dcnro 
 
 
 BOUGHT WITH THE INCOME 
 FROM THE 
 
 SAGE ENDOWMENT FUND 
 
 THE GIFT OF 
 
 1S91 
 
 i^ 
 
Cornell University Library 
 HG3000.E34 U6 1860 
 
 Memoirs of a banking-house, 
 
 olin 
 
 3 1924 030 197 440 
 
Cornell University 
 Library 
 
 The original of tliis book is in 
 tlie Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924030197440 
 

 Dra-wji ani Engrave 3_ bj Join "Kay, lEiinbiu:^. 
 
MEMOIRS 
 
 BANKING-HOUSE 
 
 BY THE LATK 
 
 SIR miUm lOEBES OF toSHGO, BAET. 
 
 AUTHOR OF THE ' LIFE OF DB BEATTIB.* 
 
 SECOND EDITION. 
 
 WILLIAM AND EOBEET CHAMBERS, 
 
 LONDON AND EDINBUKGH. 
 1860. 
 
 its 
 

 
 A. 1 1^0'^'^ 
 
 Edinburgh : 
 Printea by W. and B. Chambers. 
 
INTRODUCTORY NOTICE. 
 
 The public is here presented with a Memoir, the genuine composi- 
 tion of Sir William Forbes, regarding the history of a mercantile 
 establishment, of which he was long the chief. The manuscript 
 having been accidentally shewn to the editor, he saw in it so much 
 that was interesting, as to be induced to plead with Sir William's 
 surviving friends for permission to place it before the world. It 
 is consequently published at the distance of folly fifty-six years 
 from the time when it was written, for the author appears to have 
 closed his narration in May 1803. 
 
 The private banking-house so long known in Scotland in con- 
 nection with the name of Sir William Forbes — merged since 1838 
 in the joint-stock Union Bank of Scotland — ^had a somewhat com- 
 plicated genealogy, reaching far back in the last century — the 
 century of progress in Scotland — and even faintly gleaming through 
 the obscurities of the one before it, when mercantile efforts and 
 speculations were taking their birth amidst the embers of scarcely 
 extinct civil wars and all kinds of private barbarisms. The 
 genealogy is here traced through a firm styled John Coutts & Co., 
 of which the principal member was John Coutts, lord-provost of 
 Edinburgh in the years 1742 and 1743, to Patrick Coutts, who 
 carried on considerable merchandise at Montrose in the reign of 
 William III. The concern is shewn as the main stock from which 
 branched off the eminent London banking firms of Coutts & Co., 
 Strand, and Henries & Co., St James's Street. 
 
IV INTEODUCTORY NOTICE. 
 
 high taste and refinement, and the practice of all the active virtues. 
 One would need to have lived through the last fifty years in Scot- 
 land, to he fully aware of the excellences of various kinds which 
 made people speak with such veneration of Sir William Forbes, 
 and maintain a faith in his modest private hank such as is now 
 scarcely given to the joint-stock of large copartneries. It was but 
 participation in a universal feeling which caused Scott to thus 
 refer to Sir WiUiam, in addressing one of the cantos of Marmion 
 to the amiable banker's son-in-law and the poet's friend, Mr Skene 
 of Eubislaw : 
 
 ' Scarce had lamented Forbes paid 
 
 The tribute to his Minstrel's shade, 
 
 The tale of friendship scarce was told. 
 
 Ere the narrator's heart was cold — 
 
 Far may we search before we find 
 
 A heart so manly and so kind ! 
 
 But not around his honoured urn 
 
 Shall &iends alone and kindred mourn ; 
 
 The thousand eyes his care had dried, 
 
 Pour at his name a bitter tide ; 
 
 And frequent falls the grateful dew, 
 
 For benefits the world ne'er knew. 
 
 If mortal charity dare claim 
 
 The Almighty's attributed name. 
 
 Inscribe above his mouldering clay, 
 
 " The widow's shield, the orphan's stay.'' 
 
 Nor, though it wake thy sorrow, deem 
 
 My verse intrudes on this sad theme ; 
 
 For sacred was the pen that wrote, 
 
 " Thy father's friend forget thou not." 
 
 And grateful title may I plead 
 
 For many a kindly word and deed. 
 
 To bring my tribute to his grave : — 
 
 'Tis little— but 'tis all I have.' 
 
 And perhaps even a more expressive testimony is given to the 
 character of Sir "William by James Boswell, when he makes the 
 following statement in his Tour- to the Hebrides: 'Mr Scott came 
 to breakfast, at which I introduced to Dr Johnson and him my 
 friend Sir William Forbes, now of Pitsligo, a man of whom too 
 much good cannot be said ; who, with distinguished abilities and 
 application in his profession of a banker, is at once a good com- 
 
INTRODUCTORY NOTICE. V 
 
 panion and a good Christian, which, I think, is saying enough. 
 Yet it is but justice to record that once, when he was in a danger- 
 ous illness, he was watched with the anxious apprehension of a 
 general calamity j day and night his house was beset with affec- 
 tionate inquiries, and upon his recovery, Te Deum was the universal 
 chorus from the hearts of his countrymen.' 
 
 R C. 
 
Jl 
 
 
 
 'Ci 
 
 Zoj!/j PmrosroffL C/rrrfl'MMmGir. 1742 
 
 lyho/n a /hi /i&vuf' viy (a., /l a //Ida // . 
 
 ^ / 
 
[ADDRESS OF THE AUTHOR TO HIS SON.] 
 
 Edinburgh, 1st January 1803. 
 My DEABEST William, — 
 
 You have often heard me express an intention of writing 
 some account of our house of business in Edinburgh, from its first 
 establishment by the Messrs Ooutts. 
 
 The history of a society in which I have passed the whole of 
 my time, from my boyish days to this present hour, during the 
 long period of almost half a century, cannot but be very interesting 
 to me, especially since by means of my connection with it, I have 
 arrived, through the blessing of Providence, to a degree of opulence 
 and respectabiUty of position, which I had very little reason to look 
 for on my first entrance into the world. I have often thought 
 that such a narrative might not be without its advantage to you, 
 as calculated to teach you the necessity of prudence and caution in 
 business of every kind, but most particularly in that of a banker, 
 in whose possession not only his owu property, but that of 
 hundreds of others, is at stake ; and as shewing you how, by a 
 steady, well-concerted plan, vrith a strict adherence to integrity 
 in all your transactions, aided by civility, yet without meanness, 
 you can scarcely fail, by the blessing of Heaven, to arrive at 
 success. 
 
 From such a history, too, some general knowledge may be 
 gained of the progressive improvement of Scotland. For, although 
 it is no doubt true that, even where things remain in a good 
 measure stationary in a country, the business of a banking-house, 
 the longer it exists, has a natural tendency to increase, when it 
 has been conducted with prudence and ability, yet it is certainly 
 to the rapid progress of the prosperity of this country, that the 
 
Vm ADDRESS OF THE AUTHOR TO HIS SON. 
 
 very great extension of the business of our house during the last 
 twenty years must, in a great measure, be attributed. To illus- 
 trate this part of my proposed subject, I have subjoined to my 
 narrative a short and, I must acknowledge, a very imperfect 
 sketch, collected from the best authorities I could meet with ; to 
 some of which, my situation as a man of business has given me 
 peculiar access. The subject is curious, and to me extremely 
 interesting ; as I have lived in the very period when this improve- 
 ment of our native country has assumed some form, and seems 
 still to be making daily advances to yet greater prosperity — a 
 reflection highly grateful to me as a Scotsman. 
 
 To my own memory this narrative will recall many scenes on 
 which I cannot look back without the most heartfelt gratitude to 
 that Almighty Being, who has been graciously pleased to shower 
 down upon me so large a share of prosperity. Nor can I contem- 
 plate the many years I have spent in business, and the number of 
 friends of whom death has in that interval deprived me, without 
 the most serious reflections on the rapidity with which this life is 
 wearing away, and the propriety of my bending my thoughts 
 towards another — a subject of meditation at all times proper for 
 a rational being ; but peculiarly so for one who has hved so long 
 as I have done in the hurry and tumult of a constant intercourse 
 with the busy world — a state extremely unfavourable to sober 
 thought and reflection. 
 
 I cannot conclude this address to you, my dearest William, in a 
 better manner than by expressing my hope that this narrative will 
 confirm you in a love for that profession which you probably 
 adopted at first on my suggestion. My wish certainly was to 
 insure your succession to the fruits of my labours, as far as I have 
 had any merit in helping to raise the house to its present flourish- 
 ing state. If you continue to pay the same attention to business 
 that I have done (I trust I may speak it in this place without 
 vanity), I have no doubt that, by the blessing of Heaven on your 
 endeavours, you may preserve the house in credit and respect- 
 ability long after I shall have paid my debt to nature. But I 
 never can too often nor too earnestly inculcate that the continu- 
 ance of that credit and prosperity, under Providence, must entirely 
 depend on yourself. If you prove yourself worthy of the notice of 
 your father's friends (of which I must do you the justice to say, I 
 have at this moment the fairest hope), you may expect their most 
 cordial support, as well as a continuance of that favour and pre- 
 ference with which they have so long and so steadily honoured 
 me. But if your own endeavours be wanting — if negligence take 
 
ADDRESS OP THE AUTHOR TO HIS SON. IX 
 
 the place of attention to business, and economy be abandoned for 
 profusion of expense — ^you may be assured that the concerns of the 
 house will go speedily into decay, until at last that decUne shall 
 terminate in absolute ruin. For, in the course of a long experience, 
 I can safely say that I have never known a single instance in 
 which relaxed management and unbounded expense did not end 
 in total bankruptcy. 
 
 That the providence of the Almighty may ever watch over you 
 to shield you from harm, is the earnest and daily prayer of. 
 
 My dearest William, 
 
 Your fond and aflfectionate father, 
 
 William Forbes. 
 
MEMOIRS 
 
 BANKING-HOUSE. 
 
 The founder of the Edinburgh house of business of which I am 
 now to give some account, was Patrick Ccutts, the fourth son of 
 Alexander Coutts, provost of Montrose, whose grandfather is said 
 to have been a son of the family of Auchintowl, and to have 
 settled in Montrose in the end of the sixteenth century.* 
 
 At what period Mr Patrick Coutts removed from Montrose to 
 Edinburgh I have not learned. But it appears by his books of 
 accounts, still in our possession, that he carried on business in 
 
 * The pedigree of Mr Coutts has been thus stated to me by a letter from 
 Mr Charles Thoiason of Montrose, who had it from Mrs Patison, a relative of 
 the family. 
 
 ' The first of the family came to Montrose towards the end of the sixteenth 
 century. He is said to have been a son of Coutts of Aucliintowl, a vassal 
 of the family of Macdonald. This gentleman had a son, William, who 
 was provost of Montrose. William was succeeded by his son, Alexander, 
 who lived to a great age, and left six sons and tliree daughters: of the 
 sons, William, the eldest, was also provost of Montrose, as was lilcewise 
 John, the second son; Hercules, the third, settled in London; Peter, the 
 foui'tli, settled in Edinburgh; Eobert, the fifth, went to America, and died 
 there ; James, the youngest, also went to America, but returned after some time, 
 and purchased the lands of Hallgreen, in the shire of Kincardine, and was also 
 provost of Montrose. This gentleman was the father of the late Mr Coutts of 
 Hallgreen ; and Frovost Coutts of Edinburgh was the son of Peter, the fourth 
 son of Alexander Coutts. I shall only add that I have had opportunity to learn 
 that the family have been long and universally respected in Montrose as people 
 of very great benevolence, honour, and integrity.' Of the truth of this last 
 assertion there can be no better proof than that in three generations four of the 
 family were elected chief magistrate of their native town. 
 
2 MEMOIRS OF A BANKING-HOUSE. 
 
 Edinburgh as a merchant at least as early as the year 1696.* 
 The books are kept in Scots money, and very neatly and distinctly 
 written. He appears to have been a general merchant, whose 
 transactions were considerably extended, for in his books there are 
 accounts of mercantile adventures to New York and Pennsylvania, 
 to Amsterdam, to France, and to the Canaries. He died in the 
 autumn of 1704 ; his will being dated 25th July in that year, and 
 an inventory of his effects registered in the books of the sheriff of 
 Edinburgh on the 27th October thereafter. By the latter he 
 appears to, have left of personal estate somewhat better than 
 £30,000 Scots, or £2500 sterling, a considerable sum for those 
 days. Mr Patrick Coutts was twice married. He left three 
 children — John, James, and Christian — by his first wife, a daughter 
 of the lamily of Dunlop of Garnkirk, in the county of Lanark. 
 This relationship gave rise to the intimate correspondence which 
 always subsisted between the Messrs Coutts and the Messrs 
 Dunlop and their connections in Glasgow. His second wife was 
 Rachel Balfour, as appears from the record of the baptism of a 
 daughter named Janet. After the death of Mr Patrick Coutts, 
 his children of the first marriage were sent to Montrose, where 
 they lived with an uncle from the year 1705 to 1719, when the 
 eldest son, John, returned to Edinburgh. Mr John Coutts — who 
 was bom 28th July 1699 — being a minor when his father died, I 
 presume the business of the latter had been in a great degree dis- 
 continued by himself before his death, and wound up by the tutors 
 
 * [In the record of the Privy Council of Scotland, under date July 3, 1694, 
 occurs a petition from Patrick Coutts, merchant in Montrose, who, acting for 
 himself and partners, had bought a parcel of serges and worsted stuffs at Leeds, 
 and had them shipped on board a Swedish vessel bound for £iga. The vessel 
 was taken by a French privateer, and carried, with all its cargo, into Dunkirk. 
 Coutts and his partners then represented to the Privy Council that it was cus- 
 tomary in such cases to send a person to Dunkirk, who 'might recover the 
 goods for a small price, as being English goods prohibited to be imported into 
 the French dominions ; ' and they craved pei'mission to send ' ane honest and 
 weel-affected person ' for that purpose, due security being given ' that he shall 
 behave weel and honestly, without acting any thing against their majesties' 
 government.' 
 
 Tlie CouncU gave permission to Patrick himself ' to repair to Dunkirk, for 
 recovering the goods mentioned, and from thence to undertake and perfect a 
 voyage with the goods to any port within the kingdom of Scotland or England,' 
 he having first taken the oath of allegiance, and given security to the extent of 
 a thousand pounds sterling, that he should not consult or contrive anything 
 against the government, ' nor carry any message by word or write in his going 
 to or coming from France.' 
 
 These precautions bore reference to the exiled royal family residing at St Gter- 
 mains, and to the constant traffic carried on with it by Jacobite gentlemen of 
 Scotland.] 
 
MEMOIRS OF A BANKING-HOUSE. 3 
 
 he left to his children, for it does not appear that he had any 
 partner by whom it might have been carried on. 
 
 With whom or where Mr John Coutts served an apprenticeship, 
 or in what year he first commenced business as a merchant, I do 
 not know. From some letters still existing, I find him engaged 
 in mercantile concerns in Edinburgh in the year 1723. But most 
 of his earliest books of accounts are lost, and his papers in much 
 confusion. On the 23d of September 1730, he entered the town- 
 council of Edinburgh as first merchant councillor. He married 
 a sister of the late Sir John Stuart of AUanbank, by whom he had 
 four sons — Patrick, John, James, and Thomas. At one period he 
 was connected in partnership with Mr Haliburton of Newmains, 
 in Roxburghshire,* but of the commencement or termination of 
 that connection I can find no trace. In the year 1740, 1 find him 
 in partnership with Mr Robert Ramsay, brother of Sir Alexander 
 Ramsay of Balmain; from whom he separated on the 5th of Decem- 
 ber 1744, as appears by an entry in his journal, declaring that 
 their partnership had terminated that day, and that he was thence- 
 forward to carry on business alone. Afterwards, however, he 
 assumed as a partner Mr Archibald Trotter, who was Mrs Coutts's 
 first cousin,f and had been in the house of Charles and Hugh 
 Smith of Boulogne. Both the first mentioned partnerships were 
 under the firm of John Coutts & Co. ; but this had the title of 
 Coutts and Trotter. Their business was dealing in com, buying 
 and selling goods on commission, and the negotiation of bills of 
 exchange on London, Holland, France, Italy, Spain, and Portugal. 
 The negotiation of bills of exchange formed at that period 
 a considerable part of the business of Edinburgh ; for there 
 were then no country banks, and consequently the bills for the 
 exports and imports of Perth, Dundee, Montrose, Aberdeen, and 
 other trading towns in Scotland, with Holland, France, and other 
 countries, were negotiated at Edinburgh.}: I see many notices of 
 
 * [Thomas Haliburton, of ^ewmains, living about that time, was, through a 
 daughter, great-grandfather to Sir "Walter Scott.] 
 
 f [Mr Archibald Trotter was the second son of Alexander Trotter of Castle- 
 shiel, by Jean, daughter of Sir Robert Stuart of AUanbank.] 
 
 J [In both sections of this island, for a long period after public banks were 
 established, the negotiating of bills of exchange was in the hands of private 
 merchants or bankers. ' The Bank [of Scotland], at its first erection, did deal 
 in exchange, but found it very troublesome, unsafe, and improper. . . . There 
 is no place in the trading world but there are to be found in it many that deal 
 in exchange, even in those cities where a bank is. In London there are a great 
 many, and those who have the management of the Bank of England never, that 
 I have heard of, wished to rival them in their business. On the contrary, I am 
 told that they help and accommodate them by discounting of bills, &c.' — 
 Account of the Bank of Scotland, printed about 1727.] 
 
4 MEMOIES OF A BANKING-HOUSE. 
 
 the difficulty, at that time, of efifecting money transactions of any 
 considerable extent in the country towns of Scotland ; a sure 
 proof of the utility of provincial banks, which, when properly 
 formed and judiciously conducted, are of the utmost benefit to the 
 trade of the kingdom, and have been one great means, among 
 others, of the opulence at which the country has arrived in the 
 course of the last century,* as I have more particularly shewn in 
 another place. 
 
 By the death of his brother, James Coutts, a merchant in Lon- 
 don, he succeeded to about £20,000, which was deemed a large 
 fortune in those days ; and being a man of high character as a 
 merchant, as well as of very popular and agreeable manners, he 
 lived with a degree of hospitality and expense not usual in the 
 family of a merchant at that period. He is reported to have been 
 the first lord provost of Edinburgh who did the honours of 
 the city, by entertaining strangers in his own house ; it having 
 generally been the custom that all such entertainments were 
 given in a tavern at the city's expense. Unfortunately, he was 
 thus led into excesses of the table, and other indulgences, which 
 at length hurt his constitution ; so that, falling into bad health, 
 he left the charge of the business of his house and of his two 
 youngest sons — ^the second being in Holland — to his partner, Mr 
 Trotter, and, taking his eldest son Patrick along vrith him as a 
 companion, he set out for Italy on the 8th August 1749. A few 
 days before his departure, he executed a new contract of copart- 
 nery with Mr Trotter, in which the partners were himself, his 
 eldest son Patrick, and Mr Trotter, under the firm of Coutts, 
 Son, and Trotter. The stock of this company was £4000 sterling. 
 He died at Nola, near Naples, on the 23d March 1750, at the 
 age of fifty-one, beloved and regretted by all his acquaintance, 
 who overlooked the imperfections of his character when they 
 thought of him as the upright citizen and useful magistrate, ever 
 zealous in the service of his friends, and a most agreeable member 
 of society. I give this character of Provost Coutts from what I 
 have been told by those who were of his personal acquaintance, for 
 I had not myself the opportunity of knowing him, as he was dead 
 before I came to Edinburgh. By "the death of Provost Coutts, his 
 sons being all under age, the executive part of the business devolved 
 
 * [In 1803, the three public hanks of Edinhurgh had thirty -nine tranches 
 throughout the country, and it is believed there were very few other provincial 
 banking establishments then in existence. The Edinburgh Almanac for 1858 
 gives a list of three hundred and sixty-six branches from the Edinburgh banks, 
 besides two banks in Glasgow and six in the other towns, having a hundred 
 and ninety-five branches.] 
 
MEMOIRS OF A BANKING-HOUSE. 5 
 
 on Mr Trotter. After a few years, however, the young gentlemen 
 and he not agreeing together, Mr Trotter resigned his share in the 
 company. He, I have understood, differed widely in his character 
 from Provost Coutts, not possessing that liberality of thinking and 
 acting in business for which the latter was so greatly distinguished. 
 The young gentlemen seem to have considered him more in the 
 light of a governor than a partner ; and as neither his person nor 
 manners were at all calculated to command their respect, his yoimg 
 friends were constantly teasing him with little boyish, roguish 
 tricks. One that I remember hearing of, when I entered the 
 office, consisted in their putting a live mouse under the cover of 
 his inkstand, and watching with glee for the start he was to give, 
 when, on his lifting the lid, the animal jumped out, to the no 
 snjall amusement, as might be expected, of the whole counting- 
 house.* 
 
 * After Mr Trotter left the copartnery, he tried to estahlish himself in business 
 as an accountant, for which he was ill qualified, and as an arhitrator in mer- 
 cantile disputes. He afterwards accepted the rather ungracious oifice of agent 
 for certain Edinburgh banks in their warfare with those of Glasgow, to which 
 place he occasionally repaired to make demands for gold. At times he was 
 subject to a species of religious melancholy, which he inherited from his mother, 
 the Lady Castlesliiels of the Allanbank family — by whom he was related to the 
 Messrs Coutts. She had composed a most extraordinary Booh of Meditations, 
 which her son published some little time before his death. He at last retired 
 from all business, and resided at an estate in the neighbourhood of Edinburgh, 
 which he obtained by his wife. 
 
