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The History of Glasgow
Volume 3 - Chapter XXV - The Rise of Banking and the Deepening of the Clyde

UPON the final clearing away of the Jacobite menace, after the battle of Culloden in 1746, Glasgow found prosperity flowing upon it in a rising tide. One of the most significant evidences of this development was the establishing of the joint-stock banks, which began in the year 1750. Previously the working of finance in Scotland had been rather a cumbrous business. Down to the time of George Hutcheson, the Glasgow notary, money could only be borrowed on the security of actual property—wadsets or bonds upon landed estates, or the deposit of jewels and other valuables. In The Fortunes of Nigel Sir Walter Scott gives a fair picture of the latter process in the dealings of King James VI. with the Edinburgh goldsmith and money-lender, George Heriot. George Hutcheson introduced the less cumbrous method of lending money upon the personal security of responsible guarantors, and sixty years later the Darien Company carried matters further when it granted loans to its subscribers on the security of their holdings of its own shares. Edinburgh led the way in the setting up of regular joint-stock banks in Scotland. The Bank of England had been founded in 1694 on the plan of the Dumfriesshire farmer's son and West Indian merchant, William Paterson, and, following its example, the Bank of Scotland had been incorporated in the following year. Its capital to begin with was £100,000, the amount called up £10,000, and its business limited to the advancing of money on bills and bonds by the issue of notes for sums of £5, £10, £50, and £100 sterling. A second company, the Royal Bank of Scotland, was established by charter in 1727 with, for its capital, a large part of the debentures, amounting to £248,550, which had been issued in payment of the Scottish national debts, and upon which interest of £10,000 per annum was to be paid out of the Scottish customs and excise. Little more than a fourth part of the capital of this company was held in Scotland, so the Royal had only a branch office in Edinburgh, but its first governor was Archibald, Earl of Ilay, afterwards third Duke of Argyll. [Hist. of Royal Bank of Scotland, by Neil Munro, p. 34.]

One of the difficulties of these early banks is illustrated by an incident which took place on 27th March, 1728. On that day Andrew Cochrane, Provost of Glasgow, presented at the office of the Bank of Scotland £900 of its notes for change into coin of the realm. There was none to give him. Two-thirds of the capital of the bank and all its notes had been lent out on heritable and personal bonds, which could not be immediately turned into cash, and already there had been a run on the bank for the cashing of its notes, engineered, it was suspected, by the rival Royal Bank, which had emptied the till. The bank claimed the privilege of deferring payment of cash, and promised interest until payment was made. The Court of Session upheld this claim, but Provost Cochrane carried the case to the House of Lords, which reversed that decision and declared that banks must meet their promises to pay in the same manner as private individuals. [Ibid. p. 60.] In this matter the stout Glasgow provost vindicated the principle upon which the entire integrity and success of the Scottish banking system since then have been based.

The banking experience of the western city itself had been suggestive enough. In 1696, the year after its foundation in Edinburgh, and again in 1731, the Bank of Scotland had opened branch offices in Glasgow, but had closed them after a short

experience. The reason usually given for this want of success is that the bank would not deal in bills of exchange. [Buchanan's Ranking in Glasgow during the Olden Time.] There is room, however, to surmise that the enterprise laboured in Glasgow under the prevalent feeling that the promoters of the Bank of Scotland were more or less Jacobite in sentiment. Its Tory directors had opposed the Treaty of Union, its treasurer was a Jacobite, and the Government was known to suspect its political sympathies. [Hist. Royal Bank, p. 52.] On the other hand the Royal Bank was notedly Hanoverian in sympathies. Its governor and the most active members of its staff were Campbells, and it was known to have the warm support of the Duke of Argyll, the victor of Sheriffmuir. It was significant that when the Government granted compensation to the city for its losses on account of the Jacobite visitation of 1745, the money was paid through the Royal Bank, [Burgh Records, 8th Nov. 1749.] and when in the year of the great frost Glasgow found it necessary to borrow a large sum for the feeding of the poor, it was from the Royal Bank that the money was obtained. [Hist. Royal Bank, p. 86.] But the Royal had no branch in the western city till 1783, when the famous Glasgow citizen, David Dale, was appointed joint agent there.

