establishments. It seems, therefore,
no undue claim which is set up on the part of our northern neighbours,
to a better knowledge and more mature development of the principles
of banking than have been attained in this country.--_Morning
Chronicle._--[There is no more than justice done, as we believe, to
Scotch banking in this paragraph. During the last twenty years and
upwards, there have been many banks set up in England _on the Scotch
principle_, as it is called; but there have been many noted failures
among them. The fact is, that in England they introduce every feature
of Scottish banking _except the Scotch brains by which banking has
been so successfully conducted_. It is true Scotchmen have been got
to act as managers, secretaries, and cashiers; but what were all
these in the hands of a set of English directors, who necessarily
hold the chief sway? In an English joint-stock bank, the bulk of the
funds of the company will be found ventured out in the hands of a
few grand speculators, on whose good or bad fortune the fate of the
establishment depends. No such thing was ever done in a Scotch bank,
from the beginning down to this day. On the contrary, the life of the
institution lies in a quick circulation and frequent turning over of a
moderate capital amongst a _multitude of traders of good credit_. The
capital of an English joint-stock bank too often is an African river
losing itself in sands: that of a Scotch bank is a river dispersed in
a thousand channels of irrigation, to reappear in its entire form,
and with increased volume, after it has done its work. We do not
believe, after all, that there is any great witchcraft about banking
in Scotland. The prudence shown there is no more than what might be
expected of rational men. The failures in England are to be accounted
for not by their want of some extraordinary gift which chances to have
been vouchsafed to their northern neighbours, but by the fact, that
England is full of people hastening over-much to be rich, and in whose
circumstances there are of course great vicissitudes. If ever England
shall cool a little in Mammon-worship, and pursue business objects with
the moderation of the Scottish mind, it may succeed in joint-stock
banking to as great an extent as Scotland has done.]