Readings in Money and Banking Part 49

A. In 1695.

Q. When does your present charter expire?

A. By act of Parliament the "governor and company of the Bank of Scotland" have "perpetual succession."

Q. How many branches have you?

A. One hundred and sixty-three branches and twelve sub-branches in Scotland: also an office in London.

Q. How are your branches managed?

A. By agents (managers at London and Glasgow) appointed by the directors.

Q. Do your branches have business relations with merchants, farmers, and all cla.s.ses of people in their respective localities?

A. Yes.

Q. What is the law governing your note issues, and how are note issues limited and how secured?

A. The bank is authorised to issue, without holding coin against them, notes to the value of 396,852, but for any excess beyond that amount we must hold, at the head office, an equivalent value in gold coin, one-fourth of which may, however, be in silver coin.

Q. Will you state (a) the cla.s.s of bills usually discounted by you, giving the number of names required; (b) the minimum size; and (c) the maximum length of time to run?

A. Mercantile bills, also a few accommodation bills, usually two names; minimum, say, 10. The maximum length of time to run is six months.

Q. What cla.s.ses of collateral are accepted by you for loans?

A. Personal security, marketable securities, life policies, mortgages over s.h.i.+ps, s.h.i.+pping doc.u.ments, etc. In the important banking centers of Scotland lending against collateral security has become largely prevalent.

Q. Do you rediscount bills from other banks?

A. No.

Q. Explain the phrase "cash credits," and upon what conditions are they given?

A. A "cash credit" is a credit allowed, in virtue of which a customer may draw cheques on the bank until the balance due to us reaches a certain fixed limit. The account is an ordinary operative one, and interest is charged on the balances actually due to the bank from day to day.

Q. Have you in mind how many branches you had ten years ago?

A. One hundred and twenty.

Q. Do you ever buy any shares of railroad or industrial companies?

A. Yes; of the highest cla.s.s.

Q. Do you ever own bank shares?

A. No.

ROYAL BANK OF SCOTLAND

INTERVIEW WITH ADAM TAIT, CAs.h.i.+ER AND GENERAL MANAGER[161]

Q. When was the Royal Bank of Scotland founded?

A. In the year 1727.

Q. When does your present charter expire?

A. It is perpetual.

Q. How many branches have you?

A. One hundred and fifty-two.

Q. Are all your branches of the same cla.s.s, or have you main and subsidiary branches?

A. In some cases there are sub-branches. Some are mainly or almost entirely deposit branches; others have few deposits, but a large advance business.

Q. Is the business conducted at your branches of the same cla.s.s as at your office in London?

A. No; the London office is itself a branch office and much of the ultimate settlement of balances takes place there. The conduct of the ordinary London business is on the same lines as that of any other London branch bank. No notes can be issued in London.

Q. Do your branches have business relations with merchants, farmers, and all cla.s.ses of people in their respective localities?

A. Yes, they have business relations with all cla.s.ses of people.

Q. What is the law governing your note issues, and how are note issues limited and how secured?

A. The act of Parliament of 1845 governs our note issue. There is no limit to the amount of notes that may be issued, but the bank is required to hold gold (and silver to an extent not exceeding one-fifth of the total) against the notes in the hands of the public on the average of each month, and that at its head office in Edinburgh--gold held at branch offices does not count--to an amount sufficient each week on Sat.u.r.day to cover the notes in the hands of the public in excess of a certain amount specified, 216,451.

Q. To what extent are your notes legal tender in Great Britain?

A. Our notes are not legal tender at all.

Q. What other banks have the right of issue in Scotland?

A. The Bank of Scotland, the British Linen Bank, the Commercial Bank of Scotland (Limited), the National Bank of Scotland (Limited), the North of Scotland and Town and County Bank (Limited), the Union Bank of Scotland (Limited), the Clydesdale Bank (Limited).

Q. Are the notes of your issuing banks secured; and if so, how?

A. They are not secured. In case of the liquidation of the five last-named banks, however, their shareholders are unlimitedly liable for their notes and they are liable to contribute a sum necessary to restore to the general a.s.sets the sums that may have been paid out of the same in respect of claims under notes.

Q. What is the total amount of their outstanding issues?

A. About 7,500,000.