 [The warfare here alluded to by Sir 'William was of a peculiar character. The 
 Eoyal Bank of Scotland, from its commencement, in 1727, had been favoured 
 and supported by the merchants of Glasgow. There was a great deal of angry 
 rivalry between that establishment and its senior, the Bank of Scotland, which 
 had considered itself extremely ill-used by the government of George I., when 
 the Eoyal Bank obtained its charter. The bad blood found expression in pro- 
 ceedings which no Scottish bank would now dream of condescending to, but 
 which were then considered quite legitimate ; at least they were very common. 
 The banks would hoard up a quantity of each other's notes, and endeavour, by 
 presenting them suddenly, to create embarrassment. To counteract the bias of 
 the Glasgow merchants for the Eoyal Bank, the Bank of Scotland took part, in 
 1749, in establishing what was afterwards known as the Old Sankintha western 
 city. As a protective or retaliatory measure, the Eoyal Bank helped next year 
 in setting up the New Banking Company at Glasgow. From the papers connected 
 with the case 'Archibald Trotter v. Andrew Cochrane, John Murdoch & Co.,' 
 it appears that, some years afterwards, the Edinburgh banks became sensible of 
 a common injury from these western establishments, and laid aside their old 
 animosities in order to get them, if possible, put down. They concurred in 
 calling upon the Glasgow merchants to give up the trade of banking, under the 
 pain of having their credits withdrawn. This was refused, and then it was that 
 Mr Trotter, in order to further the objects of the Edinburgh banks and distress 
 the west country bankers, took up his residence in Glasgow. 
 
 ' Mr Trotter certainly made a practice of receiving, or rather of collecting the 
 notes, of Murdoch & Co., and demanding payment of large sums in cash ; and 
 
6 MEMOIKS OF A BANKING-HOUSE. 
 
 On Mr Trotter's leaving them, as they were too young to con- 
 duct a house of business by themselves, their friends formed a new 
 copartnery for them with Mr John Stephen, who had been married 
 to a sister of their father, and was at that time a wine-merchant 
 in Leith, in company with the Honourable Alexander Stuart, 
 afterwards Lord Blantyre, and a Mr "Walter Scott. On this occa- 
 sion the firm of the house was changed to Coutts Brothers & Co. 
 
 A mercantile establishment was likewise formed about this time 
 in London, by the Messrs Coutts, under the firm of Coutts, 
 
 Murdoch & Co. resorted to the practice of telling out payment very deKberately 
 indeed, in sixpences. In a protest which he took upon 23d January 1759, he 
 gives a detail of the payments which were thus obtained by him from 14th 
 December to 22d January (thirty-four business days), amounting altogether only 
 to the sum of £2893. One of the forenoon payments in sixpences amounted 
 only to £7; and the highest, either of a forenoon or afternoon (for business was 
 then done after dinner), is £20. The largest payment made, which was in 
 Edinburgh notes, was one of £100. 
 
 'Mr Trotter, in his action before the Court of Session, sought decree for 
 £3447, to which extent he held notes of Murdoch & Co., with interest on the 
 amount of notes held by him at the date of his protest, with £600 damages. He 
 also sought to have it declared that Miirdoch & Co. had no right to regulate 
 their own hours of douig business, and that they should be bound to pay their 
 notes when presented at any time from seven morning to ten at night. 
 
 ' The defences stated were, that Mr Trotter had acted in mala fide, and with 
 the design of distressing the defendants ; that his conduct might be strictly legal ; 
 but so was that of the defendants strictly legal in paying in sixpences, a practice 
 which, on occasions, had been resorted to by the Edinburgh banks themselves ; 
 that pajrment had nevertheless been offered, but refused, unless damages were 
 also paid ; and that the declarator as to hours was not competent at the instance 
 of a private party. A great many dilatory proceedings took place before the 
 Lord Ordinary ("Woodhall), who ultimately ordered informations. In June 
 1760, a petition and complaint was presented by Mr Trotter, complaining of his 
 adversaries for trifling with justice. The information for the defendants having 
 been lodged, the Court, on advising, remitted to the Lord Ordinary to adjust the 
 facts — and especially the fact of Mr Trotter's being a mere hand for the banks, 
 and his Intention to distress, which several of the judges thought obvious. 
 Lord Karnes observed, that Mr Trotter should not have taken the notes. Lord 
 AfBeck thought the case of Mr Trotter's like that of a man's buying up another's 
 debts m malitia. The Lord President and Lord Coalston dreaded paper credit, 
 and thought banks dangerous, A great variety of proceedings again took place 
 before the Lord Ordinary, who again ordered pleadings to the whole Court, in 
 December 1761, the libel was held relevant to infer the conclusions for payment 
 of principal, interest, and expenses, but not as to declaratory conclusions. 
 Kames, Nisbet, and Affleck were against the interlocutor. Coalston and 
 Edgefield declined as directors of the bank. There was then a petition for Mr 
 Trotter, with answers and replies. Then two petitions for Murdoch & Co., with 
 answers, &c. ; and in April 1763, the case was taken out of Court by the defend- 
 ants paying £600 — to which, we have no doubt, the pursuer's expenses had by 
 that time amounted, and by which time also, we have no doubt, Murdoch & Co. 
 had accomplished their object in defending the action.' — Scotsman newspaper, 
 Apri! 5, 1826.] 
 
UEMOIES OF A BANKINa-HOTJSE. 7 
 
 Stephen, Coutts, & Co., in which Mr Thomas Stephen, their 
 cousin-german, the son of the partner at Edinburgh, was con- 
 cerned. That company acted as the correspondents of the house 
 at Edinburgh, and transacted any other business with which they 
 were intrusted, either in money or in tlie buying and seUing of 
 goods on commission. 
 
 Mr Patrick and Mr Thomas Coutts resided with Mr Thomas 
 Stephen, in the house occupied by the London firm, in Jeffrey's 
 Square, St Mary Axe, and conducted the business there, while the 
 other two brothers, John (who not long after his father's death 
 withdrew from his mercantile concern in Rotterdam* and returned 
 to Scotland) and James, resided at Edinburgh, conducting the 
 business of the house there, in conjunction with the elder Mr 
 Stephen. They lived in the same house which their father had 
 inhabited, being the second floor of the President's Stairs in the 
 Parliament Close ; and they continued in the same line of business 
 of banking and exchange which their father had carried on. Like 
 him, too, they dealt very largely in corn; and it is not without 
 some degree of wonder that I look back on the extent of their 
 correspondence and operations in that article. They had a settled 
 agent in Northumberland, William Watson, residing at Fenwick, 
 who was employed to make purchases of com for the house (and 
 for none else) in that county. Messrs Fairholme, Mr Chalmers, 
 and other corn-dealers in Edinburgh, had established agents in the 
 same fertile district — employing Fenwick, moreover, to make pur- 
 chases for them in Berwickshire. George Garioch at Aberdeen, 
 James Robertson at Portsoy, and Andrew Laird at Dundee, made 
 purchases (in which these gentlemen were themselves concerned) 
 for the house in the fertile com counties of Perth, Forfar, Kincar- 
 diiJfe, Aberdeen, Banfi^, and Moray ; and James Budge of Toftingall 
 in Caithness, and William Baillie of Rosehall in Ross-shire, both of 
 them gentlemen of landed property, but also men of business, though 
 not strictly speaking merchants, made purchases for the house on 
 their joint account in those northern counties. In England the 
 house had large quantities of com shipped for them at Yame and 
 at Stockton, in Yorkshire ; at L3mn Regis, Fakenham, and 
 Yarmouth, all in the rich com county of Norfolk ; at Haverford- 
 west, in South Wales ; and by the noted Cooper Thornhill, who 
 
 * The firm of the Eotterdam house was Eobertson, Coutts, and Straohan. 
 Their chief trade was the shipping of tea, spirits, and other articles of contra- 
 band goods, for the smugglers on the east and north coasts of Scotland. His 
 friends at Edinburgh, disliking this trade, procured a separation between hira 
 and his partners in Holland, very fortunately for Mr Coutts, as that house 
 became bankrupt a very few years afterwards. 
 
8 MEMOIES OF A BANKING-HOUSK 
 
 at that time kept the Bell Inn at Hilton, and was one of the most 
 considerable corn-factors in England.* 
 
 They had also large dealings in corn with Edmund and George 
 Schoales of Drogheda, and with Daniel Mussenden of Belfast ;t 
 and I have known them import cargoes of wheat from Dantzic 
 and Kbnigsberg. When I reflect on the extent of all this cor- 
 respondence, and the combination of such a variety of intelligence 
 respecting the prices of com at all those different places, compared 
 with the prices in the different parts of Scotland, I cannot but 
 wonder at the boldness of enterprise which led them to embark in 
 such a perilous traffic. Some years they made large profits, which 
 they as often lost in others, ovying to the fluctuation of markets 
 and the bankruptcy of many of those with whom they dealt. 
 Indeed, I have often thought it not a little singular that a banking- 
 house, which, of all branches of business, seems peculiarly to 
 require caution, and which ought, as much as possible, to be kept 
 clear of every undertaking of hazard or speculation, should have 
 chosen to embark so largely in the corn-trade, which is perhaps 
 that most liable to sudden fluctuation, and in which no human 
 prudence or insurance can guard the adventurers from frequent 
 loss. Yet in this the Messrs Coutts were not singular. Messrs 
 Fairholme, whose banking-house had been long eminent, and in 
 the enjoyment of unsullied credit, were also large dealers in corn. 
 George Chalmers, whose principal employment was that of a corn- 
 dealer, also did business as a banker and exchange-dealer. 
 
 * It was he who performed the extraordinary ride from Hilton to London, 
 back to Hilton, and thence to London again, heing 225 miles, in 12 hours 17 
 minutes. He set put at four o'clock in the morning of 29th April 1745, and 
 came to the Queen's Arms, opposite Shoreditch Church, in 3 hours and 52 
 minutes ; returned again to Hilton in 4 hours and 12 minutes ; and came hack 
 to London in 4 hours and 13 minutes. He was allowed 15 hours for the task 
 and as many horses as he pleased, which he had ready waiting him at various 
 places on the road. He was so little fatigued hy this exploit, that he rode next 
 day as if nothing had happened. The road was lined with spectators to see him 
 pass and repass, and many thousands, besides his own wager of five hundred 
 guineas, were depending on the performance. Mr Thomhill, though he kept 
 an inn, was much respected for his gentleman-like Inanners, and generally 
 brought to table by his guests. There is a mezzotinto print of this exploit still 
 preserved at the Bell Inn at Hilton. 
 
 f I recollect a singular circumstance respecting Daniel Mussenden, who was 
 one of the most eminent corn-dealers in the north of Ireland. His business 
 had been long conducted, under his inspection, by a confidential clerk, who 
 wrote aU his letters, excepting only the signature. At length his faculties 
 became so impaired, that this clerk not only managed the business and wrote 
 the letters, but imitated his master's subscription at the bottom of the letters, 
 and in aU his hills, so exactly, that no difierence could be detected, although, 
 as I well recollect, Mr Mussenden's subscription was a very peculiar one. 
 
MEMOIRS OP A BANKING-HOUSE. 9 
 
 Fordyce, Malcolm, & Co., Arbuthnot and Guthrie, Gibson and 
 Hogg, and some others, were all established afterwards on the same 
 footing. 
 
 The other principal banking-houses in Edinburgh at that time 
 were Messrs Mansfield & Co., "William Cuming, William Hogg 
 and Son, and "William Alexander and Sons. The two first con- 
 fined themselves strictly to the banking business, in which they 
 rose to great eminence from a very obscure origin. From a slender 
 outsetting as a draper, old Mr James Mansfield began to deal a 
 little in bills of exchange, and by degrees founded a banking-house 
 of the first celebrity in Scotland.* In the same manner "William 
 Cuming succeeded to his father, old Patrick Cuming's cloth shop 
 in the Parhament Close, which he afterwards converted into a 
 counting-house, where he confined himself entirely to the transact- 
 ing of money business, and after a long life, left a very large 
 fortune. "William Hogg and Son were not in very extensive busi- 
 ness, and they managed it very confusedly. "William Alexander 
 and Sons were very considerable money-dealers, though their 
 chief employment was the purchasing tobacco for the farmers- 
 general of France. A few years afterwards, a number of other 
 inconsiderable houses started up, who transacted money business 
 — such as Samuel Foggo, Johnstone and Smith, Scott Moncreifie 
 and Ferguson, John Fyflfe, and "W. Sinclair & Co. — most of whom, 
 along with several of those formerly mentioned, became bankrupt 
 in the famous year 1772.f Thomas Kinnear was originally an 
 insurance-broker, but laid the foundation of a banking-house of 
 eminence, afterwards carried on by his sons. Seton and Houstoun 
 sprang out of a society who dealt in the manufacturing of woollen 
 goods. 
 
 It was somewhat uncommon to see a whole family, consisting of 
 four sons, all carrying on the succession of their father's house in a 
 joint partnership of business with success. Those brothers, how- 
 ever, were not all of the same temper and disposition. Patrick, 
 the eldest son of Provost Coutts, was a man of elegant and agree- 
 able manners, but more inclined to the study of books than to 
 
 • [Mansfield, Ramsay, & Co., continued to be an eminent banking firm in 
 Edinburgh till 1807, after which the house appears under the appellative of 
 Eamsays, Bonars, & Co.] 
 
 ■ + John Fyffe, from a principle of high honour, suspended his payments in 
 1772, because he was fearful of the effect of those numerous bankruptcies which 
 he saw daily happening around him. But, on a more narrow inspection of his 
 affairs, he found no reason for apprehension, and very soon went on again. He 
 was a worthy honest man, of great respectability, and lived long retired from 
 business. He died after 1790, leaving an ample fortune to his family. 
 
10 MEMOIRS OF A BANKING-HOUSE. 
 
 application to business. He continued, however, to take a part 
 in the management of the London establishment for some few 
 years, in the course of which Mr Thomas Stephen died, and the 
 actire charge of the counting-house chiefly rested with the youngest 
 brother Thomas. Patrick Coutts then spent some time in travel- 
 ling on the continent, where a very unpleasant accident befell him. 
 Being at Lisle, as he was walking in a careless manner on the 
 ramparts, he was observed to be employed in taking notes in short- 
 hand in his pocket-book, and was immediately arrested as a spy. 
 It was in vain that he urged his having merely been engaged in 
 making a few memoranda for his own amusement, without any 
 criminal intention. He was thrown into prison, where he remained 
 for several months, and it cost his friends considerable trouble to 
 procure his release. He afterwards came home, and paid a visit 
 to Scotland, when I had the opportunity of becoming in a slight 
 degree acquainted with him, and he is a party to the first contract 
 I entered into with him and his brothers and Mr Stephen, by 
 which I became entitled to a small interest in the house of Coutts 
 Brothers & Co. Afterwards returning to London, he was attacked 
 by a direful malady, which he inherited from his mother's family. 
 He is still (1803) alive, above seventy years of age. 
 
 John Coutts, the second son, under whose eye chiefly I served 
 my apprenticeship, was one of the most agreeable men I ever 
 knew. Lively and well-bred, and of very engaging manners, he 
 had the happy talent of uniting a love of society and public amuse- 
 ments with a strict attention to business. While resembhng his 
 father in his general manners more than did any of his brothers, he 
 was more correct in his conduct ; nor do I recollect to have ever 
 seen him but once in the counting-house disguised with liquor and 
 incapable of transacting business.* Having received his mercantile 
 education in Holland, he had all the accuracy and all the strictness 
 of a Dutchman ; and to his lessons it is that I owe any knowledge 
 I possess of the principles of business, as well as an attachment to 
 form, which I shall probably carry -with me to the grave. Although 
 he was of the most gentle manners in common life, he was easily 
 heated with passion when he thought himself ill-used, and I have 
 seen his eyes, which were black and piercing, flash as with light- 
 ning, if any attempt was made to overreach him in a bargain. 
 But his passion was of short continuance, and easily appeased. 
 
 * [We must accept tliis fact, and the evident simplicity and good feeling 
 under -which the author mentions it, as illustrations of the manners of past 
 times. It clearly appears that in Sir "William's time, while invariable sobriety 
 might be esteemed, an occasional occurrence of the reverse was not deemed 
 fatal to a man of business.] 
 
MEMOIRS OF A BANKING-HOUSE. 11 
 
 He was seized, in London, with tte severe disorder called iliac 
 passion, and, going to Bath for the recovery of his health, he died 
 there on the 4th of August 1761 — I helieve, in the thirtieth year 
 of his age. I shall ever retain the most grateful respect for his 
 memory, on account of the very great attention he bestowed on me 
 during the five years of my apprenticeship. 
 
 Mr James Coutts gave as close application to business as his 
 immediate elder brother ; but he was by no means of so amiable 
 a character ; and, never having been out of Edinburgh, he had not 
 those polished manners which his two elder brothers had acquired 
 by living abroad and mixing in the world. He was nearly as 
 passionate as Mr John Coutts ; but he differed from him in retain- 
 ing a longer resentment. As he went to London, and by his 
 marriage became established there in business after I came into 
 the counting-house, I was but a few months under his care ; so 
 that it was not till I grew up to be a man that I enjoyed much of 
 his acquaintance. The unhappy difference which took place be- 
 tween him and my partners on the subject of Mr William Coch- 
 rane, in which I was unfortunately involved, occasioned a coolness 
 between him and them. But I must do Mr James Coutts the 
 justice to say, that, even after that period, he always behaved to 
 me with kindness and attention. At last an unhappy difference 
 arose between him and his youngest brother Thomas, whom he 
 had assumed as a partner, which ended in their final separation. 
 In consequence of that event, Mr James Coutts went abroad with 
 his daughter, an only child, accompanied by a female relative as 
 her companion. At Turin he was seized with the same malady 
 as his eldest brother, of which he had previously shewn symp- 
 toms, but which attacked him in a different manner. It was 
 thought expedient that he should go home by sea, and the 
 vessel having touched at Gibraltar, he died there, early in the 
 year 1778. 
 
 Of Mr Thomas Coutts, the youngest son of Provost Coutts, as 
 he is still (1803) alive and in business, it is not proper to say much. 
 I may just remark that, by a careful attention to the business of 
 a banker, he has raised the reputation and business of his house 
 to a high degree of eminfence, and has acquired a very great 
 fortune.* 
 
 Mr [Francis] Farquharson [of Haughton] had been my father's 
 most intimate friend and companion from a very early period, and 
 
 * [The well-known Thomas Coutts, after attaining to be the head of his distin- 
 guished profession in London, and acquiring enormous wealth, died in February 
 1822, about the age of ninety.] 
 
12 MEMOIES OF A BANKING-HOUSE. 
 
 althougi not in the nomination of my guardians, his high regard 
 for my father had attached him strongly to my mother and her 
 infant children, to whom he proved himself a steady and most 
 useful friend to his dying hour. The slender provision which my 
 father had left me — although he had by great attention to business 
 and frugality been enabled in the course of his short life to double 
 the pittance which originally fell to him out of the wreck of our 
 family estate, when sold by his grandfather — having rendered it 
 absolutely necessary that I should attach myself to some profession 
 for my future support, Mr Farquharson suggested to my mother 
 the propriety of breeding me to commercial business, in preference 
 to any of the learned professions, as a surer road to independence. 
 In prosecution of this plan, after my education in the usual 
 branches of school learning was completed, he prevailed on his 
 young friends, the Messrs Coutts, to receive me as an apprentice 
 into their coimting-house, the circumstance to which, by the 
 blessing of Heaven, I owe that respectable situation in life to 
 which I have attained. 
 
 At this period, as I have already said, Messrs Coutts tarried on 
 business both at Edinburgh and London — at Edinburgh, under 
 the firm of Coutts Brothers & Co., conducted by John and James 
 Coutts and Mr Stephen ; at London, under the firm of Coutts, 
 Stephen, Coutts, & Co., conducted by Patrick and Thomas Coutts. 
 The business at Edinburgh* comprised extensive transactions 
 in com on their own account. They also did business on com- 
 mission, in the sale of wines and other consignments, and in 
 shipping lead, salmon, and other articles ; and, lastly, they acted 
 as exchange dealers and bankers by receiving deposits of money, 
 for which they allowed interest. The house in London was the 
 correspondent of the house in Edinburgh, which conducted through 
 them all their exchange operations, and they also transacted 
 business both in buying and selling goods on commission. 
 
