Within a year after the establishment of the Bank of England, a royal charter was granted for institu ;--ting the Bank. of Scotland. The same William Pa terson who projected the Bank of England, was also the projector.othi6 bank. He seems to have been one of those enterprising men to whom the trade and prosperity of this country are so much indebted. The original capital of the bank was 41,200,000 Scots money, or x.100,000 sterling ; and its affairs are ma • naged by a governor and deputy, with 12 ordinary and 12 extraordinary directors, annually elected by . the proprietors of stock, to whose inspection the bank submits its accounts once a year. There are twenty branches belonging to the bank, in different towns in Scotland, under the management of agents, who in general receive fixed salaries for their trouble, and altogether the affairs of the bank are very pros perous.
In the year 1727, the Royal Bank of Scotland vas erected by charter.. It is managed by a gover nor and deputy, with eighteen ordinary and extraor dinary directors ; and its accounts are exhibited four s• times a year. The business of this bank is conducted on a plan similar to that of the Bank of Scotland ; and o; the concern is also very profitable to the proprietors. A In almost every town in Scotland, a bank has been established, and in some, two or three. But these banks are private copartneries, for the purpose of discounting bills of exchange, and selling drafts on London, Edinburgh, &c. for the accommodation of merchants and others. They also, in common with the chartered banks of Scotland, issue cash accounts or loans to individuals on bonds of security ; and traffic in money and bills to a very great extent.
The French nation, though less enterprising than 13 the English, in every thing illative to commerce, F have yet, in some respects, successfully imitated them. But in the particular instance of banking they have not been so fortunate, owing more to causes connect ed with their political institutions than to any want of knowledge, genius, or activity in the people.
In the year 1716, a bank was erected in Paris by the celebrated John Law of Lauriston. The f‘ object of this bank, according to Mr Law's pro fessions, was, ".to increase the circulation of money, put a stop to the progress of usury, facilitate the exchange between Paris and the provinces, aug ment the circulation of manufactures, and enable the people to pay more easily the heavy taxes to which they were subjected." The letters patent
establishing this bank, stipulated, that the stock should consist of 1200 actions, or shares of 1000 crowns of 5000 livres each, at the rate of forty livres the mare ; so that each share was worth £250 sterling, and the whole stock of the bank £300,000 sterling.
The regulations for the government of this bank were wise and salutary. It was declared, that the bank securities belonging to, as well as the money lodged by, foreigners, should not be subject to con fiscation, even in case of war with the nations to which the proprietors belonged ; that all questions relative to the concerns of the bank should be deter mined by a plurality of votes ; those possessing from five to ten shares to have one vote, from ten to fif ' teen two votes, and so on proportionally ; that the accounts should be balanced twice a year, and two general courts held annually, at which the company's affairs should be discussed, and the dividends settled ; that the bank should not undertake any sort of com merce whatever ; that the notes should be payable at sight, and signed by the director and one proprietor ; but under the revision of an by the government.
This bank, of which Mr Law and his brothdy William were the principal partners, assumed the firm of the general bank of Law and Company; and soon obtained the confidence of the public. As the notes they issued, bore on the face of them, that they should be paid in crowns of the weight and standard of the day on which they were granted, a security was thus formed against the arbitrary practice of varying the coin ; and on this account, they were preferred by many to specie. The balance of ex change with Holland and England, rose in favour of Paris, at the rate of 4 to 5 per cent.; ant} the affairs of the bank were so prosperous, that at a general meeting held the 20th December 1717, a dividend was ordered at 7.1- per cent. for six months. There can be no doubt, but this bank would soon have rivalled that oi..kmsterdam, or of England, and pro. duced consequences highly beneficial to France ; but the arm of power interfered, and changed the institu tion from a private to a public concern. By act of council, bearing date the 4th December 1718, the public were informed, that his majesty had taken Mr Law's bank into his own hands, under the name of the Royal Bank, of which Mr Law was appointed director general, and branches were established at Lyons, Rochelle, Tours, Orleans, and Amiens.