They all, it is understood, allow interest upon money deposited to remain for some time, but generally do not allow interest on money lodged upon current accounts or at call.
Prirate Banks in England and these there were 248, of which 56 were in London. Of the provincial banks, 108 had an authorized issue of -£2,295,073.
In the case of all these banks, whether issuing or non-issuing, their profits are chiefly derived from the use of their deposits.
There are also in London, 56 foreign, Indian, and British colonial joint-stock banks.
Banks in earliest banking institution in north Britain was the nank of Scotland, instituted by a charter of incorporation from the Scots parliament in 1695. The original capital was £1,200,000 Scots, or £100,000 sterling. In 1774, the amount of stock was extended to £200.000 sterling; now it is £1,250,000 sterling. In 1727, a new and similar establishment was constituted under the title of the royal bank of Scotland, whose advanced capital is now £2,000,000. In 1746, another association was formed, and incorporated by royal charter, with the title of the British linen company: Front £100,000, its capital has increased to £1,000,000. Besides those three banks, there are in Scotland other seven joint-stock banks, with capitals varying from £1,000,000 to £150,000. There are now no private banks. The amount of deposits is probably about £70,000.000, on which interest is allowed. Their authorized issue of notes is £2,676,350, but their actual issue is about double that amount. The western hank, with a capital of £1,500,000, a circulation of aboVe £400,000, having 1300 share-holders, and about 100 branches, suspended payments in 1857, owing to a reckless system of discounting bills. The share-holders. however, being under unlimited liability (see JOINT. STOCK COMPANY), neither the depositors nor the note-holders sustained any loss. In Oct., 1878, the city of Glasgow bank, with 133 branches, suddenly suspended payments; the liabilities amount ino to £12,400,000, and the estimated assets, £6,300,000, leaving a probable deficiency of £6,100,000. It was found that for three years before the stoppage, the states of the bank's affairs, issued annually to the share-holders, had been falsified, and that advances had been made to four firms against utterly inadequate securities, to the enormous sum of nearly £6,000,000. The directors and the manager were tried for and convicted of tampering with
the reports, and sentenced to imprisonment. It has been arranged to wind up the bank by liquidation, and it is feared that the calls to be made upon the share-holders will involve nearly every one of them in utter ruin. In consequence of £400 of the stock being held by the Caledoniaa bank in security of an advance, it has had temporarily to suspend payment.
In consequence of allowing interest on deposits, the banks in Scotland may he said to hold the whole capital of the country, minus only the money passing from hand to hand. This wide-spread system of depositing is greatly aided by the establishment of branches from the parent-banks; and these branches are found in every small town in the kingdom. The entire untidier of branch-banks in Scotland in 1879 was about 850. At these branch-banks, the agent (usually a respectable person in business) discounts bills within certain limits, issues letters of credit, and pays out notes, and also gives cash on demand for them; though, strictly, the notes of a bank are only payable on demand at the head-office. By a strict system of supervision, Scottish branch-banks are usually well conducted, and are of great service in every department of trade. For one thing, they have powerfully contributed to extinguish burglary and highway robbery, as no one thinks of keeping money, except to trilling amount, either in his house or about his person. At all the great fairs, bankers attend to receive deposits, and to pay cheeks. Forgeries of Scottish hunk-notes are now unknown.
The banks in Scotland, like the banks in Ireland, but unlike the provincial banks in England, are allowed to issue notes beyond their fixed issues, on holding gold equal in amount to the extra issue. But as the gold thus retained is, like the other gold in reserve, liable for all the deposits, as well as for the whole circulation of a bank, if it should fail, the security of the establishment is increased only in a small degree by this arrangem nt, which, apart from the loss of profit to the bank on the gold unemployed, is anended with inconvenience at those seasons when the circulation is extended. In Scotland. and Ireland also, banks can issue one-pound notes; the English banks are not permitted to circulate notes of less value than £5.