 In the month pf August 1754, Mr James Coutts, who had 
 never been out of Scotland, went to London on a visit to his 
 brothers. There he very soon afterwards married Miss Polly 
 Peagrim, the niece of George Campbell, an eminent banker in the 
 
 * The whole office staff, besides the partners, then comprised only four clerks 
 and two apprentices including myself. I cannot omit mentioning, that, the 
 year after myself, we were joined by Mr Lewis Hay, and the year following by 
 Mr Hunter, afterwards Sir James Hunter Blair, who both became partners and 
 my most intimate friends. In the same manner Mr Bartlet came into tho 
 house as a clerk in 177-, and my brother-in-law, Mr John Hay, in 1778, and you, 
 my dear William, became an apprentice in 1788, and have since all been partners 
 in the house. 
 
MEMOIES OP A BANKING-HOUSE. 13 
 
 Strand,* by whom he was immediately received into partnership, 
 under the firm of Campbell and Coutts, and he in consequence 
 withdrew from the partnerships with his brothers in London and 
 Edinburgh. 
 
 Some short time afterwards, Mr William Dalrymple, merchant 
 in Cadiz — brother of Sir Hew Dalrymple of North Berwick — was 
 assumed as an acting partner in the house at London, the firm of 
 which was then changed to Coutts Brothers and Dalrymple. In a 
 very short time, however, Messrs Coutts disliking Mr Dalrymple's 
 too great love of speculation, the partnership between them was 
 dissolved by mutual consent,t and the firm was again changed to 
 Coutts Brothers & Co., being the same with that of the Edinburgh 
 house. 
 
 About the year 1760, Mr George Campbell, the banker, dying, 
 Mr James Coutts assumed his youngest brother, Thomas, as a 
 partner in that banking-house, the firm of which then became 
 James and Thomas Coutts. In consequence, Thomas also with- 
 drew from the two houses of Edinburgh and London, the last of 
 which was thereafter managed by Mr Patrick Coutts, with the 
 assistance of Mr Thomas Walker, their principal and confidential 
 clerk, who had been originally bred in the counting-house at 
 Edinburgh. Some difference having arisen between Mr Walker 
 and them, he quitted their service ; and a procuration was then 
 given to Mr George Keith, who had been bred with Mr A. 
 Gregory of Dunkirk, and had been recommended to Messrs Coutts 
 as a clerk in their London establishment. Mr John Coutts and 
 Mr Stephen continued to conduct the business of the house at 
 Edinburgh. 
 
 While those changes were so rapidly succeeding each other, my 
 apprenticeship of five years was completed on the 14th May 1759. 
 Mr Francis Farquharson, my_ much esteemed friend, having 
 
 '' At that period there were only two banking-houses on the west side 
 of Temple Bar. One was the well-known estahlishment of Mr Andrew 
 Drmnmond, a son of Lord Strathallan,! who, after having heen engaged in the 
 affair of 1715 on the side of the Stuart family, established himself as a baiiker 
 in London, where he was patronised by many of the Tory families of the 
 English aristocracy. George Campbell, the proprietor of the other establish- 
 ment, was originally a goldsmith in London — as most of the bankers had been 
 originally — and was patronised by the Duke of Argyle and the Whig interest. 
 
 ■I* Mr Daliymple, after his separation from Messrs Coutts, commenced 
 business in London by himself, chiefly as an underwriter, but failed in a, 
 few months. 
 
 1 [Mr Andrew Drummond, the banker, was only the son of Sir John Drummond 
 of Machany ; but his elder brother, William, succeeded as fourth Viscount Strathallan, 
 and was killed fighting on the Prince's side at Culloden,] 
 
14 MEMOIES OF A BANKING-HOUSE. 
 
 it greatly at heart to procure for me an interest in the house 
 at Edinburgh, advised me to continue to serve the company in the 
 capacity of a clerk after my apprenticeship was finished, which I 
 did for very nearly two years, without receiving any emolument, 
 in the expectation of being at some convenient opportunity, through 
 his means, admitted a partner.* On the 6th of August 1760, I 
 was intrusted with a power of attorney, by which I was enabled 
 to take an active peirt in the conducting of the business of the 
 house ; and Mr Jolin Coutts with much kindness took every 
 opportunity of bringing me into notice, by inviting me to dinner 
 occasionally when he had parties of friends at his house. I take 
 pleasure in mentioning this circumstance, though trivial in 
 itself, as a grateful testimony of his goodness to me on every 
 occasion. At length, a new contract for ten years having been 
 executed by Mr Patrick Coutts, Mr John Coutts, and Mr 
 Stephen, commencing 1st January 1761, an agreement was 
 entered into between them and me on the 13th March 1761, by 
 which I was to be concerned to the extent of one-eighth share of 
 the house at Edinburgh. But so jealous were they of the effects 
 of this concession in my favour, that the agreement was only to 
 last for three years, with a power to any of them to put an end to 
 it at the end of one year, if they should judge it expedient, and 
 without permitting me to appear to the world in the character of 
 a partner ; so that I still continued to act by virtue of the power 
 of attorney. These prudential restrictions on the part of Messrs 
 Coutts might perhaps be deemed a little hard, as they had had a 
 seven years' experience of my close application to business and zeal 
 for their interest ; yet they were cheerfully submitted to by me, 
 with the hope of one day becoming an ostensible partner. 
 
 A few months after the execution of this agreement, Mr 
 Patrick Coutts was laid aside from business by bad health, which 
 ended in a deprivation of reason ; and in the course of that 
 summer, Mr John Coutts was seized at London with a painful 
 disease, which brought him to the gates of death, and so broke 
 his constitution, that, being ordered by his physicians to drink the 
 waters of Bath, he died there in August 1761, deeply lamented by 
 all who knew him, but by none more than by myself, who lost in 
 him an able guide and a steady friend. By this unlooked-for 
 stroke, the two houses of London and Edinburgh were left in a 
 
 * So strict was Mr John Coutts in tlie discipline of the counting-house, that 
 I slept tut one night out of Edinburgh from the commencement of my 
 apprenticesliip in May 1754 tiU the month of September 1760, when I obtained 
 leave to go to Aberdeenshire with my mother, to pay a visit to our relations. 
 
MEMOIRS OF A BANKING-HOUSE. 15 
 
 most destitute situation. The business of the house at London 
 was of itself noway considerable • but it became of importance to 
 the general interest by their being the correspondents of the house 
 at Edinburgh, who drew their bills on them, and transacted through 
 them their exchange business. The London house had not a person 
 in it who was entitled to sign the firm, and although the business 
 was very well attended to by Mr Keith, who held the company's 
 power of attorney, it was impossible that he could have the weight 
 of a partner, and it is wonderful that things went on so well as they 
 did. At Edinburgh, matters were, if possible, still worse ; as there 
 was no ostensible partner but Mr Stephen, whose slender abilities 
 were altogether inadequate to the task of conducting the houses, and 
 for which my youth and inexperience rendered me extremely ill 
 qualified. It was therefore a singular instance of the goodness of 
 Providence to us, that, under such feeble management, the houses 
 still supported their credit and reputation. Indeed, I must chiefly 
 attribute it, under Heaven, to the popularity of Provost Coutts and 
 his family in Edinburgh, and the established reputation of their 
 firm, by which the friends and correspondents of the house were 
 induced to continue their business there as formerly. Yet even 
 that advantage would not have been sufiicient, had I not been 
 strongly supported and assisted by my intimate friend and com- 
 panion, Mr Hunter, whom I have mentioned as my fellow- 
 apprentice in the house. Although he was nearly two years younger 
 than me, yet such were his superior abilities, that, through him 
 alone, I may say, it was owing that Mr Stephen and I did not 
 sink under the load of conducting a banking-house such as ours, 
 inconsiderable as the business then was compared with what it has 
 since become. Even then, however, the house was one of the first 
 reputation in Edinburgh, for, of course, everything must be 
 estimated by comparison. The first resolution which Mr Hunter 
 and I formed, on finding ourselves practically the sole conductors 
 of the house, was to wind up the corn-speculations then existing, 
 and to relinquish that trade entirely, so as in future to confine the 
 house to its proper and natural business of exchange and banking, 
 by which prudent resolution, and by unremitting assiduity and 
 attention, we were enabled to go on without any apparent 
 diminution of business. 
 
 But to return from this digression, as Messrs James and 
 Thomas Coutts, the only two brothers remaining capable of doing 
 business, were bankers in London, and their eldest brother having 
 fortune sufficient for his requirements in his retired mode of life, 
 they would probably have given themselves little trouble about 
 
1 6 MEMOIES OF A BANKING-HOUSE. 
 
 the future continuance of the houses, had they not been desirous 
 of preserving them for the sake of their uncle-in-law, Mr Stephen, 
 as well as for rendering them subservient as a provision for 
 another uncle-in-law, Mr William Cochrane, married to their 
 mother's sister,* who was still alive, and to whom they were much 
 attached^ They were besides, indeed, not without a personal 
 pecuniary interest in the question, what was to become of the 
 houses. For, as Messrs James and Thomas Coutts were the 
 representatives of their two elder brothers, Patrick and John, 
 they were, in fact, responsible for the current engagements of the 
 houses, and they also had at stake a large sum of outstanding 
 debts, which could noway be so effectually recovered as by con- 
 tinuing the houses under a new set of partners. Among these 
 outstanding debts was one of considerable amount owing by Mr 
 Stephen himself, who, never having had any capital stock of his 
 own, and having been occasionally forced to draw money from the 
 house for the payment of debts he had contracted in his mercantile 
 concerns before he was connected with it, was now its debtor 
 for a considerable balance. Mr Cochrane had been originally a 
 woollen-draper in the Luckenhooths, Edinburgh, in partnership 
 with Mr Walter Hamilton, but had been some time retired from 
 business, living on a small estate in the neighbourhood of 
 North Berwick. He was a man of honourable character and 
 agreeable manners, but altogether unacquainted with any 
 species of business beyond that of the retail shop in which 
 he had acted. Mr Stephen, as I have said, was a man of 
 the most slender abilities ; and Mr Hunter and I were both 
 of us too yoimg and too little known in the world to be solely 
 trusted to for conducting the house at Edinburgh, while that of 
 London stood still more in need of an able head. It naturally 
 occurred, therefore, to Messrs Coutts, that, if they meant at all to 
 preserve the two houses from sinking into insignificance, and 
 render them of any value as a provision for Mr Stephen and Mr 
 Cochrane, it was absolutely necessary that some new arrangement 
 should be formed, and some persons of established reputation and 
 abilities be found who might be associated with the others, and 
 might conduct the business on a plan that should promise success. 
 Some occasional correspondence with this view had taken place 
 with Messrs Coutts, but without anything decisive being resolved 
 on. Finding httle progress made, therefore, towards such a 
 consummation, and having as a separate inducement a violent 
 desire to visit London, I obtained Messrs Coutts's permission to 
 • [LUlias, daughter of Sir John Stuart of Allanbank, Bart.] 
 
MEMOIRS OP A BANKING-HOUSE. 17 
 
 repair thither in the end of October 1762, it having been pre- 
 viously agreed between Mr Hunter and me, that I should use 
 the influence I had with Messrs Coutts to procure for him, if 
 possible, an interest in any new arrangement that might be 
 thought of — a measure on which I was of myself most anxiously 
 bent, not only from my partiality to Mr Hunter, with whom I 
 had lived six years in the strictest and most endearing intimacy, 
 but from my consciousness of his superior abihties, and how very 
 necessary it was that he should have an active and efficient share 
 in the management, which, however, I could not look for on any 
 other footing than as a partner ; because, having inherited from 
 his father a patrimony of £5000, he would naturally look out for 
 some other establishment if he should see no prospect of being 
 received into ours. 
 
 On my arrival in London, Messrs Coutts received me with 
 much cordiality, and I remained there nearly two months, during 
 which time I repeatedly urged the necessity of making some 
 speedy arrangement. At length they informed me that, after 
 mature deliberation, the person they had fixed on to be assumed 
 as an active partner was Mr Robert Herries, merchant in 
 Barcelona, at that time in London. Mr Herries was the eldest 
 son of John Herries of Halldykes, a gentleman of a small landed 
 property in Dumfriesshire, whose afiairs becoming embarrassed, 
 his son went at an early age to Rotterdam, where two brothers of 
 his father, Robert and Charles Herries, were estabhshed as 
 merchants, and with whom he served an apprenticeship. His 
 eldest uncle, Robert, of whom I shall have afterwards much 
 occasion to speak, having acquired what was considered in 
 those days a competent fortune, withdrew from business, and 
 returned to his own country, where he purchased from his eldest 
 brother the family estate of Halldykes. Charles, the other brother, 
 having fallen into habits of dissipation, his nephew Robert, not- 
 withstanding the tempting offers made to him by his uncle, 
 resolved to leave him ; and having by his prudence and good con- 
 duct acquired many useful friends, particularly Messrs Hope & Co. 
 of Amsterdam, he had been encouraged by them, and under 
 their protection, though then not above three-and-twenty years of 
 age, to establish himself as a merchant at Barcelona. One of the 
 chief branches of the trade there consisted in shipping brandies 
 made from the wines of the country j and as that trade was 
 carried on to a very considerable extent in the Isle of Man, then 
 the property of the Duke of Atholl, and where Mr Herries had 
 the opportunity of forming many connections, Barcelona was for , 
 
18 MEMOIRS OF A BANKING-HOUSE. 
 
 him a most eligible situation. He accordingly established himself 
 there in the year 1754, and by his skilful management, under 
 such powerful patronage, his house quickly rose to distinguished 
 eminence. Having assumed into partnership a Prussian gentle- 
 man of the name of Tillebien, whom he had carried with him from 
 Kotterdam as a clerk, and having brought his two younger 
 brothers, Charles and William, to Barcelona, where he had 
 educated them in business, he had come to Britain to pay a visit 
 to his friends, and increase the number of his employers. His 
 reputation as a man of abilities and credit not only stood high in 
 the mercantile world, but his private character was distinguished 
 as a son and a brother, who was in fact the support of his family ; so 
 that he seemed well qualified to preside over the two houses of 
 London and Edinburgh. If anything was to be objected to him, 
 it was his having too great a love for a variety of partnerships, as, 
 in fact, besides his house at Barcelona, he had joined in establish- 
 ing another at Montpellier, under the firm of Herries, Boy, and 
 Burnet ; and he had also a concern in the house of Honorius 
 Dallio & Co. of Valencia. From all these, however, he declared 
 himself resolved to withdraw, except from that of Barcelona, and 
 he stipulated for a permission occasionally to visit Spain. 
 
 Mr Herries having lived at Rotterdam at the same period with 
 Mr John Coutts, they had been intimate friends and companions ; 
 and it was while on a visit to Mr Coutts at Edinburgh, in the 
 year 1761, that I had first the pleasure of making his acquaint^ 
 ance, which I renewed on my going to London at this time, when 
 I had frequent opportunities of being in his company at the 
 house of Messrs Coutts. His character and manners being there- 
 fore well known to me, I most readily assented for myself and Mr 
 Hunter (who was now to have a share in the business) to assume 
 Mr Herries a partner into the two houses, as Messrs Coutts did for 
 Mr Stephen; and in consequence, articles of copartnery were drawn 
 up in London, and signed by Mr Herries, Mr Cochrane (who was 
 at that ,time in London on a visit to Messrs Coutts), and me, in 
 Mr James Coutts's house in the Strand, on the evening of 
 Christmas Day 1762. By those articles, the firm at Edinburgh 
 was to be John Coutts & Co., out of respect to the memory of 
 Provost Coutts ; and the firm at London was to be Herries, 
 Cochrane, & Co., Mr Herries and Mr Cochrane being the resident 
 partners. Messrs Coutts were to give a loan of £7000, for seven 
 years, of their eldest brother's money, in consideration of an 
 allowance of 10 per cent., to be paid to him by the partners ; and 
 the contracts were to endure for twelve years, with a break at the 
 
MEMOIRS OF A BANKING-HOUSE. 19 
 
 end of every third year. The only unusual clause was a power 
 which Messrs Coutts reserved to themselves, in the event of a 
 vacancy happening, to hring in a new partner, in which event, 
 however, any of the partners, if he disliked the new associate, was 
 to be at liberty to withdraw from the society. To this privilege 
 reserved to themselves by Messrs Coutts, Mr Herries strongly 
 objected at the time, assigning as a reason that, as he would not 
 allow any man to choose a wife for- him, he had an equal dislike 
 to a partner being chosen for him by anybody but himself. 
 The article, however, was unfortunately suffered to stand a part 
 of the agreement ; and it was afterwards the cause of much 
 dispute and altercation between Messrs Coutts and us. On 
 the morning after signing the contract in London, Mr James 
 Coutts, Mr Herries, and I set out for Scotland, in order to 
 complete the contracts, and make the necessary preparations for 
 the commencement of the new copartneries ; and the new firms 
 began to be used on the 1st February 1763. The counting-house 
 at Edinburgh was continued in Provost Coutts's house in the 
 President's Stairs, Parliament Close, in which Mr Stephen's 
 family had resided since the death of Mr John Coutts. In 
 London, the counting-house was also continued in the house 
 where it had been first established, in Jefirey's Square, St Mary 
 Axe, in which Mr Patrick and Mr Thomas Coutts had resided, 
 and which was now occupied by Mr and Mrs Cochrane. 
 
 The declared patronage of Messrs Coutts, who were bankers of 
 eminence in London, the circumstance of James being member of 
 parliament for the city of Edinburgh, the popularity of the name 
 of John Coutts, and the established reputation of Mr Herries, all 
 combined to give an additional degree of credit and respectability 
 to the two houses, which it was the study of Mr Hunter and 
 myself to increase by our unremitting attention to the executive 
 part of the business. It was resolved by all concerned that the 
 house at Edinburgh should totally abstain from dealing in com or 
 any other species of merchandise ; confining themselves solely to 
 their regular business of receiving money on deposit, granting 
 cash-accounts, discounting biUs, and dealing in exchanges on 
 London, Holland, and France — a resolution to the adherence 
 to which the great prosperity of the house may, under Heaven, be 
 mainly attributed. It was also resolved that the house in London 
 should chiefly confine itself to the sale and purchase of goods on 
 commission and the business of exchanges. 
 
 On this footing, our new copartnery commenced, and the success 
 was fally equal to our most sanguine expectations. The Seven 
 
20 MEMOIES OP A BANKING-HOUSE. 
 
 Years' War had just been terminated : it was to be reasonably 
 expected that that event would prove favourable for the commerce 
 and prosperity of the kingdom. The following year exhibited a 
 new and unlooked-for event in Edinburgh — the failure of one of its 
 established banking-houses. The family of Fairholme had for 
 some generations been considered as of distinguished credit and 
 reputation. They dealt largely in com like their neighbours, 
 in receiving money on deposit, and in exchanges. The partners 
 at that time were Adam and Thomas Fairholme, brothers, which 
 was also the firm of the house. In the course of the year 1761, 
 in the prospect of peace, Adam Fairholme had gone to London 
 and had speculated largely in the public funds, which, on an 
 expectation of the peace taking place sooner than actually hap- 
 pened, had risen considerably, so that Messrs Fairholme thought 
 they had acquired great wealth by their speculation, and indeed 
 the general belief among Scotch people in London was that Adam 
 Fairholme might have realised not less than £70,000 at one 
 period. By his continuing his operations, they lost their imaginary 
 profits ; and being tempted like losing gamesters to enter still more 
 deeply into the Alley, the whole affair ended most unhappily. 
 Adam Fairholme remained in London, carrying on this scheme of 
 stock-jobbing, probably with various success, till he was able to go 
 on no longer, and in the month of March 1764;, he declared him- 
 self bankrupt and left the kingdom.* The necessary effect of 
 this was the bankruptcy of their house at Edinburgh, which 
 stopped payment the same month. 
 
 As the misfortune of the Messrs Fairholme was known to have 
 been occasioned by their speculations in the Alley, it produced no 
 injurious effect on the credit of the other established banking- 
 houses in Edinburgh. Nevertheless, the situation of money trans- 
 actions there was extremely unpleasant. The rate of exchange 
 for bills on London was as high as three, four, and even five per 
 cent, against Scotland. This of necessity occasioned demands on 
 the banks at Edinburgh for specie, which they were unable or 
 unwilling to answer ; and for that reason they avoided advancing 
 money for the accommodation of the trade of the country, lest 
 their notes, as would have infallibly happened, should instantly 
 return on them for specie. In London the character and credit of 
 Scottish paper was at the lowest ebb, and the Bank of England 
 
 * His fate at last was a tragical one. When in the vessel in which he had 
 embarked for France, a Bow Street officer came alongside in search of a cxilprit 
 who had made his escape from justice, and poor Mr Fairholme, having unhappily 
 conceived the idea that the officer was in search of him, threw himself over- 
 board and was drowned. 
 