Meanwhile in Glasgow a considerable banking business was carried on by private traders. In the Edinburgh Evening Courant in July, 1730, James Blair, merchant, at the head of Saltmarket, advertised that, at his shop there, "all persons who have occasion to buy or sell bills of exchange, or want money to borrow, or have money to lend on interest, etc., may deliver their demands." It was not till 1750 that the hour struck when Glasgow was to have a bank of its own. At that time the largest banking business in the city was probably being done by the Glasgow Tanwork Company, which carried on its ordinary operations, with tanning pits and other appurtenances, beside the Molendinar, near the Gallowgate. Among its patrons were Provost Andrew Cochrane and many other notable merchants. Fifteen years later, in 1765, its deposits amounted to no less than £40,000. [The Tanwork Company was entrusted with large deposits from many parts of Scotland, on which it paid interest at 4½ and 5 per cent. A list of the depositors and the sums at their credit is given by Senex in Old Glasgow and its Environs, p. 123.] It was in January,1750, that the first regular Glasgow bank began business in a small office in the old dwelling of the Coulters at the south corner of Briggate and Saltmarket. [Photograph in The Old Ludgings of Glasgow, p. 58.] Its partners were William McDowall of Castle Semple, Andrew Buchanan of Drumpellier, Allan Dreghorn of Ruchill, Robert Dunlop, merchant, Colin Dunlop of Carmyle, and Alexander Houston of Jordanhill, all men of wealth and high standing in the city. It was known as the Ship Bank, and its operations were carried on under the firm name of Colin Dunlop, Alexander Houston & Co. It owed its success largely to the unremitting labours of the famous Robin Carrick, its manager for a long lifetime. "Sicker, far-seeing, resolute, passionless, spending his days in the dingy Bank parlour, and his lonely, joyless evenings in the old flat above, he died there on 20th June, 1821. [Mitchell, Old Glasgow Essays, p. 21. There remained, nevertheless, one grain of sentiment under the hard crust of the grim old banker's nature. George Buchanan, the great Tobacco Lord, builder of the famous Virginia Mansion, when at the height of his fortunes had employed a divinity student as a tutor for his family, and afterwards got him inducted as parish minister of Houston. Later, when George Buchanan's son, Provost Andrew Buchanan, was helping to found the Ship Bank, he got his old tutor's son, Robin Carrick, then about fourteen, a place as message boy in the establishment. When the crash came to the tobacco trade, with the revolt of the American colonies, the Buchanans were ruined. But Provost Andrew's brother, David, when the war was over, went to the United States, and recovered enough of the family fortunes to return and purchase again his grandfather's estate of Drumpellier. He was again on the verge of ruin through a law plea in America, when Robin Carrick died, and it was found that he had left nearly his whole fortune to the son of his father's old patron. From that circumstance the Buchanans of Drumpellier took the name of Carrick-Buchanan. Curiosities of Glasgow Citizenship, p. 25. Mitchell, Old Glasgow Papers, p. 164.] He was eighty-one years of age, and left about a million sterling Not to be outdone by their rivals in business, another group of Glasgow merchants, with Andrew Cochrane at their head, started the Glasgow Arms Bank in November of the year in which the Ship Bank opened its doors. There were twenty-six partners, and the office was a small place up a narrow stair, also in that fashionable business quarter, the Briggate. It carried on business under the name of Andrew Cochrane, John Murdoch & Company.

The procedure adopted by these banks and the others that followed them was to lodge in the hands of the Town Clerk bonds signed by all their partners guaranteeing payment of their notes. In their case a "seal of cause," such as the Magistrates and Town Council granted to the various crafts and incorporations to enable them to sue and be sued and to hold property as corporate bodies, was not required, but the joint guarantee of all the partners, thus duly registered, served a not less important purpose.

Threatened with this rivalry in the western city, the two Edinburgh banks joined forces in a rather ungenerous attempt to put the Glasgow banks out of business. For this purpose they employed a rather despicable individual. Alexander Trotter, an Edinburgh accountant, who had been an early partner in the afterwards great banking firm of Coutts & Company, was sent to Glasgow. There he set about the business of embarrassing the new private banks by collecting their notes, and then presenting them in large amounts and demanding payment in cash. The Glasgow bankers met the attacks by paying out the money in sixpences, a device which had been adopted by the Edinburgh banks themselves in a similar emergency. On one occasion a whole forenoon was taken to make a payment of, and the total amount thus cashed in thirty-four business days was £2893. Trotter, on 23rd January 1759, made a formal protest, then brought an action in the Court of Session against the Glasgow Arms Bank for payment of the notes which he held, amounting to X3447, with interest from the date of his protest, as well as 600 damages. He also asked it to be declared that the bank had no powers to limit its hours of business, but must cash its notes on demand at any time between seven in the morning and ten at night. The case drifted on for four years, and was in the end taken out of Court on the bank paying Trotter £600. The amount probably did no more than cover his expenses, and the Glasgow Arms Bank had secured the purpose of its defence. [The Scotsman, 5th April, 1826. Forbes, Memoirs of a Banking House, 2nd ed., p. 5. Reproductions of the notes of some of these old Glasgow banks, with interesting details regarding their signatories, are printed in Frazer's Making of Buchanan Street, pp. 5-8.]