MEMOIRS OF A BANKINQ-HOUSK. 21 
 
 vas extremely sliy of discounting bills dravvn on London from 
 Edinburgh. It was therefore a task of no ordinary difficulty 
 to conduct the aiFairs of our two houses with safety. For the 
 house at London, being a mercantile concern, was almost entirely 
 dependent on discounts, whose credit therefore the house at 
 Edinburgh was bound, for their o^vn sakes, to support, as the 
 slightest suspicion against that establishment must have proved 
 fatal to the other. Through this troubled state of things, however, 
 the partners by prudent management were fortunately able to 
 steer without damage. The utmost harmony prevailed among 
 themselves, and Messrs Coutts behaved to us with kindness and 
 cordiality, evincing themselves on every occasion the patrons and 
 protectors of our establishment. 
 
 In the month of September 1763, 1 went to Holland, ostensibly 
 for the purpose of settUug an outstanding account with William 
 Strachan of Rotterdam, the former partner of Mr John Coutts ; 
 but in truth, at the same time, from a strong desire on my part 
 of visiting the continent. After remaining some time at Rotter- 
 dam, where I received the greatest civilities from Mr Crawford, 
 Mr Davidson, Mr Livingston, Mr Manson, and others, Scotch 
 merchants, and making the tour of Holland, I proceeded by 
 Antwerp and Brussels, through Flanders, to Paris, whence, after a 
 stay of a month, I returned to Rotterdam, in order to finish my 
 business, in which, however — although from no fault of mine — I 
 made but Uttle progress. Thence I came back to London, and, 
 after a stay of a few weeks, returned to Edinburgh, having been 
 absent four months. In February 1764, Mr Hunter went up to 
 London, where he remained till June ; and Mr Herries having 
 resolved on a visit to Spain, Mr Hunter returned to London in 
 September, and remained till the month of May 1765. On his 
 return to Edinburgh, it was with extreme concern I learned from 
 him that matters were by no means right with regard to Mr 
 Cochrane. It had been always imderstood that he was not a man 
 of much property ; but it happened that he owed some money, 
 although not to a great extent, to persons in Scotland, of which he 
 had not acquainted his new partners. His creditors, seeing him 
 now established in a respectable concern, called for pa3rment ; and 
 his partners, for the sake of the credit of the house, found them- 
 selves obliged to advance the means. This, however, was no very 
 serious matter, as the debts were not considerable; but it was 
 discovered in no long time that his residence in London was in no 
 respect expedient. Mr and Mrs Cochrane, as I have said, lived 
 in the house in Jeffrey's Square, where the counting-house was 
 
23 MEMOIRS OF A BANKING-HOUSE. 
 
 kept, and it soon appeared that tlieir expenses were beyond what 
 they could afford. Mr Cochrane, too, being totally unacquainted 
 with the business of such a house, was not only unable to give any 
 assistance — a circumstance which might have been put up with, 
 because it had been partly foreseen — but was in hazard of 
 doing harm in the capacity of an acting partner. All these cir- 
 cumstances together, seemed to Mr Herries to render it very 
 desirable that Mr and Mrs Cochrane should withdraw from 
 London ; and Mr Herries determined, when the expiration of the 
 first term of three years of the contract should afford an oppor- 
 tunity to make such an alteration, with regard to Mr Cochrane, 
 as seemed to be absolutely necessary for the preservation of the 
 houses, as well as for Mr and Mrs Cochrane's own personal 
 advantage. In this opinion, Mr Hunter cordially concurred with 
 Mr Herries, and Mr Stephen and I were most reluctantly com- 
 pelled to give our assent also to the measure : otherwise a breach 
 among the partners must have inevitably taken place, which 
 might have been productive of the most injurious consequences to 
 us all. For Mr Herries and Mr Hunter were resolved, at 
 all events, to separate themselves from Mr Cochrane, and I well 
 knew that Mr Stephen and I were utterly incapable of carrying on 
 the house by ourselves, even with all the patronage which Messrs 
 Coutts could have given us. Notice was accordingly given to Mr 
 Cochrane in terms of the contract, that the partnership with him 
 was to be dissolved at the end of the first three years. This 
 measure was highly resented by Messrs Coutts, as an affront offered 
 to them in the person of their relation. Much correspondence, as 
 well as personal application, ensued on the part of Messrs Coutts, 
 with the view of getting Mr Cochrane continued in his former 
 situation. But Mr Herries and Mr Hunter, who had repaired to 
 London in the month of January 1766, remained immovable in 
 their resolution. In order, if possible, to preserve friendship 
 among us, it was at first proposed by some of the partners that 
 Messrs Coutts should hold Mr Cochrane's share in trust for his 
 use. But this Messrs Coutts refused, and would not hear of any- 
 thing short of his remaining in his original situation. They also 
 urged, as a reason for decUning it, that it might hurt themselves as 
 bankers by their being supposed to be partners in a mercantile 
 company. Afterwards they seemed disposed to accede to the 
 proposition, provided it could be kept secret ; but so many difficul- 
 ties occurred about carrying it into execution, that Mr Herries 
 and Mr Hunter declined it in their turn, and instead of a share of 
 the house, made offer of an annuity to Mr and Mrs Cochrane, 
 
MEMOIRS OP A BANKING-HOUSE. 23 
 
 which was at last assented to by Messrs Coutts, when they fomid 
 they could not make a better of it, and the annuity was fixed at 
 £200 per annum during the joint lives of Mr and Mrs Cochrane, 
 and £100 to the survivor, which continued to be paid to their 
 dying hour. The separation from Mr Cochrane took place in 
 January 1766, and a new contract was signed by Mr Stephen, Mr 
 Herries, Mr Hunter, and me. This unhappy quarrel with Messrs 
 Coutts put a period to all friendly intercourse between them and 
 us, and I may safely say that no incident of my life has ever given 
 me half so much uneasiness ; for I considered myself im.der 
 strong ties of gratitude to Messrs Coutts, by whom I had been at 
 first received into the house — a very singular favour — at a time 
 when they stood in no need of a partner. I therefore considered 
 myself as standing in a very diflFerent point of view from Mr 
 Herries and Mr Hunter, who had come into the house on fair and 
 equitable agreement, at a period when new partners were necessary, 
 and who had been selected by Messrs Coutts as the most proper 
 for the purpose. It was indeed true, as they said, that they merely 
 exercised a power which the contract left them, of dissolving 
 partnership for the general good. But they certainly departed 
 from the agreement they had entered into of allowing Messrs 
 Coutts to fill up the vacancy, for which they urged the absurdity 
 of such a clause, and the provision they were willing to make for 
 Mr and Mrs Cochrane. I was compelled, however, to go along 
 with Mr Herries and Mr Hunter, from a consciousness of my not 
 having it in my power to do anything else. 
 
 Notwithstanding, however, this separation from Mr Cochrane 
 causing a breach of former cordiahty between Messrs Coutts and 
 the partners — Mr Stephen excepted, who was not considered as 
 having taken any part in the matter — no other apparent conse- 
 quence took place, except the omitting Mr Cochrane's name in the 
 firm of the house at London, which was changed to that of Herries 
 & Co. But all friendly intercourse in business instantly ceased : 
 with Mr Herries — whom they considered, perhaps not without 
 reason, as the prime mover — I believe it was never resumed, and 
 I shall have occasion to mention some events which afterwards 
 tended to widen the breach between him and them. With Mr 
 Hunter, Mr James Coutts had much intercourse respecting the 
 politics of Edinbiirgh, when he came down in autumn 1767 to 
 renew his canvass for the representation of the city in parliament, 
 in which Mr Himter, being a member of the town-council and a 
 most active canvasser, was a useful partisan. To me both the 
 brothers expressed more cordiality, being sensible, I believe, that 
 
24 MEMOIHS OP A BANKING-HOUSE. 
 
 althougli I had joined with Mr Herrles and Mr Hunter from a 
 conviction of necessity as to Mr Cochrane's retiring from London, 
 yet that I was disposed to have brought about that measure, if 
 possible, in such a manner as might have preserved friendship 
 between them and us. When I afterwards went to London in 
 1768 — where I remained a twelvemonth on Mr Herries going again 
 to Spain, and, indeed, as long as he lived — Mr James Coutts 
 behaved to me with much civility, as Mr Thomas Coutts has also 
 done ever since, although he shewed a marked proof of there being 
 no cordiality between his house and ours, by his employing Messrs 
 Mansfield & Co. as his correspondents in Edinburgh. He and I 
 still occasionally exchange letters, however, when anything occurs 
 in which I can be useful to him here ; and even that slender 
 degree of intercourse I feel some satisfaction in keeping up, from a 
 grateful recollection of my original obligation to his family. But to 
 return from this digression. 
 
 After the execution of the new contract in 1766, the two houses 
 were carried on, as before, with harmony, at least among the part- 
 ners themselves. Little new or extraordinary, as far as I recollect, 
 occurred in the way of business in Edinburgh until the month of 
 August 1769, when the banking-house of William Hogg and Son 
 stopped pajrment. Old Mr Hogg had carried on business in Edin- 
 burgh for many years with some reputation. He was a man very 
 strict in the observance of all the external forms of religion, and 
 he had been justly commended for having made a voluntary sus- 
 pension of his payments from an apprehension that his aifairs were 
 in disorder. Having somehow got these arranged, he had gone on 
 again with increased reputation and credit. But being extremely 
 confused in keeping his accounts, as well as inattentive to the 
 credit of those whom he trusted, and having allowed himself to be 
 wheedled into a connection with a projector to whom he advanced 
 considerable sums of money for working a lead-mine which totally 
 failed of success, his affairs had again become embarrassed. His 
 character for integrity, however, enabled him to continue to do 
 business as if he were a man of solid property, and in this he 
 probably deceived himself as well as the world, from the confusion 
 in which he kept his books. On the death of Mr Hogg, his son, Mr 
 Thomas Hogg, continued to carry on the house under its original 
 firm, until, being able to go on no longer, he came to a stoppage as 
 stated above. He had some turn for literature and belles lettres, 
 and I entertained the best opinion of his honour and integrity. 
 The engagements of his house were not very extensive ; yet a 
 number of people, who had deposited cash in their hands, lost 
 
MEMOIES OP A BANKING-HOUSE. 25 
 
 money by the failure, particularly a great many mercantile people 
 in Shetland. They owed a few hundreds to our house, on which 
 we received a dividend, but which was not paid, nor were the 
 affairs of the bankruptcy finally wound up for more than twenty 
 years after. 
 
 No general bad consequences followed this bankruptcy, and 
 the concerns of our houses went on without interruption both at 
 Edinburgh and London. At this last place Mr Herries — who had 
 removed the counting-house from the original situation in Jeffrey's 
 Square, in which Mr Cochrane resided, on the differences taking 
 place between him and us, to a house in Oxford Court, Cannon 
 Street — continued to be the chief acting partner. Mr Stephen 
 almost always resided at Edinburgh, and either Mr Hunter or I 
 was constantly present to give him our assistance, or rather indeed 
 to take upon ourselves the sole direction ; in which we were by no 
 means free from difficulties, not with regard to the carrjdng on the 
 business itself, for nothing could stand higher than the credit of the 
 house and the character of the partners, but by reason of the state 
 of health of our partner, Mr Stephen, and the situation of his 
 private affairs. I have mentioned that Mr Stephen had been 
 originally a tradesman on a rather limited scale. He had been 
 afterwards a partner in the house of Stuart, Stephen, and Scott, 
 wine-merchants, from which he was brought to be a partner with 
 Messrs Coutts. Having had no stock at his outsetting in business, 
 I suppose when he joined Messrs Coutts he was not worth any- 
 thing. His share in the house was not great, and the corn-trade 
 in which they dealt was subject to much fluctuation. When, 
 therefore, our new copartnery commenced in 1763, Mr Stephen 
 owed a considerable debt to the old partnership, which was 
 included in the list of those debts left, for account of Messrs Coutts. 
 But as he had an allowance of £200 for keeping a table for enter- 
 taining the friends and correspondents of the house, as his wife 
 was an admirable economist, and he himself a man of no personal 
 expenses, his share of the profits of our house had enabled him to 
 make a considerable reduction of this debt. Still, however, we 
 could not but feel some uneasiness for the appearance it would 
 have to the world if, after having separated from Mr Cochrane 
 because he was living beyond his income, Mr Stephen, who was 
 now advanced in years, should be found at his death to have 
 been in a state of insolvency. 
 
 Another unpleasant circumstance had occurred. Sir Robert 
 Herries and Mr Hunter had conceived an idea that, the business 
 of underwriting being considered a profitable one in London, the 
 
26 MEMOIRS OF A BANKING-HOUSE. 
 
 credit of the house there gave us a right to embark in it with a 
 prospect of advantage, a measure in which my unwillingness to 
 oppose any scheme of theirs induced me to acquiesce, contrary, in 
 some degree, to my own sentiments, which rendered me averse 
 from any hazardous kind of business. Conscious as we were, 
 however, that Mr Stephen was not possessed of any property, we 
 conceived it to be folly to share the gains which we looked for 
 from this underwriting business with one who was incapable of 
 bearing his share of the loss, if such should be the ultimate issue 
 of the concern. We therefore entered into a mutual agreement to 
 carry on the underwriting business for our own separate account, 
 without Mr Stephen's knowledge or participation; a measure 
 extremely reprehensible among partners, and, indeed, in direct 
 violation of one of the articles of our contract, by which all of us 
 were debarred from engaging in any trade or concern separate 
 from the general business of the house : an exception in the con- 
 tract had been made in favour of Mr Herries, but merely as far as 
 related to the concerns of his house in Spain. This led also to a 
 concealment from Mr Stephen of the private correspondence 
 between Mr Herries, Mr Himter, and me, which, till then, we had 
 always mutually communicated to each other. As his bodily 
 strength decayed with increasing years, he began also to exhibit 
 symptoms of mental debility, and, like all weak men, felt not only 
 a jealousy of his being deemed a cipher in the counting-house, but 
 a desire to exhibit himself as a man of business. In those days it 
 was the custom for the merchants and bankers in Edinburgh, to 
 assemble regularly every day at one o'clock at the Cross, where th6y 
 transacted business with each other, and talked over the news of 
 the day ; and as there were among the merchants at that time — I 
 speak of the period before 1772 — several gentlemen of a literary 
 turn, and possessed of considerable powers of conversation, we were 
 joined by many who had no concern in the mercantile world, such 
 as physicians and lawyers, who frequented the Cross nearly with as 
 much regularity as the others for the sake of gossiping and amuse- 
 ment merely. Amidst this motley group did poor Mr Stephen 
 insist on exhibiting himself daily, a walking spectre of mortality, 
 hanging on his servant's arm, in a manner extremely distressing 
 to us his partners, and to every friend who wished him well. All 
 these circumstances combined to make it desirable for Mr Herries, 
 Mr Hunter, and me, to arrange for his withdrawing from the 
 copartnery, which we were fortunate enough to accomplish by 
 means of his two sons-in-law, Mr Fall of Dunbar, and Mr Blair 
 of Balthoyock, with whom we agreed that we should make him 
 
MEMOinS OF A BANKING-HOUSE. 27 
 
 an allowance of £2400, one-half to be paid in money, and the 
 other half by an annuity of £300 per annum during his hfe. The 
 money did somewhat more than extinguish the debt he owed ; and 
 the annuity, with Mrs Stephen's turn for economy,* was perfectly 
 sufficient in those days for their comfortable subsistence. The 
 agreement was signed in August 1771. Mr Stephen died in 
 September 1774. 
 
 By this arrangement the sole property of the two houses of 
 Edinburgh and London became vested in Mr Herries, Mr Hunter, 
 and me, and thus the last link was broken of the original connec- 
 tion between Messrs Coutts and us. But we still continued to 
 retain the firm of John Coutts & Co., which Messrs Coutts had 
 not desired to see relinquished. 
 
 According to the new contract for Edinburgh, each partner had 
 one-third. But a fourth of the London house was ceded to Mr 
 Herries's two brothers, Charles and William, who, after being bred 
 to business in his house at Barcelona and admitted partners there, 
 had come to reside with him in London, and to George Henderson, 
 Mrs Herries's brother, who had been originally bred a writer at Edin- 
 burgh, but on his sister's marriage had become a protege of Mr 
 Herries, and had also been sent to Barcelona. These gentlemen 
 were announced to the world as acting partners in the house at 
 London ; but it was understood among ourselves that they were 
 to be relieved by us of any bad debts that might arise beyond the 
 amount of their profits. Charles and William Herries were both 
 of them very able men of business, perfectly acquainted with the 
 commerce of Europe, and therefore extremely useful assistants in 
 the business of the London house, in which they remained till 'the 
 separation of the two houses. 
 
 Very soon after this arrangement with Mr Stephen, two impor- 
 tant events took place, extremely memorable in the history of the 
 house. I mean the commission from the Farmers-general of 
 France for the purchase of tobacco in Scotland ; and the erecting 
 of the Banking Company in St James' Street, London. The great 
 company in France, known by the name of the Farmers-general, 
 from their having farmed the public taxes of that kingdom under 
 the old government, enjoyed by consequence the exclusive privilege 
 of importing tobacco into France, with which they were chiefly 
 supplied from Scotland, the article being originally procured by 
 the merchants of Glasgow from North America. At this time 
 
 * She was liis second wife. Provost Coutts's sister, the mother of his children, 
 had been long dead. Mrs Stephen was a very worthy woman, and uncommonly 
 attentive to her husband and all his connections. 
 
28 MEMOIRS OF A BANKING-HOUSE. 
 
 Messrs William Alexander and Sons, merchants in Edinburgh, 
 were the correspondents of the Farmers-general, and enjoyed the 
 lucrative commission of making their purchases of tobacco ; but 
 they had become dissatisfied with the manner in which Messrs 
 Alexander transacted their business, so that they were not indis- 
 posed to make a change of their correspondents in this country. 
 Mr Herries, in one of his journeys through France into Spain, 
 had travelled in company with a gentleman somehow connected 
 with the Farmers-general, and had continued to cultivate his 
 acquaintance as he occasionally visited France ; so that when the 
 conduct of the Messrs Alexander in the execution of the orders of 
 the Farmers-general had been disapproved of by them, Mr Herries 
 procured an order from them for the purchase of two thousand 
 hogsheads of tobacco at Glasgow, a commission which he executed 
 so much to their satisfaction that he was appointed their sole 
 agent in Scotland. As this lucrative commission had been pro- 
 cured solely by Herries's personal influence at Paris, it was thought 
 no more than reasonable that, instead of his third share with 
 Mr Hunter and me of the ordinary profits of the house at Edin- 
 burgh, he should have one-half of the commission on the purchases 
 of tobacco. In consideration of which, however, he was to be at 
 all the expense of his journeys to Paris, as well as of any presents 
 or other outlay which he might be put to in preserving his influence 
 with the Farmers-general.* The other half was thrown into the 
 ordinary profits of the house. 
 
 I shall very soon have occasion to mention the manner in which 
 the house was deprived of this valuable branch of business. 
 
 The other event I have alluded to was our forming a new esta- 
 blishment in London. In the year 1768 — almost the whole of 
 which year and a part of the next, I spent as a guest with Mr 
 Herries in London, attending the counting-house — ^Mr Herries con- 
 trived a plan for supplpng travellers with money on the continent, 
 which, for its ingenuity, deserves special mention, and of which 
 the success fully rewarded the merit of the invention during many 
 years, until the present war in a manner put a stop to all conti- 
 nental travelling. As Mr Herries commimicated to me not only 
 the first idea, but every subsequent step of his plan till he brought 
 it to a state of maturity, it is with pleasure I look back to the 
 many pleasant evenings he and I spent together at his fireside 
 discussing this plan. In the course of his own journeys on the 
 
 * I recollect to have heard him say, that, the daughter of a leading man of the 
 rnunber being married while he was at Paris, he made her a present of a set of 
 di'essing-plate. 
 