During the next half-century a number of other private banking companies were established in Glasgow. In 1761 the Thistle Bank was set up by Sir Walter Maxwell of Pollok and partners; in 1769 the Merchant Banking Company by a number of small traders in the Saltmarket ; in 1785 Thomson's Bank, by a father and two sons of that name; and in 1809 the Glasgow Bank, at the south-west corner of Montrose and Ingram Streets, was founded and managed by James Dennis-ton of Golfhill. [Glasgow Past and Present, p. 462; Curiosities of Citizenship, p. 141.] At a later day the oldest and the latest of these banks united to become the Glasgow and Ship Bank, and later still, along with the Thistle Bank, were embodied in the Union Bank of Scotland. The Glasgow Arms Bank and the Merchant Banking Company stopped payment during the crisis of the French Revolution, but paid their creditors in full. [Hist. Royal Bank, p. 156.]

It cannot be doubted that the credits and other facilities afforded by these banks played a large part in developing the trade and industry of Glasgow in the second half of the eighteenth century. Nor was the Town Council slow to avail itself of the financial convenience which the banks afforded.

In 1754, when considerable expense fell to be incurred in improving certain turnpike roads leading into the city—the Renfrew and Three Mile House roads, and the road from Gorbals by Paisley Loan to Govan—it was arranged to take credit "from any of the banks in the city" to defray the cost, till this could be recovered out of the tolls. And a few months later it was agreed to open an account with the "new bank company," otherwise the Glasgow Arms Bank, upon which the Provost was empowered to draw sums for the town's use up to a total amount of £1000. [Burgh Records, 16th April, 26th Sept. 1754.]

Another enterprise which the rising trade of Glasgow quickened with astonishing effect was the deepening and improvement of the harbour. Again and again in the two hundred years since it became a self-governing community the city had made efforts to secure its passage to the open sea. As long ago as the year 1566 it had joined with the burghs of Renfrew and Dunbarton in an attempt to deepen the channel at Dumbuck, [Cleland's Annals, 1817, p. 371.] and again in 1611, after securing from James VI. the freedom of the river "from the Clochstane to the Brig of Glasgow," it had sought the advice of Henry Crawfurd, the Culross engineer, and under his direction had again attacked the obstruction at Dumbuck with chains, ropes, hogsheads, and other apparatus. [Burgle Records, i. 329.] But these efforts still left the river little more than a shallow salmon stream. Over a hundred years had elapsed since William Simpson, that native of St. Andrews whom McUre describes as "a great projector" of Glasgow trade, "built two ships at the Bremmylaw, and brought them down the river the time of a great flood." When the first Glasgow vessel to trade with Virginia, a craft of sixty tons, was built on the Clyde in 1716, the work had to be done at Crawford's-dyke, between Port-Glasgow and Greenock, as no natural flood would have been great enough to float her down the river. Port-Glasgow, it is true, in the fifty years of its history had thoroughly justified its existence, but the conveyance of the transhipped cargoes between that seaport and the parent city still presented serious difficulties by reason of the sandbanks, islands, and shallow channel of the Clyde. Notwithstanding these hindrances, the extension of trade made it necessary in 1723 to enlarge the quay at the Broomielaw, and the Town Council, the Trades House, and probably the Merchants House, spent I833 6s. 8d. sterling in extending it as far as "St. Tennochis burn foot, opposite to the Dowcat Green"—that is, about the present Dixon Street, where the Dowcat or Old Green began. [Burgh Records, 22nd June, 1722; 12th Nov. 1724.] Regarding the harbour, as thus improved, McUre, a few years later, indulged in one of his bursts of eloquence. "There is not," he says," such a fresh water harbour to be seen in any place in Britain. It is strangely fenced with beams of oak, fastened with iron bolts within the wall thereof, that the great boards of ice in time of thaw may not offend it ; and it is so large that a regiment of horse may be exercised thereupon." [Hist. Glasg., 1830 ed., p. 231, append. 347.]