MEMOIRS OF A BANKING-HOUSE. 29 
 
 continent, and in the transacting of business, he had remarked 
 that travellers were not unfrequently exposed to inconvenience 
 and disappointment while abroad, by having their letters of credit 
 limited to particular places, while they might wish, perhaps, to 
 change their route, but from which they were prevented until they 
 wrote home to have their credits altered, and, perhaps, before those 
 new credits reached them, they had again changed their plans and 
 wished to follow a still diiferent route. Mr Herries bethought 
 him, therefore, of issuing what should serve as an universal letter 
 of credit in the form of promissory-notes, which should be payable 
 at all the principal places in Europe where travellers were likely 
 to be. For this purpose it became necessary to establish corres- 
 pondents in all those various places who would give money to 
 the travellers for these promissory-notes, at the current exchange 
 of the place on London, without any charge or deduction whatso- 
 ever. The convenience to the traveller of this device was obvious ; 
 and Mr Herries was to find his profit from the use of the money, 
 which of course was to be paid to him on his issuing the notes, 
 till they again came round to London, after having been paid by 
 his agents abroad. Such was the plan, which, after a variety of 
 changes and modifications, he ultimately fixed on, and of the 
 success of which he was very confident. As he saw the propriety, 
 indeed the necessity, of its being undertaken by men of greater 
 credit and capital than the partners of the house by themselves 
 could pretend to, he proposed that a few gentlemen of opulence 
 should join with them and form themselves into a separate society 
 for the purpose. In the prosecution of this idea, he resolved to 
 submit the plan, in the first place, to Messrs Coutts, with whom 
 he still maintained intercourse, although there was no cordiaUty 
 between them. Messrs Coutts, however, returned the papers, 
 sapng the proposal did not suit them. He also made it known to 
 several other respectable men of business, who all gave due praise 
 to the ingenuity of the contrivance, but all, like Messrs Coutts, 
 declined taking any concern in it except Mr (now Sir William) 
 Pultney, who was Mr Herries's intimate friend. Not discouraged 
 by these disappointments, and still very fond of his project, Mr 
 Henies resolved to set it agoing by the house in London, in con- 
 nection with one or two private friends ; for it was attended with 
 no risk to those concerned, should it not succeed, beyond the loss 
 of their labour in establishing the necessary correspondence in the 
 principal towns on the continent, which he was enabled to do by 
 means of his friends, Messrs Hope of Amsterdam, whose commer- 
 cial concerns were more extensively spread over Europe than those 
 
30 MEMOIRS OF A BANKING-HOUSE. 
 
 of any other mercantile house whatsoever. As it was deemed 
 necessary, however, that the promissory-notes should he issued to 
 travellers from a banker's house at the west end of the town, as 
 being more convenient than the city for those men of rank and 
 fortune who were most likely to make use of them, Messrs Coutts 
 were asked whether they would choose to act as bankers to the 
 concern, and give out the notes at their house, although they 
 declined to be concerned as partners. To this they agreed, and the 
 plan was set agoing accordingly, and an account opened with 
 them, on which some money was deposited in common form. 
 This was about the year 1770. 
 
 When Mr Herries came to Scotland, in summer 1771, he 
 informed Mr Hunter and me that he had good reason to believe 
 that, although Messrs Coutts had agreed to be the bankers of the 
 concern, and said nothing, as indeed they could say nothing, 
 against the credit of the partners, they spoke of the plan of the 
 travelling notes in so indifferent a manner to those who called 
 on them for information, as rather discouraged inquirers from 
 availing themselves of the notes than otherwise. He also said he 
 had reason to know that they had been making inquiry in Paris, 
 in order to establish a similar scheme of their own. Whether he 
 was correctly informed, I cannot tell ; but he declared his firm 
 opinion to be, that either the plan must be altogether abandoned, 
 or we must open a house of our own, whence these notes might be 
 issued. With the latter view, he proposed that his uncle, Mr 
 Robert Herries, senior, should be requested to join in the scheme, 
 and become the acting partner, for which he was deemed extremely 
 well qualified, by having been formerly a merchant in Rotterdam, 
 although he had retired from business and then lived on his 
 estate in the country. He also stated that in contemplation of this 
 plan, he had, before he left London, been looking about for a suit- 
 able house, and had seen one for sale in St James's Street, which 
 would exactly answer the purpose. 
 
 On his stating this idea to Mr Hunter and me, we readily went 
 into the measure, from our deference for Mr Herries's opinion. His 
 uncle was sent for to Edinburgh, and a contract of copartnery 
 was executed, whereby Mr Robert Herries, senior, Mr Herries 
 himself, his brothers Charles and William, and George Henderson, 
 Mr Hunter and I, Mr Pultney, and Sir William Maxwell of Spring- 
 kell, became partners in a society to be called the London Exchange 
 Banlcing Company, for the purpose of issuing promissory-notes to 
 travellers, payable on the continent, to commence on the 1st 
 January 1772, at the house in St James's Street, which, on his 
 
MEMOIRS OP A BANKING-HOUSK. 31 
 
 return to London, Mr Herries immediately acquired for the 
 purpose. 
 
 As the first ofifer of a concern in the scheme had been made to 
 Messrs Coutts, and they had decUned it, and as it was thought 
 impossible to continue to issue the notes from their house, because 
 it seemed not altogether a business to their liking, I. confess it did 
 not occur to me that I was doing anything improper towards 
 Messrs Coutts by engaging in this new copartnery, and it was not 
 till a few weeks after the house in St James's Street was opened, 
 that it struck me that this new establishment, although primarily 
 for the issuing of notes to travellers, was to be, to all intents and 
 purposes, a banking-house — ^by consequence a rival to Messrs Coutts 
 in their own line of business. Mr Herries, in his correspondence 
 with us, urged the propriety of our solicitiog our friends to 
 patronise this new establishment. My answer was, that when we 
 knew of persons meaning to go abroad, we should certainly ask 
 them to take travelling notes ; but that I was scrupulous of 
 soliciting general business to the house, lest it might appear an 
 attempt at interference in Messrs Coutts's business. This produced 
 an answer from Mr Herries, avowing that he had no intention to 
 decline any banking business which might accompany the trans- 
 acting of the travellers' notes, and then it was that I became fully 
 sensible of the real nature of the plan. The effect it produced on 
 the mind of Messrs Coutts was very soon fully explained to me by 
 our friend Mr Seton of Touch,* to whom I had written, requesting 
 him to procure me an answer from Mr James Coutts to a pro- 
 position I had made for becoming tenant of his house in the 
 President's Stairs, Parliament Close, where the counting-house was 
 kept, which was occupied at that time by Mr Stephen, now about 
 to remove from it. Mr Seton wrote to me that Mr Coutts seemed 
 not altogether disposed to give me the use of this house, probably 
 on account of our new establishment, which he considered as a 
 direct invasion of his own, which we were bound by every principle 
 of honour to keep clear of, from our estabhshment having been 
 originally of Messrs Coutts's own formation. This led to a corres- 
 pondence on the subject with Mr Seton, who was the friend of 
 both parties, and which goes at considerable length into the history 
 of our original connection with Messrs Coutts : the two following 
 letters between Mr Herries and me will still more clearly shew 
 our sentiments on the question. On the 17th January 1772, I 
 
 * [Hugh Smith, son of an eminent merchant in London, had married the 
 heiress of Touch, and now bore the name and arms of that old family.] 
 
32 MEMOIRS OF A BANKING-HOUSE. 
 
 wrote, in name of our firm, to Mr Herries. ' We observe what 
 you say of our writing letters to our friends in favour of the office 
 in St James's Street. We have constantly recommended their 
 notes to travellers, as they came in our way, and it does not occur 
 to us that there are at present any friends who could be useful 
 with whom we have much influence. But if we had, we are not 
 very clear how far we ought with propriety to carry our solici- 
 tations, lest we should be thought to set out on the footing of 
 rivals to Messrs Coutts in their own branch of business. We 
 think, after what has passed between us and Messrs Coutts about 
 the issuing of exchange notes, we are fairly acquitted to the world 
 and ourselves for endeavouring, by means of an office in St James's 
 Street, to obtain a more extensive circulation to those notes, and 
 we can likewise see no harm in accepting any common banking 
 business which may come to that office in a secondary way in 
 consequence of issuing exchange notes : but we submit it to you 
 how far it would be thought ungenerous in us, during the con- 
 tinuance of our original contract, of which there remain three 
 years, and after we have risen to a state of independence on the 
 foundation of the two houses which they transferred to us— - 
 although we pay them a valuable allowance for that transfer — 
 that we should employ the influence we have acquired to 
 establish ourselves in their own branch of business, especially 
 as they would, no doubt, have made it a restriction in our agree- 
 ment with them at first, had they supposed we would embark in 
 such an undertaking. If Messrs Coutts take offence at our having an 
 office in St James's Street on any footing, they may very probably 
 recall the firm, and, in that case, it will be yielded up to them. 
 But we are not qmte certain how far it would be proper to relin- 
 quish the firm of ourselves. Perhaps the world would consider 
 such a step as a declaration of hostilities on our part, and they 
 might accuse us of ingratitude for thus affecting to throw off all 
 manner of correspondence or connection with Messrs Coutts, after 
 we had answered our own purposes by the original agreement we 
 made with them.' 
 
 To this letter, Mr Herries wrote the following answer in the 
 name of the house at London : 
 
 ' 2lst January 1772. 
 ' We have yours of the 17th, and are sorry to observe that you 
 seemed to have misunderstood the intention of the hint we gave 
 you to take an opportunity of mentioning to any of your acquaint- 
 ance that you are concerned in the new establishment in St James's 
 
MEMOIRS OP A BANKING-HOUSE. 33 
 
 Street. You might be sure we could not mean to desire you to 
 solicit [business], either by the partners or their friends. But 
 there could be no harm, in our opinion, in making the thing known 
 by this means either to friends or others, and this was all we 
 aimed at, leaving it to speak for itself, and everybody to do as they 
 please. It is in this way that we have mentioned it by cards not 
 only to our friends, whom we thought most likely to be of service, 
 but also to several of the nobility ; and it is very indifferent to us 
 into whose hands those cards may fall, as no fault will probably 
 be found with them, unless by those who are disposed to find 
 fault at all rates. "We neither in those cards nor in the course of 
 conversation busily pubUsh our intentions, but endeavour, as 
 modestly as possible, to shew what they really are, without attempt- 
 ing either to conceal them or cloak our money-banking business 
 under the former plan of exchange notes. If we were so disposed, 
 nobody would believe us, and think meanly of us for making use 
 of any covered language, when the truth speaks for itself without 
 our telling it. Sir Charles Asgill and some others, before there 
 was any appearance of a counter, or anything of that kind, in St 
 James's Street, and before we had let anything drop of our second- 
 ary views in that establishment, plainly asked us if such was not 
 the intention of that house, and you may be sure we were above 
 denying it. We thought at first that Messrs Coutts and the other 
 bankers in general would have favoured our plan, while we steered 
 clear of any connection in their business. But the reverse has 
 been the case with them all ; and we believe none of them have 
 applied for our notes, but when expressly ordered by their custo- 
 mers so to do, and in this way we have issued more in proportion to 
 indifferent banking-houses than to those appointed to receive our 
 lodgments in the Strand, who did wrong to accept of our business 
 unless they had been disposed to do our plan common justice. It is 
 plain from what one of them mentioned, on our first telling them of 
 the fonriation of the present Exchange Banking Company, that they 
 either considered that company already on the footing of rivalship, 
 or suspected what has since happened, although at that time far 
 from our intention. It is above a twelvemonth since we were 
 informed that, in order to be on a footing with our plan, they had 
 agreed with a house at Paris to pay their letters of credit in the 
 same way as our notes, charging a commission of one per cent. ; and 
 we have been since informed, from pretty good authority, that they 
 had written to Paris for a clerk, as was supposed to assist them 
 in furnishing credit to travellers. Whether they mean to adopt 
 our plan altogether or not, we cannot say ; but we have heard 
 
34 MEMOIES OF A BANKING-HOUSE. 
 
 that two banking-houses have this in contemplation. But we shall 
 be noways sorry if they both put it in practice, since we think 
 such an attempt wiU do us more good than harm. As to what 
 restriction they might hare proposed to us nine years ago, had 
 they then foreseen the present establishment in St James's Street, 
 or as to our agreeing to such restriction, it is impossible now, at 
 this distance of time, to say what our feelings might then have 
 been. But certain it is, that none of us were taken into the suc- 
 cession of their houses merely for GocFs sake, and Mr Herries, in 
 particular, is conscious to himself that his fortune and principles 
 were at that time so independent as to have prevented him from 
 submitting to any restrictions not to do business — even had he 
 been ever so dependent — ^in a lawful and honest way in any part 
 of the world. All they had a right in such a case to require of 
 us was, not to sohcit their customers j and for this no restriction 
 was necessary, as none of us were disposed so to do (or to take 
 them), unless they come of themselves, in which case we are under 
 no ohhgation to refuse them. It is also our opinion, and has been 
 so for some time past, that we ought to change the firm ; for we 
 have no doubt that they will, however unjustly, accuse us of 
 making use of their own name to draw their London connections 
 from them, should any of those connections perchance leave them 
 and come to St James's Street.' 
 
 In consequence of my letter, Mr Herries also wrote to Mr Seton 
 as follows : 
 
 ' I have received a letter from Sir W. Forbes, in which he tells 
 me that you had written him that we had been sohciting Messrs 
 Coutts's best friends in the banking way, and that you had seen 
 one of our letters to this purpose to Lord Strathmore. You musj; 
 give me leave to say that there must be some mistake in this 
 matter. For I am as certain as I can be of anything, that I never 
 either wrote or signed such a letter to any person whatever, and I 
 am equally sure that neither my uncle nor any of my brothers 
 would do it without my knowledge. What I imagine has given 
 rise to this mistake must have been the card Sir William points 
 at in his answer to you. I cannot at this distance charge my 
 memory with the precise contents of the card; but I desire my 
 brothers to send you a copy of it along with the present letter, and 
 on a second reading, I daresay, you will be satisfied, as I fully am, 
 that it by no means bears the construction you had given it. At 
 least, I am sure that everything bordering on solicitation was 
 meant to be avoided in these cards, which, in justice to the others 
 concerned in the Exchange Banking Company, as well as to 
 
MEMOIRS OF A BANKING-HOUSE. 35 
 
 ourselves, we thought ourselves bound to write, not only to make 
 our intentions honestly and openly known as to the money banking 
 business, but also to prevent those who may be possessed of plans 
 with the first address * from going to the wrong place, from whence 
 some had returned unsatisfied. Biit on further inquiry,t 
 
 had afterwards come to the city for notice, and generously 
 warned us of what happened. Several of those cards were written 
 at the desire of some friend or other of those to whom they were 
 addressed, and I confess to you that we availed ourselves of the 
 opportunity to send some to others, perhaps to many, without being 
 desired, purely to make the thing the more known. When Lord 
 Bute was last abroad, we were informed of his having expressed 
 great approbation of the plan, and after his return, he desired a 
 friend of mine to tell me to call on him to explain it fully to him. 
 I never did call, but thought the least I could do was to send him a 
 corrected plan on one of the cards in question, and had yoa been 
 in London at the time, I very probably would have addressed one 
 to you also, without meaning harm to anybody. I feel that I have 
 been ill-treated by certain gentlemen, but I am not singular in 
 this ; and as we are all above being hurt by it, any sort of resent- 
 ment ought to be beneath us. I know how much you are our 
 real friend, and that it will give you pleasure to learn that 
 everything here is just as we ourselves could wish, for I am 
 thanked and caressed at all hands by those to whom our grati- 
 tude is due. I can also add that the necessary measures are 
 pursuing to render the office as permanent as it is lucrative and 
 ci'editable.' 
 
 Whether Mr Seton ever made any reply to this letter, I know 
 not. My correspondence with Mr Herries, however, will shew 
 what my sentiments were from the beginning with regard to 
 Messrs Coutts, although, unfortunately, I had not foreseen what 
 the consequences might be of establishing the office in St James's 
 Street. At the same time I confess that, on mature deliberation, I 
 felt very sincere regret that any such thing should have happened; 
 and had I foreseen all the consequences, when the plan of the 
 Exchange Banking Company was first arranged, I should probably 
 have declined to be concerned in it, though I have no room to believe 
 that any opposition on my part could have had the smallest effect 
 in preventing the plan from being carried into execution, especially 
 by Mr Herries, whose favourite object it was. Indeed, as his 
 
 * Meaning to Messrs Coutts's bank. 
 
 t Unintelligible in the original manuscript. 
 
36 MEMOIRS OF A BAHKING-HOUSE. 
 
 letters shew, he considered, himself at perfect liberty to establish 
 any fair and open branch of business in any part of London, where 
 he thought it might be attended with profit, and that he had not 
 otherwise attempted to rival Messrs Coutts than merely by making 
 his plan known, and leaving it to speak for itself. In these senti- 
 ments Mr Hvtnter most cordially concun-ed. But still I, for my 
 part, could not help feeling on this occasion, as I did on our sepa- 
 ration from Mr Cochrane, that I stood on very dififerent ground 
 with regard to Messrs Coutts from the other two ; but I must do 
 Mr Herries the justice to say that, on my expressing this senti- 
 ment pretty strongly to him, he very readily offered to allow me 
 still to withdraw from the concern, if I chose. The offence was, 
 however, by that time given to Messrs Coutts, and my then with- 
 drawing, while it would not have put a stop to the new concern as 
 to them, could scarcely have failed of producing some disagreeable 
 resvdts among ourselves. I therefore deemed it expedient to let 
 things go on as they were begun. 
 
 In this manner the establishment in St James's Street had its 
 origin, and I shall by and bye have occasion to speak of the 
 manner in which Mr Himter and I withdrew from that concern. 
 
 If there had been but little cordiality between Messrs Coutts 
 and us since our separation from Mr Cochrane, it may easily 
 be supposed that this new occurrence put an end to every 
 prospect of a reconciliation. Finding Mr James Coutts not likely 
 to give me possession of the house in the Parliament Close, 
 Mr Hunter and I resolved to hire that on the first floor of the 
 same stair belonging to Mr Hope, which, though too small to 
 accommodate my family, was sufficiently large for the pur- 
 pose of the counting-house, and our principal clerk, Mr 
 Bartlet (afterwards our partner), resided in it, to take care of 
 the premises. To this new counting-house we removed at 
 Whitsunday 1772. 
 
 About this time the partners engaged in two speculations, both 
 of which turned out unfortunately — which, however, I am glad to 
 record, because they strongly illustrate a principle which I hold 
 to be of the first importance, that a person who is in possession 
 of a natural and valuable branch of business should never 
 allow his time or his attention to be diverted to the prosecution 
 of objects which he does not understand, and which are foreign 
 from his proper line, for such speculations rarely come to any 
 good. 
 
 I do not exactly recollect how the first of the adventures took 
 place, because I was residing in London at the time when the 
 
MEMOIRS OF A BANKING-HOUSE. 37' 
 
 project was undertaken ;* but either Mr Hunter, or Mr Guthrie the 
 partner of Mr Arbuthnot — with both of whom Mr Hunter and I 
 lived in the most intimate habits of friendship and society — ^had 
 become acquainted with a Mr Fraser who had been manager of 
 a small paper-mill belonging to Mr Adrian Watkins, who held the 
 patents of king's printer and stationer. On Mr Watkins's death, 
 and the patents passing into other hands, Mr Fraser had repre- 
 sented so strongly to Mr Guthrie and Mr Hunter the advantageous 
 nature of the ti-ade of making paper, that he persuaded them to 
 embark in a scheme of building a paper-mill and establishing a 
 manufacture of that article. He argued that Scotland never sup- 
 plied itself with paper, either for writing or printing, but every 
 year imported to a very considerable amount, all of which would 
 be saved to the country, and at the same time a considerable 
 profit accrue to the undertakers, as labour was much cheaper in 
 Scotland than in England. Over-persuaded by Mr Fraser's argu- 
 ments, they accordingly feued some acres of ground from the pro- 
 prietor of Polton, on the river Esk, near Lasswade, seven miles from 
 Edinburgh, on which they erected a very extensive paper-mill, con- 
 sisting of five vats and everything to correspond, all on the most 
 enlarged scale, at a great expense — indeed, much beyond the 
 original idea formed by the partners, who were misled by Mr 
 Fraser ; and he perhaps erred from ignorance merely, for, having 
 been employed in a small work only in Mr Watkins's time, he had 
 no conception of the expense of one formed on such an enlarged 
 scale as that at Polton. When the buildings were completed, an 
 overseer was engaged in England to conduct the manufacture, and, 
 he dying, a second was brought from England, who also died. Mr 
 Fraser then stated that he considered himself to be so perfectly 
 master of the business as to be able to conduct the manufacture 
 alone, and to him was accordingly committed the sole charge of 
 the business, of which the partners themselves were totally ignor- 
 ant • nor had they either time or skill sufficiently to control his 
 management. The consequence was, that the manufacture was con- 
 ducted probably at too much expense, and the paper made proved 
 to be of an inferior quality. At first it had been agreed that the 
 mill should be erected by Mr Guthrie and Mr Hunter at their 
 own expense, and that our house and Arbuthnot and Guthrie as a 
 
 » When I say that I was absent when Mr Hunter engaged in and set agoing 
 this ill-fated adventure, I am far from meaning to charge him with having 
 embarked the house in it without my knowledge or consent. I have no doubt 
 that he had both ; but I had such implicit confidence in his judgment, that I 
 aJlowed him to proceed with the undertaking without interruption. 
 
38 MEMOIRS OF A BANKIKG-HOUSE. 
 
 copartnery should jointly carry on the manufacture of paper. But 
 afterwards, the whole expense of buildings and manufacture were 
 taken on themselves by the two companies. The business was 
 carried on for about three years without doing any good, till at 
 length the bankruptcy of Arbuthnot and Guthrie in the famous 
 year 1772 put an end to the concern, and left the whole loss on 
 our shoulders. Mr Hunter had by that time also become fully 
 sensible of the folly of the speculation, and we gladly availed our- 
 selves of the above event as a reason for bringing it to a close. 
 There was a large stock of paper on hand, which it became neces- 
 sary to dispose of, and with this view a variety of methods was 
 resorted to. Mr Fraser's incapacity for such a situation being but 
 too fully proved, he was discharged, and his clerk, named DufFus, 
 was employed' to dispose of the stock on hand. Duffias entered 
 into a traffic ynih booksellers, giving them paper for the purpose 
 of printing books, of which he took a quantity in payment for the 
 paper, and selling or exchanging these books with the trade as he 
 best could. Part of the paper, which lay on hand till the American 
 war, was consigned to New York, whence I recollect we received 
 account-sales, accompanied with an expression sufficiently descrip- 
 tive of the quality of the paper — ' that the printers of the news- 
 papers had bought some of it because they could not find any of a 
 better quality, and the apothecaries had bought the rest, because 
 they could not find any that was worse.' 
 
 Tired at length of such a traffic, we made an agreement with Mr 
 John Hutton, the lessee of the Melville paper-mill, to take over 
 the remaining paper, printed books, and outstanding debts, for a 
 stipulated sum, which enabled us to close the account, and ascer- 
 tain the loss. The buildings and machinery had been sold some 
 time previously for less than a third of their original cost. Thus 
 ended the concern of the Polton paper-mill company. 
 
 The other speculation I alluded to, as entered upon by Mr 
 Hunter and me, was, if possible, still more indefensible, because 
 more of a precarious nature ; but fortunately it happened that the 
 loss did not prove to be very extensive. It took place thus. When 
 Mr Hunter was married to a niece of the Earl of Cassillis, he became, 
 of course, much connected in friendship with that nobleman, on 
 whose estate there was believed to be a lead-mine, which had been 
 wrought, though with no success, a good many years before. Mr 
 Hunter, wishing to oblige Lord Cassillis, who was anxious that a 
 further trial of his mine should be made, mentioned the matter to 
 Mr Alexander Sheriff, merchant in Leith, who had a concern in 
 the lease of the Earl of Hopetoun's mines at Leadhills, and was 
 
MEMOIRS OP A BANKING-HOUSE. 39 
 
 supposed to be master of the subject. Mr Sheriff, a man of a 
 speculative genius and sanguine temper, grasped at the idea of 
 undertaking to work Lord Cassillis's mine, and it was agreed that 
 the earl himself, Mr Hunter, Mr Harries, Mr Sheriff, and I, should 
 enter into a copartnery for the pui-pose, but limiting the concern 
 so strictly, that we were each of us to contribute only £30 to a 
 jointrstock, for the purpose of making the trial, and an overseer, 
 named Barker, was engaged to carry it on so far as to ascertain 
 whether we might reasonably expect to hit upon a productive 
 vein of lead-ore or not. After working about a twelvemonth, Mr 
 Sheriff became bankrupt in the disastrous year 1772, and this 
 event, fortunately, put a stop to the undertaking, before any more 
 than the original subscribed sum was expended, which, therefore, 
 was all the loss that each of us sustained. I say fortunately, not 
 in allusion to the bankruptcy of poor Mr Sheriff, who was a very 
 industrious, honest man, but for us, as there is no saying to what 
 lengths we might have been led, for I regard mining as a very 
 deep species of gambling, whereby there has probably been more 
 lost upon the whole than gained. 
 
 The year 1772 will long be remembered in Scotland for the 
 numerous bankruptcies which took place at Edinburgh in the 
 month of June, and which may be said to have entirely changed 
 the current of the business in our northern capital. I have 
 formerly noticed the extensive speculations which were entered 
 into by some Scotchmen for the purchase and cultivation of lands 
 in the newly acquired West India Islands ; as weU as the spirit 
 which took place about this time for improvements in agriculture 
 at home.* Some of the houses which carried on the banking busi- 
 ness in Edinburgh, having embarked in these speculations, required 
 a larger capital than their o^vn resources could command. To this 
 must be added, the rage which then began to take place for build- 
 ing larger and more expensive houses, than had been customary 
 in Edinburgh before the plan of the New Town was set on 
 foot ; and larger houses necessarily led to more extensive estab- 
 lishments, as to furniture, servants, and equipages. At the same 
 time those projectors and improvers, flattering themselves with the 
 prospect of the immense advantage to be derived from their specu- 
 lations, launched out into a style of living up to their expected 
 profits, as if they had already reaUsed them. Such causes com- 
 bined had induced those gentlemen to have recourse to the ruinous 
 mode of raising money by a chain of bills on London ; and when 
 
 * [This is an oversight of the author. No such notice occurs in the earlier 
 part of his manuscript.] 
 
40 MEMOIRS OF A BAUKING-HOUSK 
 
 the established banks declined to continue a system of which they 
 began to be suspicious, the bank of Douglas, Heron, & Co., com- 
 monly known as the ' Ayr Bank,' was erected. But, instead of 
 proving a cure to the evil, they, by their improvident and injudi- 
 cious management, found themselves compelled to plunge into this 
 kind of circulation still deeper than the others, although with a 
 more solid foundation. The fictitious paper in the circle between 
 Edinburgh and London had thus arisen to an astonishing height, 
 and was falling into great and general disrepute in London, when 
 the first check was given to it by the failure of the London 
 banking-house of Neale, James, Fordyce, and Downe, which 
 had been but recently established. Alexander Fordyce,* a native 
 of Aberdeen, had gone to London, and become a clerk in a bank- 
 ing-house. Having acquired some knowledge of that business, he 
 persuaded Mr Rofiey, a brewer, and a man of some property, as 
 well as Mr James and Mr Neale, to establish a banking-house, of 
 which he was to be the principal acting partner. Not contented, 
 however, with the regular profits of their trade, he indulged in 
 speculative tendencies, by embarking deeply in the public funds, 
 in which he was at first successful, and was beUeved to have 
 acquired a large fortune. In consequence, he assumed a splendid 
 style of living ; had an elegant country-house at Roehampton, in 
 the neighbourhood of London; went into parliament j and affected 
 a profuse generosity in presents to his relations and connections 
 in Scotland. To crown his good-fortune, he had the address 
 to marry Lady Margaret Lindsay, a daughter of the Earl of 
 Balcarras, a lady of great beauty and accompUshments, doubtless 
 captivated by the splendour of his appearance and the reputation 
 of his wealth. His speculations in Change Alley, however, were 
 not always equally fortunate; and having large differences to pay, 
 he unwarrantably employed for that purpose, without the know- 
 ledge of his partners, the funds deposited in the house by their 
 customers. The moment that this became knovra to the other 
 partners, they very honourably stopped payment, in order that 
 they might do such justice to their creditors as was still in their 
 power ; but this bankruptcy set fire to the mine, which at once 
 
 * His father was Fordyce, a merchant in Aberdeen, who had acquired 
 
 some money as lessee o£ the York Buildings Company's estate of Belhelvie. 
 This gentleman had five sons, three of whom were literary characters of 
 eminence. One of them, a professor in Marischal College, Aberdeen, was 
 unfortunately lost in a vessel on the coast of Holland ; Sir William was a 
 celebrated physician in London ; James was equally celebrated as a preacher ; 
 Alexander, the fourth, was he of whom I am now speaking; and Robert, the 
 youngest, was a merchant in Aberdeen. 
 
MEMOIRS OF A BANKING-HOUSE. 41 
 
 blew up the whole traffic of circulation that had been carrying on 
 for a number of years. AU those houses in London who had 
 largely accepted bills drawn on them from Scotland — of which 
 the sum total was to an astonishing amount* — finding it no longer 
 possible to discount the remittances that had been made to them 
 for their reimbursement, were instantly compelled to stop payment, 
 and, by unavoidable consequence, the drawers in Edinburgh were 
 
 compelled to do the same. It was on Monday the of June 
 
 ' — emphatically called the Black Monday \ — that Fordyce's house 
 stopped payment. Another banking-house in London, of older 
 standing and greater eminence, which, induced by the idea of 
 perfect safety, and the temptation of a lucrative commission, had 
 become the correspondent of the Ayr Bank, and had been drawn 
 in to go under acceptance for that company to a very great extent, 
 also found themselves under the necessity of suspending their pay- 
 ments for a time ; but they soon resumed, and are still a banking- 
 house of eminence. So great was the alarm in London that day,J 
 and such the discredit into which every Scotch house was thrown, 
 that there was a violent run even on Mr Drummond's and Mr 
 Coutts's banking-houses, although they were no way engaged in 
 or connected with the chain of circulation from Scotland. The 
 resources of these two capital houses, however, were so great, and 
 they answered all demands with such readiness, that the run on 
 them lasted only during that single day. On Thursday afternoon 
 an express brought to Edinburgh the account of the failure of 
 
 * Douglas, Heron, & Co. alone had £400,000 of bills in circulation when they 
 stopped payment, and the whole circulation was computed at iG800,000. 
 
 \ [According to a contemporary record, the failure of Neale, James, Fordyce, 
 and Downe, took place on AVednesday the 10th of June 1772. The author ought 
 probably to have written Black Wednesday.'] 
 
 i [' Every day was ushered in with the disagreeable accounts of new failures, 
 and by the 19th no fewer than ten capital houses had stopped. "Words cannot 
 describe the general consternation of the metropolis on the 22d. A universal 
 bankruptcy was expected. The whole city was in an uproar, and many of the 
 first families in tears. Every countenance appeared clouded, occasioned either 
 by real distress, or by what they feared for their friends. * * The Messrs Adam, 
 of the Adelphi Buildings in the Strand, being unfortunately involved by the 
 failure of some capital houses, upwards of two thousand valuable artificers and 
 workmen, supported by their undertakings in different parts of the kingdom, 
 were thrown out of employment, and their families deprived of subsistence. 
 The poor men had begun their work in the morning, before the melancholy news 
 of their masters' misfortunes was communicated to them : when informed of it, 
 Hiey came down from the walls in silence, and stood for some time in the street 
 in a body ; and at last went off one by one, with every mark of regret for the 
 fate of their masters, whose business had supported them and their families for 
 several years. However, to the great joy of every good man, the Messrs Adam 
 resumed their works on the 26th.' — Scots Magazine, June 1772.] 
 
42 MEMOIRS OF A BANKING-HOUSE. 
 
 Alexander Fordyce,* and of all the confusion that had ensued 
 among the Scotch merchants connected with the circulation of 
 bills, whose fate was easily foreseen, as well as the eflfect of it on 
 the houses in Edinburgh engaged in the same ruinous mode of 
 supporting their credit. As expected, the bank of Douglas, 
 Heron, & Co.,f and the houses of Fordyce, Malcolm, & Co., 
 Andrew Sinclair & Co., Arbuthnot and Guthrie, William Alexander 
 and Sons, Johnstone and Smith, Gibson and Balfour, Anthony 
 Ferguson, and WilUam Hogg, junior, all stopped payment in the 
 
 * [' The accounts of the failure of Neale, James, Fordyce, and Downe, arrived 
 at Edinburgh on Friday afternoon, June 12th, by a gentleman who posted from 
 London in forty-three hours.' — Scots Magazine, June 1772.] 
 
 + [Tlie editor has elsewhere given the following account of this bank : 
 ' The personage in Marryat's novel of Peter Simple who believed that every- 
 thing now happening had happened before, would have had a support to his 
 notion in the history of Scotch banking. The Western Bank was prefigured 
 eighty-five years ago by the bank of Douglas, Heron, & Co., of which the head- 
 office was placed at Ayr. It had been set up in 1769 with £96,000, subscribed 
 by about a hundred and forty individuals, mostly unacquainted with banking 
 business. It made notes without limit, and to get them into circulation, was 
 unusually liberal in discounting bills. No poor struggling tradesman or farmer 
 was refused credit to help him on. Men who applied to get their difficulties 
 resolved by credit with Douglas, Heron, & Co., came away astounded by the 
 unwonted facility they had met with, and laughingly declaring that such 
 a concern could not go on long. It was thought to be at once a good business 
 for the bank and a useful thing for the countiy. Of course an artificial stimu- 
 lus was given to trade and to expenditure, and for a time all seemed going on 
 well. But in June 1772, the great banking failure of Mr Fordyce created a 
 general panic. A run on Douglas, Heron, & Co. commenced, and in a few days 
 they found it necessaiy to suspend payments in specie, and to propose instead 
 making their notes carry interest. Then there were meetings of well-meaning 
 but ignorant gentlemen to express confidence in the bank, and offer to continue 
 taking its notes, exactly as there were in the case of the Western. Leading 
 shareholders, including the Duke of Queensberry and the Duke of Buccleuch, 
 went to the Bank of England to ask assistance, precisely as the Western direc- 
 tors went to the Edinburgh banks ; but the Bank of England, having already 
 Douglas, Heron, & Co.'s notes to the extent of £150,000, was indisposed to trust 
 them any further. There was next — exactly as we have seen in the recent 
 case — a burst of indignation from the embarrassed bank and its friends against 
 the Bank of England, without a word of acknowledgment of the gi'eat sins of 
 the embarrassed bank itself, or of the justice of the punishment it was now 
 sufiering. This lasted till, in the course of a few months, it was discovered that 
 there was a hopeless gulf to be filled up ; and Douglas, Heron, & Co. closed 
 business a little after the end of their third year, leaving an amount of destruc- 
 tion in their wake such as Scotland had not experienced since the wreck of the 
 Darien Expedition. It is said that a large proportion of the land of the county 
 of Ayr changed hands in consequence. For the remainder of their lives, its share- 
 holders were never done with paying ; and we have been told that their families, 
 in some instances, did not get their accounts satisfactorily closed till some time 
 after the passing of the Heform Act, at the distance of upwards of sixty years 
 from the calamity !'] 
 
MEMOIRS OF A BANKING-HOUSE. 43 
 
 course of a few days,* and the alarm in Edinburgh and the neigh- 
 bourhood became very general. 
 
 Besides the Bank of Scotland, Royal Bank, and British Linen 
 Company, which were established by public authority, the only 
 private companies that continued solvent were Mansfield, Hunter, 
 & Co., William Cuming and Sons, and our own. On Monday a 
 very smart demand for money took place on us all, just as had 
 happened the preceding week in London. This was a new and an 
 unexpected circumstance, for nothing of the kind had occurred in 
 consequence of the failure of Messrs Fairhohne in 1764, or of 
 Messrs Hogg and Son in 1769. But as neither our house nor any 
 of those others had been engaged in the circulation carried on 
 from Scotland, and were sufficiently provided with funds to answer 
 promptly all the demands that were made on them, the panic 
 abated after two o'clock on Monday, and the public confidence 
 in their solidity was restored, and even increased by this proof of 
 their having conducted their business on a rational and provident 
 plan, and avoided those speculations and that mismanagement 
 which had proved so fatal to their neighbours. Mr Herries, how- 
 ever, who conducted the business of our house in London, being 
 
 * It was much taken notice of ca the time that, only a few days previous to 
 these extensive bankniptcies, a total alteration had been made by an act of par- 
 liament on the bankrupt laws of Scotland. As the law stood previously, any 
 creditor, laying an arrestment on the effects of his debtor, secured to himself the 
 value of the property thus attached, to the exclusion of all the rest of the credi- 
 tors, even although arrestments should immediately afterwards be laid on the 
 same effects by any other creditor. By this means a debtor had it in his power 
 to give a preference to any creditor whom he chose to favour, by informing him 
 privately of the situation of his affairs, which enabled that creditor to secure 
 himself by arrestment to the prejudice of all the rest. And, even without sup- 
 posing anything unfair of that sort, whenever a person declared himself bank- 
 rupt, those creditors who were on the spot had it in their power to gain a 
 preference before those creditors who lived at a distance. The Court of Session 
 had attempted to remedy this abuse by an order of court in the year 1754, 
 declaring that all arrestments laid within thirty days after the bankruptcy should 
 be of equal force ; but this order was only made for seven years, and at the end 
 of that period was not renewed by the Court of Session, probably because they 
 did not tliink they had the power to make so great an alteration on the common 
 law by their own authority merely. The abolishing of this iniquitous system, 
 and the procuring an act of parliament to be passed for an equal distribution 
 of the effects of debtors among their creditors, was the work of Mr (now Sir) 
 James Montgomery, at that time Lord Advocate for Scotland, and after- 
 wards Lord Chief Baron of Exchequer. After consulting with the principal 
 merchants of Edinburgh and Glasgow, an act of parliament was framed which 
 received the royal assent in June 1772, and the salutary effects of it were very 
 speedily proved, on occasion of the numerous bankruptcies which now took 
 place. Had the old system been still in force, the expense and confusion arising 
 from the multiplicity of arrestments and law proceedings must have been 
 altogether inconceivable. 
 
44 MEMOIRS OF A BANKING-HOUSE. 
 
 uncertain of what situation things might be in at Edinburgh, or 
 ■what support and assistance we might stand in need of, thought 
 it a prudent measure to hasten a visit which he had at any rate 
 resolved to pay to Scotland about this time, and to bring down 
 with him a sum of specie. He accordingly arrived in Edinburgh 
 about the middle of the week, by which time the run on our house 
 was over. The amount of specie which he brought was but 
 inconsiderable — only between £2000 and £3000 — ^yet this, being, 
 as usual, magnified by common report into a mighty sum, was not 
 without its use in fortifying the credit and increasing the confi- 
 dence of the public in the stability of our house. 
 
 On this occasion Glasgow suffered less, and experienced fewer 
 difficulties, than Edinburgh. For although many of the consider- 
 able merchants were put to inconvenience by the shock which 
 dbmmercial credit in general sustained, only one house, that of 
 Simson, Baird, & Co., stopped payment. Previous to this event 
 of the bankruptcies of June 1772, a sort of contest had taken 
 place between the merchants of Glasgow and Mr Herries, as agent 
 for the Farmers-general, about the price of tobacco. The merchants, 
 believing that the Farmers-general could be nowhere else supplied, 
 and must give the price they demanded, would not accept of what 
 the French offered, which was somewhat less. When the scarcity 
 of money, however, in consequence of these bankruptcies, came to 
 be felt at Glasgow, the merchants began to relax a little, and Mr 
 Herries, on the other hand, prevailed on the Farmers-general 
 to make a small advance in their price, to increase the quantity of 
 their order for purchase, and somewhat to shorten theu- date of 
 payment. All three circumstances were very convenient for, and 
 agreeable to, the merchants, so that at once Mr Herries and they 
 came to an understanding, and he went from Edinburgh to Glas- 
 gow to regulate his purchases, in which journey I accompanied 
 him. As we thus went on a very agreeable errand, we were 
 received with open arms, and entertained in the most sumptuous 
 manner by the merchants during the time that we remained 
 there. 
 
 Although our house had always been on the most friendly foot- 
 ing with the unfortunate houses which had now failed ; yet, having 
 never been engaged with them in the business of their circulation 
 on London, we had no other connection with their affairs than by 
 being accidentally holders of a few of the drafts on London of 
 Arbuthnot and Guthrie, and of Fordyce, Malcolm, & Co., so that 
 our whole loss by the bankruptcies of the year 1772 was but a 
 trifle. 
 
MEMOIRS OF A BANKING-HOUSE. 45 
 
 Hitherto, notwithstanding our quarrel with Messrs Coutts, the 
 firm of John Coutts & Co., by which the house was designated 
 in 1763, had still continued to be used ; but as Messrs Coutts had 
 it in their power to require us to rehnquish it when they pleased, 
 it was thought better that we should do so of our own accord. 
 We therefore changed it, at the 1st January 1773, to that of Sir 
 W. Forbes, J. Hunter, & Co., by which name the house has ever 
 since been carried on. 
 
 The cordiality which we had recently experienced from the 
 Glasgow gentlemen did not long continue, and differences soon 
 arose between them and us, originating from the following circum- 
 stance : — There were certain advantages in the unpacking, weigh- 
 ing, repacking, and dehvery of their tobacco, which the merchants 
 had been accustomed to enjoy, and which they insisted were per- 
 fectly fair, but which Mr Herries affirmed, on the other hand, 
 were improper, and in consequence would not allow to be practised, 
 demanding that the mode practised in the port of London, which 
 was more favourable for the buyer, should be the rule followed at 
 Glasgow. This occasioned much altercation between them and 
 us, and Mr Hunter, who managed the department of the tobacco 
 purchases, did not always take the best method of smoothing 
 matters. In this Mr Herries and Mr Hunter, I am perfectly 
 satisfied, thought themselves in the right, believing that they were 
 merely protecting the interests of our constituents, the Farmers- 
 general. But, nevertheless, it produced the disagreeable conse- 
 quence of making us unpopular at Glasgow, and rendered the 
 transaction of our business there more difficult than it otherwise 
 would have been. It was not long before the whole business took 
 a new and an unexpected turn. Early in- the year 1774, a new 
 struggle took place between Mr Herries and the merchants of 
 Glasgow, who held at that time considerable quantities of tobacco 
 on hand, about a small difference in the price between what he 
 offered and what they demanded. Things continued in this 
 situation till the beginning of the year 1775, when, instead of 
 improving, they grew worse, owing to the disputes which had by 
 that time begun to take place between Great Britain and the 
 colonies of America, and which threatened to put a stop to all 
 coiomercial intercourse between the two countries. The merchants 
 instantly took the alarm, and began to rise iu their demands. Mr 
 (now Sir Robert) Herries,* who thought, as many others did at that 
 
 * In the month of February 1774, Mr Hemes had procured the honour of 
 knighthood, thinking it might give him additional consequence in the eyes of 
 the Farmers-general. 
 