McUre's remarks may have helped to stimulate further enterprise, for in 1736, the year in which his History was published, the Town Council ordered an inspection to be made of the sandbanks in the river below the Broomielaw, and agreed to expend £20 sterling "for an experiment upon one of the sandbanks for clearing the river." [Burgh Records, 2nd July, 1736.] In this small and tentative fashion was begun again the great engineering achievement which in two hundred years has made the Clyde at Glasgow one of the most commodious harbours in the world.

Four years later another effort was made to remove the sandbanks below the Broomielaw. The magistrates were empowered to "go the length of £100 sterling of charges thereupon," and to build a flat-bottomed boat "for carrying off the sand and shingle from the banks." [Ibid. 8th May, 1740. Instead of building a new boat the magistrates requisitioned and repaired "the Port Glasgow dirt boat."—Ibid. 29th Aug. 1740.]

Just then the success of the rising harbour town of Greenock may have given a spur to the efforts of Glasgow. Under the energetic guidance of its superior, Sir John Shaw, that place had developed into a thriving port, and secured the charter of a royal burgh, and in 1740 had repaid all the capital expended upon its harbour, and realized a surplus of 27,000 merks or £1500 sterling. Its customs realized over £15,000 per annum. [Weir's Hist. of Greenock, p. 42. Williamson's Old Greenock, p. 75.] Greenock clearly was a possible rival by no means to be despised.

In 1743 came a petition from the shipmasters of Glasgow and the Clyde ports for the setting up of a lighthouse on the Little Cumbrae, already referred to, though an Act of Parliament for the purpose was not secured till 1756. [Burgh Records, 17th Feb. 1743; 16th June, 1756.] A similar petition was received in 1751 from the merchants and feuars in Port-Glasgow, offering to supervise the marking of the channel with buoys and perches, and asking that the "mud boat" be constantly employed in cleaning the harbour there. To these proposals the Magistrates and Council promptly agreed. [Ibid. 22nd Jan. 1751.]

For the interests of Glasgow itself, however, the improvement of the channel of the upper river was a matter of more vital and immediate importance. Upon this subject the Town Council again proceeded to seek the best expert advice. James Stirling, manager of the Scots mining company's works at Leadhills, was a noted mathematician and engineer. One of his numerous papers contributed to the Transactions of the Philosophical Society described "A Machine to Blow Fire by the Fall of Water." [Stirling's career forms the subject of an article in Mitchell's Old Glasgow Essays. Third son of Alexander Stirling of Garden, he was expelled from Oxford because of his Jacobite connection, lived as a professor of mathematics at Venice for some years, but, having discovered the secret of plate-glass making, had to flee for his life in 1725. For ten years he taught mathematics in London, enjoying the friendship of Newton and other men of science, till in 1735 he was appointed manager of the mines at Leadhills.] His idea was to make Glasgow accessible to vessels of larger size by the building of locks on the river. "For his service, pains, and trouble in surveying Clyde, towards the deepening thereof by locks," the Town Council presented him with a silver tea-kettle and lamp, engraved with the city arms, at a cost of £28 4s. 4d. sterling. [Burgh Records, i. July, 1752.]

Fortunately Stirling's recommendations were not carried out, nor were those, three years later, of John Smeaton, engineer of the Eddystone Lighthouse and of the Forth and Clyde Canal. Between Glasgow Bridge and Renfrew Smeaton found twelve shoals, four of which had no more than eighteen inches depth at low water and one, some four hundred yards below the bridge, only fifteen inches. His proposal was that a weir and lock should be constructed at Marling Ford, about four miles below the bridge, to allow vessels seventy-six feet long and of four-and-a-half feet draught to pass up to the Broomielaw at all states of the tide. Had these recommendations been carried out they might have restricted the possibilities of the harbour of Glasgow for all time. But Smeaton was paid twenty guineas for his advice and the Merchants House and the Trades House proceeded to urge the Town Council to apply to Parliament for authority to proceed with the work. They declared themselves willing to pay such dues on all vessels passing through the locks as would recoup the city for the expense entailed. [Burgh Records, 5th Aug. 1757; 13th March and 11th April, 1758.] Smeaton was accordingly invited, in 1758, to elaborate the details of his scheme. At the same time Alexander Wilson, the famous typefounder, was employed to