46 MEMOIBS OF A BANKING-HOUSE. 
 
 time, that the dispute between the mother country and the colonies 
 would be amicably adjusted, and that the prices of tobacco would 
 ere long return to their former level, advised the Farmers-general 
 to wait a little rather than yield to the increase demanded. All 
 this while the Farmers-general continued by their correspondence 
 to express themselves perfectly satisfied with Sir Robert's conduct, 
 and seemed to repose in him the most impUcit confidence. They 
 had intrusted to him alone their whole commissions to a great 
 amount for purchasing in Scotland ; and they seemed determined 
 to employ no other agent there. While he was carrying on the 
 most friendly and confidential correspondence, not only with them 
 but individually with Mr Paulze, their president, who was sup- 
 posed to have the greatest weight at their board, Mr Samuel 
 Martin of Whitehaven, who had formerly been employed in pur- 
 chasing for the French, made his appearance at Glasgow in the 
 end of February 1775, and shewed an ostensible commission from 
 the Farmers-general for a large purchase, in consequence of which 
 he concluded a bargain for six thousand hogsheads. 
 
 When Sir Robert was informed of this transaction, he replied 
 that he, was certain Mr Martin had no commission from France; 
 that the purchase, therefore, had been made on speculation, and 
 that not an ounce of that tobacco would go to France. On his 
 being again assured that Mr Martin had actually shewn at Glasgow 
 a commission to purchase, signed by Mr Paulze, the president, 
 and seven of the Farmers-general, Sir Robert communicated to us 
 the following very curious anecdote as the ground of his so confi- 
 dently believing that Mr Martin had no authority for what he had 
 done. It seems that a very short time before, on opening one of 
 Mr Paulze's private lettfers. Sir Robert had found enclosed in it a 
 letter from Paulze to Mr Martin, consisting of a few lines, in which 
 the president informed Mr Martin that he had received his letter, 
 oflFering his services to purchase tobacco for France, but which he 
 must decline accepting, as the Farmers-general were determined 
 not to employ any other agent than Sir Robert Herries. By the 
 following post Paulze wrote to Sir Robert that he suspected he 
 had folded up in the packet to him by mistake the letter to Mr 
 Martin, but which Sir Robert might put in the fire without for- 
 warding it, as Mr Paulze said he had written and despatched 
 another letter to Mr Martin. No wonder, therefore, that Sir 
 Robert was so very positive that Mr Martin was acting without 
 authority. But, on its being stated to him that Mr Martin had 
 actually shewn his commission, the date of which was specified. 
 Sir Robert resolved to send his brother Charles over to Paris to 
 
MEMOIES OP A EANKING-HOUSE. 47 
 
 learn the real truth of the matter. On the return of the latter, 
 after remaining but a single day at Paris, Sir Robert was thunder- 
 struck to learn that he had been completely deceived by Mr 
 Paulze and the Farmers-general ; that the commission to Mr 
 Martin was real; and that his purchase of the six thousand hogs- 
 heads had been approved of. At their interview, Mr Paulze 
 informed Mr Herries that, for some time past, he had become 
 suspicious with regard to Sir Robert^ management, who, he acknow- 
 ledged, had ably served them during the first three years. But 
 siace that period they had entertained the belief that Sir Robert 
 was engaged in speculations in tobacco on his own account — for 
 which, to be sure, some transactions of Sir Robert's had given a 
 colour — and that he had all the while been amusing the Farmers- 
 general when advising them to be in no hurry to purchase, expect- 
 ing that prices would go lower, but in fact with a view of dispos- 
 ing of his own purchases to them at an advanced price. That he 
 had purposely redoubled his marks of confidence in Sir Robert by 
 seeming to approve of his conduct, in order that he might not 
 interfere with Mr Martin, to whose proposals they had listened, in 
 order to obtain that tobacco which Sir Robert did not seem dis- 
 posed to procure for them. He concluded by saying that Sir 
 Robert's only chance of retaining the business of the Farmers- 
 general, was by executing the orders of which he was still in pos- 
 session on suitable terms.* 
 
 On hearing this detail from his brother, Sir Robert found him- 
 self most awkwardly situated. He saw that he had trusted too 
 much to the strength of his influence with Mr Paulze, with whom 
 he had carried on a close and confidential private correspondence, 
 and whom he wished to interest in some private speculations for 
 their joint account, by purchasing tobacco in America to be after- 
 wards sold to France, which, however, never took effect. By this 
 correspondence, I am well persuaded. Sir Robert did not think he 
 was guilty of any breach of his duty as acting under a commission 
 from the Farmers-general ; but he certainly acted in that respect 
 
 * One of these marks of confidence was the fictitious letter to Mr Mi»rtin 
 above mentioned, which Sir Eohert had fovmd as if it had slipped by accident 
 into Panlze's private dispatch, and it was no wonder if he was the dupe of such 
 a refined artifice. Tliis circumstance of Mr Martin's commission from the 
 Farmers-general, the reality of which Mr Hunter, on Sir Robert's confident 
 assertions, had too warmly denied in conversation with Mr Ronald Crawfurd of 
 Glasgow, had nearly occasioned a duel, Mr Crawfurd having sent Mr Hunter a 
 challenge, which he accepted, and a meeting was appointed to take place 
 between them in London. As the affair took air, our friend Mr Colin Dunlop 
 of Glasgow wrote to me of it, on which I went to Glasgow and was fortunate 
 enough to get the matter amicably accommodated. 
 
48 MEMOIRS OP A BANKING-HOUSE. 
 
 not with his usual pnidence and discretion. On the other hand, 
 he had rendered himself extremely unpopular with the merchants 
 of Glasgow, who accused him of acting towards them with more 
 rigour, and endeavouring to lower their prices more than his duty 
 to his constituents, as their factor, required. They also plainly 
 accused him of wishing to deceive them by holding himself forth 
 as solely possessed of the orders of the Farmers-general, with a view 
 of beating down their market, at the very time that Mr Martin 
 had actually a commission from them for a large purchase. Sir 
 Robert, therefore, felt himself ill off at all hands, and it'is scarcely 
 possible to suppose any person's situation in trade, with upright 
 intentions, more irksome and unpleasant than his was at that 
 period. 
 
 By this time the news from America of the inflammatory dispo- 
 sition of the colonists, and the prospect of a rupture between the 
 two countries, had made the holders of tobacco raise their prices, 
 not only at Glasgow, but at London and the outports of England; 
 so that Sir Robert, who was now anxious to make a still -further 
 purchase beyond what he had already secured, although without 
 any explicit order from the Farmers-general, was obliged to give so 
 very high terms for what he got, that the Farmers-general seemed 
 not inclined to take the goods off his hands. Had they persisted 
 in this resolution — which, however, they did not do — it would have 
 been rather for the benefit of the house than otherwise, because 
 tobaccos still continued to rise in price, and those which we held 
 would have ultimately yielded a considerable profit. 
 
 Sir Robert soon after went over to Paris, and from conversation 
 with Mr Paulze was induced to believe that he had succeeded 
 completely in explaining his past conduct, so as to be reinstated in 
 the favourable opinion of the Farmers-general ; and, in fact, he still 
 occasionally made purchases on their account for a couple of years 
 after this fracas from the merchants in Britain, who were still 
 possessed of considerable quantities of tobacco, which they had 
 imported before the disputes with America had come to a crisis. 
 At length the rencounter between the British troops and the 
 Americans at Lexington, on 19th April 1775, which was the first 
 bloodshed in the quarrel, and afterwards the battle of Bunker's 
 Hill on the 17th June of that year, gave a commencement to the 
 war, which terminated ia the independency of America, since 
 which time France has been supplied with tobacco from that 
 country, without the intervention of Great Britain. 
 
 This dispute between Sir Robert and the Farmers-general may be 
 said to have produced another and yet more important effect with 
 
MEMOIRS OF A BANKING-HOUSE. 49 
 
 regard to him and his partners, for it ultimately led to the separa- 
 tion of the two houses. In order to explain this, it is necessary to 
 mention that it was the practice of the Farmers-general to make 
 anticipated remittances to the house in London, which, therefore, 
 had always a very considerable sum of their money in hand. This 
 had induced Sir Robert, trusting to the permanency of the com- 
 mission, to engage, for the sake of greater profit, in mercantile 
 adventures of various sorts — brandies, hops, rice, tobacco, &c. — 
 to an extent beyond what he would otherwise have done, instead of 
 employing the money in discounts of bills, or India bonds, or navy 
 or exchequer bills, which, while they bore a moderate interest in 
 the meantime, could always be commanded on a short notice on an 
 emergency. 
 
 When the displeasure of the Farmers-general took place, and it 
 seemed by no means improbable that they would close the account 
 entirely, it became a serious consideration how funds would be pro- 
 vided for the repayment of the balance to them, and how the 
 depending speculations in trade could be supported without the 
 facility which their remittances afforded. This consideration gave 
 no small alarm to the partners at London, as well as to us at 
 Edinburgh, although Sir Robert himself professed to be noway 
 uneasy on that score, and as the Farmers-general continued to carry 
 on their correspondence much as formerly, no actual inconvenience 
 did happen. 
 
 So very disagreeable, however, had it been to Mr Hunter 
 and me, to see the house at London in this manner departing 
 from their original plan of commission business, and engaging 
 in extensive mercantile speculations, that we thought it abso- 
 lutely necessary to establish some rules fdr its future conduct ; 
 and for that purpose the present time seemed the most proper of 
 any, when the contract of copartnery was aboiit to be renewed. 
 It had been fixed for twelve years from its commencement, on the 
 1st February 1763, and therefore it expired on the same day in 
 1775 ; but it had been agreed among the parties that the com- 
 mencement of the new copartnery should be postponed for another 
 year, at which time Sir Robert's brothers, Charles and William 
 Henries, and his brother-in-law, George Henderson, who had 
 hitherto only enjoyed a certain share of the profits of the house 
 by virtue of the agreement of the year 1771, were to be declared 
 partners to the world, and sign the new contract as such. In 
 order to arrange the terms of the new contract with Sir Robert, Mr 
 Hunter had gone to London, and in consequence of what he and 
 I had previously agreed on, it was proposed that certain regulations 
 
go MEMOIRS OF A BANKINO-HOUSE. 
 
 stould be inserted in. it, or in by-laws, for tie future conduct of 
 tbe business of the London house. This produced a very unplea- 
 sant correspondence between Mr Hunter and me on the one hand, 
 and Sir Robert on the other, whose pride was hurt by the idea of 
 having rules prescribed to him by his junior partners, while he 
 had hitherto been accustomed to have the principal, indeed I may 
 say the sole, direction without control. The xineasiness, however, 
 which we had suffered from the extensive engagements the London 
 house had embarked in, on the expectation that the funds of the 
 Farmers-general would be continued, and the chance that those 
 fimds might be speedily withdrawn, had made so deep an impres- 
 sion on our minds, that we steadily adhered to our purpose. Sir 
 Robert, on the other hand, insisted that his past conduct had not 
 been so devoid of prudence or deserving of censure as to require 
 stricter stipulations than formerly. At length, when neither side 
 seemed disposed to give up their opinion, Mr Hunter and I 
 received a letter signed by Sir Robert, his brothers Charles and 
 William, and Mr Henderson, the purport of which was that, as 
 mutual confidence seemed to be withdrawn, and a contrariety of 
 sentiments to have taken place, it would be best to separate our 
 respective interests, with which view Sir Robert's brothers pro- 
 posed to relinquish entirely to Mr Hunter and me the house at 
 Edinburgh, while we, on the other hand, should relinquish to 
 them the house at London. To this proposition we most readily 
 acceded, and at the same time, wishing to make the house at 
 Edinburgh our sole object thenceforward, we also relinquished to 
 the other partners the share which we held in the banking-house 
 in St James's Street, London. 
 
 In our reply to Sir Robert's letter, accepting of his proposal of a 
 separation of the two houses of London and Edinburgh, and 
 informing him of our intention to resign also our shares in the 
 establishment in St James's Street, we requested him to communi- 
 cate this to Mr Herries, senior, and Mr Hammersley, the two act- 
 ing partners in the latter company ; thinking it most delicate to 
 leave Sir Robert to explain to these gentlemen the causes which 
 had produced this resolution on our parts. Sir Robert, however, 
 had merely informed them of the fact, without any explanation. 
 This produced a letter to Mr Hunter and me from Mr Herries, 
 senior, written in the most friendly style, expressing his surprise 
 and regret at our resolution of withdrawing from the Exchange 
 Banking Company, of the cause of which he seemed perfectly 
 ignorant. 
 
 To this letter I wrote at considerable length, explaining our 
 
MEMOIRS OP A BANKING-HOUSE. 51 
 
 reasons for the measure ; and as it gives a detail of our situation 
 with Sir Kobert Herries, written at the time it happened, I think 
 a few excerpts from it may not be without interest. 
 
 ' 20th September 1775. 
 
 'Dear Sir — ^Your very obliging letter of the 11th was for- 
 warded to me to Aberdeenshire, whither I came lately for a little 
 relaxation at this dead season of the year. This has occasioned 
 some delay in replying to it, which I hope you will be kind 
 enough to overlook. 
 
 ' In a letter which Mr Hunter and I wrote to Sir Robert Herries the 
 10th ult., on receiving his ultimate resolution in regard to the two 
 houses, we asked the favour of him to explain to you and Mr 
 Hammersley the causes which had brought about a separation. 
 But, as you say Sir Robert has been silent in regard to the 
 reasons of disuniting the two houses at London and Edinburgh, I 
 shall beg leave to recapitulate them to you and Mr Hammersley 
 in as few words as possible. 
 
 ' You are no strangers, I believe, to what passed in regard to 
 the tobacco-commission in January and February last. The 
 hazard there seemed to be of Sir Robert's losing the friendship 
 and orders of the Farmers-general at that time, first led us to con- 
 sider seriously what might be the consequences, in the way of 
 business, should that event take place. On a careful retrospec- 
 tion, we were vexed to find that, by reposing too implicit a con- 
 fidence in the permanency of the friendship of that great company, 
 and allured by the temptation of a very large deposit from them, 
 of which there was no reason before that time to doubt the con- 
 tinuance, the house at London had been tempted to go greater 
 lengths in the way of commerce and speculation than the natural 
 powers of the house could prudently admit of, or than we can now 
 approve. Very fortunately for us, the Farmers-general made no 
 change in their system of remittances — although it seems it was 
 only carried by a single vote that they did not then at once shut 
 up accounts with us — and the most of the engagements entered 
 into have since been brought to a successful period. But the 
 embarrassment we had been in, and the anxiety of mind we had 
 all sufiered, for fear of any disgrace on the credit of the house, led 
 Mr Hunter and me earnestly to wish that such a system might be 
 formed and adhered to, as should efiiectually save us from any 
 such disagreeable contingency for the fiiture. "We considered that 
 the two houses had yielded most comfortable profits for many 
 years before we enjoyed the French commission, and we saw no 
 
52 MEMOIRS OF A BANKING-HOUSE. 
 
 reason to despair of a like success by a continuance of the same 
 prudent management. We could not but regard the natural 
 business of the two houses as more permanent, and therefore more 
 worth attending to, though, perhaps, less lucrative in the mean- 
 time than the orders or the cash of the Farmers-general, which 
 last we therefore proposed should never be employed in trade, or 
 in any shape where it could not readily be commanded, if the 
 French gentlemen should withdraw their friendship. But, above 
 all, we had in view the nature of your establishment in St James's 
 Street and of ours at Edinburgh. These, as banking-houses 
 dependent on the good opinion of the public, could not but be 
 greatly affected by appearances at Jeffrey's Square of dipping too 
 deep in extensive engagements, to which the private fortunes of 
 the partners could not be supposed in any degree equal. We 
 were even assured, in the most friendly manner, by those who 
 wished us well, that we were already in the mouths of the world 
 on account of what had passed, and that the utmost caution was 
 necessary for the future to preserve the credit which we had 
 hitherto enjoyed. All these reasons moved us, when we were 
 framing our new contract, to propose to Sir Robert a plan of 
 operations for the future, founded on that part of past experience 
 which had proved the basis of our present valuable natural busi- 
 ness, as well as guided by what we could not but think had been 
 in many respects a too extensive though profitable class of transac- 
 tions. Sir Robert thought it improper that rules should be 
 imposed on him by partners inferior in years, experience, and for- 
 tune. We most readily admit we are by no means his equals in 
 any of these particulars. But where men are independent, I 
 humbly conceive it to be the very essence of a copartnery, that 
 each member may suggest whatever he thinks will be most con- 
 ducive to the general good, provided he do it with temper and 
 good breeding. As to the opinion of the others, the world might, 
 no doubt, form ideas unfavourable to us without any just grounds. 
 But as, from the nature of our business of bankers, we are almost 
 entirely dependent on the regard and confidence of the public, it 
 ought to be our duty to study and comply with the prejudices, 
 whether well or ill founded, of those who are pleased to employ 
 us. In the whole of the business we can safely say that we had 
 his interest at heart along with our own, and we think we are 
 warranted in the assertion when it is considered that the credit of 
 the house at Edinburgh was at stake, in which he is equally 
 interested with us. If the reputation of caution should be lost, 
 which the partners had gained by a prudent attention to their 
 
MEMOIRS OP A BANKING-HOUSE. 53 
 
 staple business, the house at Edinburgh could not sufifer in that 
 respect without the house at London being at the same time most 
 essentially injured by it, as the two were so intimately connected 
 together. 
 
 ' In regard to the house in St James's Street, I have ever con- 
 sidered that establishment as wisely planned, and give me leave to 
 add, without any flattery to you and the other acting partners, as 
 conducted with a degree of assiduity and attention that have 
 already surmounted the great obstacles which were always fore- 
 seen and must constantly attend every plan of that kind. We 
 had, therefore, every reason to be satisfied with our situation in 
 regard to it. But when we found that our original connection in 
 London was to come to a period, we naturally thought of confining 
 our views solely to the business of Edinburgh. To that considera- 
 tion we were contented to sacrifice the prospects of increasing 
 advantage which on the best ground you may hope to reap from 
 the Banking Company. I have endeavoured to give you a detail 
 of what has passed with truth and sincerity. Through the whole 
 of our correspondence with Sir Robert on this occasion, I have 
 acted according to the best of my judgment ; and on looking back 
 on all that I have written or proposed to him, I am happy in not 
 finding anything that I could wish to alter.' 
 
 Thus ended all connection of partnership between Sir Robert 
 and us — a measure the wisdom of which, with regard to the house 
 at Edinburgh, the event has fully justified. But, although a sepa- 
 ration of interests had thus been resolved on, as we had hitherto 
 lived in the utmost degree of friendship and intimacy, we were all 
 equally desirous that the separation should take place with good 
 humour and cordiality, which our mutual endeavours were suc- 
 cessfully exerted to preserve throughout the whole of the trans- 
 action. The fundamental principles, indeed, whence the separa- 
 tion took its rise, prevented us from committing to the house in 
 London our exchange correspondence, which we judged it expedi- 
 ent to confide to some banking-house of distinguished eminence ; 
 yet we resolved to throw every advantage which we properly 
 could in the way of the house in the city, as well as of the bank- 
 ing-house in St James's Street, by such parts of our correspondence 
 as we could with propriety put under their charge, and to which 
 rule of conduct we have ever since adhered. 
 
 Mr Hunter and I, being thus left sole proprietors of the house 
 at Edinburgh, judged it expedient to assume an associate to aid 
 us in conducting the business, as well as to guard against the 
 
Si MEMOIKS OF A BANKING-HOUSE. 
 
 inconvenience that might arise in the event of either his or my 
 death. And we were most fortunate in having at that time in the 
 counting-house a person of great merit, Mr James Bartlet, a native 
 of Aberdeen, who had been originally bred to business with Mr 
 David Gregorie of Dunkirk. Mr Hunter and I had received him 
 as a clerk, at the solicitation of our particular friend, and his 
 relation, the late Dr Gregory. 
 
 In that situation he had been with us several years, during 
 which period we had had the strongest proofs of his abilities 
 and steadiness as a man of business, as well as of his good temper 
 and agreeable manners as a gentleman. We had, therefore, no 
 hesitation in assuming him as a partner, and the event fully justi- 
 fied our choice, for he proved himself not only an able associate in 
 business, but an approved friend and most pleasant companion to 
 the last hour of his life. 
 
 By our contract of copartnery, which was to commence the 1st 
 January 1776, and to last nine years, the shares were fixed as 
 follow : Sir William Forbes, 11 ; Mr Hunter, 11 j Mr Bartlet, 2 
 — ^in all, 24 shares. 
 