make a survey of the river. Parliament was approached, and in due course an Act was secured—the first of the Clyde Navigation Acts—empowering the Town Council to carry out the enterprise. [George II. C. 62. Burgh Records, 13th March, 1758; 9th Jan. 1759; 31st May, 1759.] The Act empowered the Town Council to deepen the river from Dumbuck Ford to Glasgow Bridge, to make locks and weirs, and to carry out other necessary works. To this end £3200 were borrowed, and preparations were made for the construction of a lock, but on account of the difficulties encountered the scheme was in the end abandoned. [Burgh Records, 10th Aug. 1759. For details of the various schemes to improve the harbour see The River Clyde, by James Deas, engineer to the Clyde Navigation Trust, 1876. A contract was actually made with Smeaton to construct a lock and dam at the Marlingford, and in 1762 the work was going on (Burgh Records, 24th Nov. 1760; 25th Jan. 1762). Shortly afterwards, however, it was stopped, and Freebairn, an Edinburgh architect, who had been appointed master of works, made a claim for his broken engagement (Ibid. 3rd Jan., 13th May, 1763). Smeaton's tavern bill at the Exchange coffee-house while he was making his plan amounted to £18 10s. (Ibid. 26th Jan. 1761).]

In 1764 another suggestion was made which may have afforded the idea for the plan which was actually carried out. At the desire of several of the merchants one Dr. Wark submitted a proposal for deepening the river by means of its own current. His idea was to confine the current by means of a whin or furze dyke two or three yards broad. The difficulty in this case seems to have been to secure a sufficient supply of furze, and, probably for this reason, nothing more was done with the proposal. [Ibid. 26th April, 1764.]

It was not till 1768 that the project was taken up again. The Town Council then consulted John Golborne of Chester, and in the following year, on his recommendation, supplemented his report with one from James Watt, who was just then coming into repute through his improvements upon the steam-engine. Golborne's opinion was that it was "extremely practicable" to deepen the river up to the Broomielaw. By banking, straightening, and dredging he thought it possible to secure a depth of six feet of water there at neap tides and nine feet at spring tides, and the cost he estimated at £8640 or perhaps £10,000 sterling. [Burgh Records, 5th Jan. 1769.] Another Act of Parliament was then obtained, and Golborne and his nephew were employed to proceed with the work at a yearly salary of £220 sterling. [Ibid. 3rd Jan. 1771.] Golborne's plan was to use the current of the river itself as far as possible for the deepening of the channel. Thus the current at Dumbuck Ford was to be thrown into a single channel instead of two, and by means of jetties and banks the flow of the tides was made to clear away the sand from the river bed. Golborne was afterwards engaged to secure a channel six feet deep from Dumbuck lower beacon to Longloch Point, [Ibid. 2nd Nov. 1772.] and so well were the city fathers pleased with his work that they presented him with a silver cup engraved with the city arms. [Ibid. 25th Oct. 1775. The cup cost £35 8s.] Two months later, having ascertained by soundings that by Golborne's labours the channel from the Broomielaw to Dumbuck had been made actually seven feet ten inches deep, the Town Council, on the suggestion of the Trades and the Merchants Houses, gave Golborne a gratuity of £1500 sterling, with £100 to his nephew for supervising the work. [Ibid, 10th Dec. 1775.]

Almost immediately, it is true, the Town Council received complaints from Lord Blantyre and the burgh of Renfrew of damage entailed by Golborne's labours. Lord Blantyre complained that the jetties on each side of his ferry quay at Erskine had brought about an accumulation of sand which prevented the ferry boat approaching the quay, and the burgh of Renfrew alleged that the works had hurt its salmon fishery in the river. But his lordship was satisfied with the provision of thirty or forty pontoon loads of stone for the lengthening of his ferry quay, and Renfrew with a money payment which continues to be made annually till the present day. [Ibid. 2nd and 20th March, 1777; 3rd July, 5th Oct. 1787 ; 26th May, 1779. This was only the first of many claims made by the Lords Blantyre against the deepeners of the Clyde (ibid. 16th June, 1784, etc.), 5th Feb. 1784.] A similar claim was made by Paisley, a few years later, for the silting up of the mouth of the Cart, and was satisfied with a payment of £150. These, however, were insignificant drawbacks to the fact that the real and permanent development of the great harbour of Glasgow had been begun on practical lines.

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