 The partners, having now no object of business but that of the 
 house at Edinburgh, devoted to it their whole time and attention. 
 And the world seemed to give their approbation of the change 
 that had taken place, and of the system w^e had adopted, by the 
 increase of our business and the high degree of credit and estima- 
 tion at which we arrived. These circumstances were the more 
 flattering to us, because the nation was far from being in a state of 
 tranquillity, either in a political or commercial point of view. 
 Hostilities with America had actually taken place, with various 
 success on the part of this country, until General Burgojme's 
 unprosperous campaign of 1777, and the fatal event of his army 
 being obliged to lay down their arms, induced the French to engage 
 in the war as allies of America, with a view of humbling the pride 
 and diminishing the power of Great Britain. That event pro- 
 duced an almost instantaneous effect on the money transactions of 
 Scotland. The French rescript, announcing their alliance with 
 America, was delivered at St James's on the 24th April 1778 ; and 
 from that day we began to experience a drain of the money lodged 
 with us on deposit, week after week, and month after month, until 
 November of that year. 
 
 By prudent management we had been able to collect our funds 
 about us, so as always to be fully prepared for the continued 
 demand, and from the month of November our deposits began 
 again to swell until they were as high as ever. Convinced, 
 
MEMOIRS OF A BANKING-HOUSE. 55 
 
 however, of the necessity of having our funds as much as possible 
 under our command and within our reach, in case of any emer- 
 gency, we kept a considerable sum always invested in Navy bills, 
 Exchequer bills, and Ordnance debentures, which, while they 
 yielded better than common interest, were not subject to much 
 fluctuation of value, and could always be converted into money on 
 the shortest notice. We even went a step further, and ventured 
 to invest some money in the public funds. We did this, however, 
 very gradually, and merely when we found a larger sum in our 
 hands than we could properly employ in discounting bills, or 
 making advances to our correspondents at home. And in making 
 this investment we were always scrupulously attentive to keep so 
 considerable a sum employed in those floating securities I have 
 mentioned, as we judged amply sufficient to answer for every 
 occasion we might have for money, even on an emergency. The 
 public funds were at this time at a low price,* and there was every 
 probability, as had happened at the conclusion of former wars, 
 that they would rise considerably in value on the return of peace. 
 The fund which we considered the most desirable, was the stock 
 of the Bank of England ; because, by holding a considerable sum 
 of it, we derived a certain degree of respectability at the bank, and 
 we had the chance of some advance in the price of that stock from 
 an increase of dividend, beyond its comparative value with other 
 govenunent securities. Such an investment, by merely affording 
 employment for our surplus funds, we considered as by no means 
 coming under the denomination of stock-jobbing, as we never pur- 
 chased a single shilling's worth but for money actually paid down, 
 nor even that, when we could otherwise employ the money with 
 safety and prudence, in the way of our natural business at home. 
 The event fully justified the wisdom of the system, the merit of 
 which is justly due to Mr Hunter ; for, soon after the close of the 
 war,f we disposed of as much of the stock as replaced the money 
 originally invested, and divided the rest among the partners, by 
 which means each of us added considerably to our private 
 fortunes. 
 
 Mr Hunter, too, by the successive deaths of four brothers of his 
 wife, had succeeded to her paternal estate of considerable value 
 in Galloway, on which occasion he assumed the name of Blair in 
 addition to his o>vn. 
 
 * [The three per cent, consols, which had heen ahout 90 at the close of the year 
 1774, were in STovemher 1778 so low as 63f . Bank-stock, which at the former 
 period was 144, had now sunk to 110.] 
 
 f [In January 1783, immediately after the peace, bank-stock had recovered 
 to 122,] 
 
56 MEMOIRS OF A BANKING-HOUSE. 
 
 On the death of Sir Lawrence Dundas in the year 1781, Mr 
 Hunter Blair was elected member of parliament for the city of 
 Edinhm-gh, for which he was re-elected in 1784 ; and on account 
 of his spirited exertions for the improvement of the city, by the 
 plan of the South Bridge, while he filled the of&ce of Lord Provost, 
 he was, in the year 1786, created a baronet of Great Britain. As 
 an addition, also, to the respectability of our house, I had suc- 
 ceeded to the estate of Pitsligo by the death of the Honourable Mr 
 Forbes, on the 30th August 1781.* 
 
 In 1778 an event happened in the counting-house which is 
 worth recording on account of some circumstances attending it. 
 We had, some time before, taken as an apprentice a lad of the 
 name of "Watt, son of a decent honest man, a merchant tailor. 
 He went through the usual routine of the counting-house, and 
 among other parts of his duty, he had been employed as one of the 
 clerks who exchange the notes of the country banks. It is our 
 practice, after the notes kre brought from the banks, that two or 
 three of the clerks are employed to arrange and pack them up, to 
 be sent to the country ; and as the lads are all together in one room 
 when employed in this business, they are considered to be thus a 
 check upon one another. Watt had gone on tolerably well in the 
 general discharge of his duty, except that he was sometimes idle 
 and absent, for which I had more than once reproved him ; but 
 we had no reason to suspect anything essentially wrong in his 
 conduct. It afterwards appeared, however, that he had fallen 
 into bad company, both male and female, which had led him into 
 expenses, to which the slender pittance he received either from his 
 father or from us was very inadequate, and to support these 
 expenses he was tempted into dishonesty. At first he contrived 
 merely to secrete a bank-note or two, which passed as a mistake 
 in the hurry of making such large exchanges at the banks, which 
 must sometimes happen even with the most careful. At length 
 he was tempted to commit a theft of extraordinary magnitude. 
 He had been employed as usual in this exchange business on a 
 Monday, and next morning he did not make his appearance at the 
 counting-house. On sending to his lodgings, we were told he had 
 not been at home all night, and neither that day nor the next 
 could we learn any tidings of him ; still we had no suspicion of 
 anything wrong until Thursday morning, when a clerk of Messrs 
 
 * [Sir WiUiam succeeded to this estate as grandson of tlie Honourable Mary- 
 Forties, sister of Alexander Lord Forbes of Pitsligo, a venerable nobleman who 
 had befriended the Prince in the affair of 1745, and after whose forfeiture his 
 son, the Honourable John Forbes, had bought back part of the family property, 
 being that which Sir 'William now inherited.] 
 
MEMOIRS OP A BANKING-HOUSE. 57 
 
 Hunter &, Co. arrived from Ayr, and informed us that the parcel 
 of notes which had been taken up at the bank on Monday, and 
 sent to Ayr the day following, on being opened, was found short of 
 the sum it was said to contain by upwards of £1200, while the 
 external bulk was made to appear adequate by the inside being 
 filled up with waste paper. It instantly occurred to Messrs 
 Hunter <fe Go. that we had been robbed by the clerk intrusted to 
 make up the parcels, and in consequence they despatched one of 
 their clerks to give us notice of the state in which the parcel had 
 been found. Watt having disappeared immediately after the 
 notes had been packed up, there seemed no room to doubt that it 
 was he who had made off with the money. The first thing we 
 did was to send round to the principal banking-houses to inquire 
 whether he had been calling for gold, and we learned that he had 
 gone to Messrs Mansfield & Co. on Monday evening and got a 
 bill at sight for .£1000 on their con-espondents, Messrs Farquhar, 
 Kinloch, and Son, which he had taken payable to an assumed 
 name. We further learned that a young man, who answered to 
 his description, had gone in the coach which set out for London 
 early on Tuesday morning, and it thus seemed clear that he had 
 gone to London and carried the property along with him. It 
 was therefore resolved that our partner, Mr Bartlet, should go in 
 search of him, and he accordingly set out at one o'clock on 
 Thursday; and as the weather was fine, and the roads excellent 
 at that season, he made such great despatch, notwithstanding his 
 stopping at Newcastle for two hours to make inquiries, and again 
 some time at York, that he performed the whole journey in little 
 more than forty hours. He learned at York that the person who 
 had come in the stage-coach fi-om Edinburgh had stopped there all 
 night on Wednesday, and had even gone to the play. This, to be 
 sure, did not look very like one who was flying the country ; but 
 his person so well answered the description, that Mr Bartlet 
 pushed on and arrived in London between six and seven o'clock 
 on Saturday morning. He went directly to Sir John Fielding's 
 office in Bow Street, where, on telling his errand, a couple of 
 officers were appointed to assist him in his search. Their first 
 movement was to Messrs Kinloch and Sons, before breakfast, to 
 inquire regarding the bill of £1000, when they had the satisfac- 
 tion of finding that it had not been presented for payment. As it 
 was concluded that Watt would be there as soon as the usual 
 hours of business arrived, the Bow Street officers took their 
 station near the banking-house, and accordingly it so happened. 
 For, immediately afler breakfast, they perceived a stranger with 
 
58 MEMOIRS OF A BANKING-HOUSE. 
 
 a Scotch accent inquiring for Mr Kinloch's, whom they followed 
 into the counting-house ; and on his presenting the draft for pay- 
 ment, they instantly laid hold on him. On Mr Bartlet making 
 his appearance, the lad, without hesitation, confessed the whole 
 matter, and readily went along with Mr Bartlet and the officers to 
 the inn at which the coach had stopped, and where he had slept 
 the preceding night, where he shewed them his trunk in which 
 was the remainder of the money, except some which he had spent 
 hy the way. 
 
 Having thus successfully executed his commission, Mr Bartlet 
 thought of nothing hut to set out on his return home, after paying 
 the officers for their services,* which he did that afternoon, hring- 
 ing the lad along with him, who seemed to consider the business 
 as at an end, now that the property had been taken from him. 
 He therefore shewed no reluctance at the thought of accompanying 
 Mr Bartlet to Edinburgh, just as if nothing had happened. And, 
 indeed, it is not possible to conceive a greater trait of Mr Bartlet's 
 own simplicity of character than his performing the journey to 
 Scotland with the lad, as he would have done with any ordinary 
 fellow-traveller, except that he made him sleep in the same room 
 with him during three nights that they were on the road ; and Mr 
 Bartlet confessed it never once entered his head that the lad might 
 have robbed him of the money a second time, or at least might 
 have made his escape, had he been so disposed. No such thought, 
 however, appears to have entered the mind of either, for they 
 arrived at Edinburgh together on Tuesday before dinner, Mr 
 Bartlet bringing with him the first account of his own expedi- 
 tion, for he had outrun the common post. On Mr Bartlet's 
 arrival, a warrant was procured, and Watt was committed to jail. 
 It was at first our intention to have had him tried capitally for the 
 robbery; but on consulting lawyers of eminence, we were informed 
 that it was extremely doubtful whether it might not be deemed 
 merely a breach of trust, for which a capital punishment could not 
 be inflicted, and indeed, perhaps, no punishment at all. As a 
 trial with such a result might have done more harm than good, 
 after his lying some months in jail, we assented to a proposition 
 of his father's for his liberation, he engaging to send him privately 
 out of the kingdom, which was done accordingly. He went to 
 Carolina, where he got into a counting-house as a clerk, and 
 seemed to be doing very well, until happening to go to a billiard- 
 
 * Mr Bartlet gave a very lively description of these officers, who, he said, were 
 a couple of such blaekguard-looHng fellows, and their conversation such, that 
 he felt himself relieved when he got out of their company. 
 
MEMOIES OF A BANKING-HOUSB. 59 
 
 table, where he lost a large sum of money of his master's with 
 which he had been intrusted, he finished his career with a 
 pistol, when little more than twenty years of age. A sad memento 
 to all young people to avoid dissipation and improper company.* 
 
 A little before the period I am speaking of, being fully sensible 
 of the great merit of Mr Bartlet, Mr Hunter and I, of our own 
 accord, entered into a supplementary contract with him, by which 
 his interest in the house was increased, and from the 1st January 
 1779 the shares of the partners were declared to be : Sir "William 
 Forbes, 21 ; Mr Hunter, 21 ; Mr Bartlet, 6— in all, 48 shares. 
 
 Three years afterwards, we made a further change by the admis- 
 sion of my brother-in-law, Mr John Hay, as a partner.f In the 
 year 1774, at my request. Sir Robert Herries had agreed that he 
 should go to Spain, and serve an apprenticeship in his house at 
 Barcelona, where he continued till spring 1 776, when he returned 
 to London, and was received by Sir Robert into his house in the 
 city — from which by that time our separation had taken place — 
 and where, as well as in the banking-house in St James's Street, 
 he acted as a clerk till summer 1778, when he came to Edinburgh, 
 and entered our counting-house also on the footing of a confidential 
 clerk during three years. Having thus had ample experience of 
 his abilities and merit as a man of business on whom we might 
 repose the most implicit confidence, a new contract of copartnery 
 was formed, to commence from 1st January 1782, in which Mr 
 Hay was assumed a partner, and the shares stood as foUow : Sir 
 William Forbes, 19 ; Mr Hunter Blair, 19 ; Mr Bartlet, 6 ; Mr 
 Hay, 4 — in all, 48 shares. 
 
 Mr Hay proved himself in every respect worthy of the situation 
 in which he was placed ; but I owe it in justice to Mr Hunter 
 Blair's memory to say that the first suggestion was his, out of 
 compliment to me, to bring my brother-in-law into our coimting- 
 liouse, vrith a private understanding between us that he should be 
 in due time received as a partner if, after experience, we should 
 find him suitable to our purpose. 
 
 At the same period a new and very remarkable event took 
 place in the business of the house, which has been productive of 
 the most beneficial consequences. I mean our beginning, at the 
 1st January 1782, to issue circulating notes in the same manner 
 
 " After it was discovered that he had run away from us, his desk in the 
 counting-house was opened, when we found evidence of other acta of dishonesty 
 and misconduct on his part. 
 
 + [Mr John Hay was eldest son of Sir James Hay, of Smithfield, Bart., and 
 succeeded to the title in 1810. He died in 1830, aged seventy-five.] 
 
60 MEMOIRS OF A BANKING-HOUSE. 
 
 as the public banks of Edinburgh. To explain this, it is necessary 
 to go back to a period even more remote than my coming into the 
 counting-house, many years previous to which the house of 
 Provost Coutts had transacted their business with the Royal Bank 
 of Scotland, and the house had continued to do all their business 
 ■with that bank down to the time I am now speaking of, during 
 which long period the utmost cordiality had always prevailed 
 between them and us. At one time, indeed, when the Royal Bank 
 was engaged in a system of warfare with the banks of Glasgow,* 
 during the ^even Years' War, the directors had suspended a cash 
 account we had of £4000, because they supposed our house to be 
 in too intimate correspondence with the Ship Bank of Glasgow, 
 of which Mr Coutts's relation Mr Colin Dunlop had been one of 
 the founders, and was still a principal acting partner. The Royal 
 Bank, supposing that our house had a hand in draining gold from 
 them for the use of the Bank of Glasgow, withdrew this cash 
 credit, as they also did the cash accounts of Messrs Cuming and 
 Messrs Kinnear, who were the correspondents of the other two 
 banks at Glasgow. When, however, the Royal Bank became 
 sensible that this species of hostility which they carried on with the 
 Glasgow banks, tended to no good purpose, they gave it up ; our 
 house's cash account was restored ; and Mr John Coutts, who was 
 then alive, became a director of the Royal Bank. Of course, 
 while the house continued to transact their business with the 
 Royal Bank, all their payments were made in the paper of that 
 bank ; and as our business increased, and larger sums of money 
 were lodged with us at interest, instead of our requiring the cash 
 credit of £4000, we opened a deposit account at the Royal Bank, 
 where we lodged a sum of £20,000, for which the bank allowed 
 us an interest of four per cent. Besides this, we had also a 
 separate account for our daily operations, on which there seldom 
 or never was a less balance due to us than £20,000 more, for 
 which we got no interest at all. So that, in fact, we might be 
 said to receive an interest from the bank of not more than two 
 per cent. Besides the advantage which the Royal Bank made 
 of these deposits during the American war, when government 
 securities of the least fluctuating nature yielded a very high 
 interest, they had all the benefit arising from our making payments 
 exclusively in their paper, so that I am sure we did not exaggerate 
 when we estimated that our business of one sort and another was 
 worth to them not less than £3000 per annum. The bank direc- 
 tors, however, with a jealous policy, began to consider us and the 
 
 * [For an account of this warfare, see p. 5, note.] 
 
MEMOIES OF A BANKING-HOUSE. 61 
 
 other private bankers in Edinburgh as a sort of rivals, whose 
 operations they conceived to be facilitated by those accounts of 
 deposit which they allowed us, and concluding that we should be 
 under the necessity, for our own credit and comfort, to leave the 
 money with them whether they allowed us any interest for it or 
 no, they wrote to us on the 26th April 1781, that after the 1st 
 July following, instead of allowing us interest at four per cent, on 
 the account to be operated on daily, they would only allow three 
 per cent., on the condition that it should lie twelve months certain; 
 and they gave a similar notice to the other private bankers who 
 kept accounts of deposit with them. This measure, which we 
 could not but regard as ungenerous on their part, led us to con- 
 sider in what manner we might contrive to render ourselves inde- 
 pendent of them altogether. Looking, therefore, at the extent of our 
 business and number of our connections, and feeling the consequence 
 which we naturally derived from these circumstances, after consult- 
 ing with a friend or two on whose judgment in difficult cases we were 
 most accustomed to rely, we formed the bold resolution of issuing a 
 few notes ourselves, of the nature of bank-notes, by way of experi- 
 ment, for which we thought our credit and character in the world 
 sufficiently estabUshed. In order that we might act on solid grounds 
 and in conformity with what we conceived to be the true principles 
 of the banking business, we resolved that we should not employ any 
 agent either in Edinburgh or elsewhere for the purpose of pushing 
 our notes into circulation ; but would merely offer them instead 
 of those of the Royal Bank as formerly, in all payments which we 
 might have to make for our ordinary transactions in the counting- 
 house, and, should any persons 'shew hesitation to take them, or 
 express a desire rather to have the notes of the established banks, 
 we were instantly to comply with their wishes in that respect. Eor 
 this purpose we had provided an ample store, not only of gold and 
 silver, but of the notes of these established banks, until we should 
 see in what manner our new plan was likely to be viewed by the 
 public. Finally, we resolved that we should not enter into hos- 
 tiUty with any bank, but, as far as depended on us, would Hve on 
 friendly terms with all the world, being ready, however, to defend 
 ourselves if occasion so required. It was likewise a consideration 
 of some weight with us, that, finding ourselves very ill accommo- 
 dated in the house we occupied as a counting-house in the Presi- 
 dent's Stairs in the Parliament Close, we had purchased a waste 
 area on the south side of the Parliament Close, in which we 
 had erected a most commodious counting-house, well secured 
 against the danger of thieves or housebreakers, and of most 
 
62 MEMOIRS OF A BANKING-H0tJS2. 
 
 easy access for those who might be pleased to transact business 
 with Tis. 
 
 Having fully weighed this important matter, we set to work to 
 prepare those notes which we proposed to issue ; an operation of 
 more labour, and requiring more time, than any one not practi- 
 cally acquainted with the business could suppose, resolving to 
 begin to send them abroad into the world on the 1st January 1782, 
 at which period our new contract was to commence.* Previous 
 to our doing so, however, we wrote on the 5th December to the 
 Bank of Scotland, Eoyal Bank, and British Linen Company, to 
 inform them of our intention of issuing notes of a guinea and £5 
 on the 1st January ensuing, expressing it to be our earnest wish 
 to live on the most friendly terms with them, and proposing to 
 take up such of our notes as might come into their hands in the 
 course of business, once a week, as the country banks did, or oftener 
 if they pleased. On the 7th December we received an answer 
 from the Bank of Scotland and Royal Bank, informing us that 
 they meant to receive our notes in payment, but that as the British 
 Linen Company took up their notes every day, the two banks 
 expected we would do the same, a rule to which we conformed 
 without hesitation. In this manner was our plan set agoing 
 without difficulty. Every person to whom the notes were pre- 
 sented, either by ourselves or others, received them in payment 
 without the smallest hesitation, and, as we have invariably adhered 
 to those principles which we originally laid down, their circulation 
 has continued gradually, but steadily, to extend, till the amount 
 of our notes has not only far exceeded our most sanguine expec- 
 tations, but has been one cause of the great increase which has 
 taken place in the original and fundamental branches of our busi- 
 ness — the deposit of money with us at interest, and the negotiation 
 of bills of exchange between Edinburgh and London, both of 
 
 * A whimsical circumstance took place in regard to the date we affixed to our 
 notes, which deserves to be mentioned, because it had some temporary effect 
 in regard to their circulation. When adjusting the form of the notes to be 
 engraved, we fixed on the 1st July 1781 as the date which they were to bear, 
 without particular reason for preferring that date, except that it was the day 
 specified by the Eoyal Bank on which they were to shut our account, in case we 
 did not agree to the conditions they had prescribed. As ill-luck would have it, 
 the 1st July happened that year to fall on a Sunday, which did not occur to us 
 at the time, nor indeed till some weeks after we had begun to issue the notes, 
 when we were informed that many people scrupled to receive them in money 
 transactions, as supposing them not to be valid because dated on a Sunday. The 
 objection, whether legal or not, was worth attending to, and, as soon as it was 
 pointed out to us, we caused a new plate to be engraved and had the notes dated 
 1st March 1782. 
 
MEMOIRS OF A BANKING-HOUSE. 63 
 
 which branches have been enlarged to a most astonishing degree, 
 while, on the other hand, those branches of our business have been 
 the means of facilitating and extending the circulation of our 
 notes ; so that they have mutually acted and reacted on each 
 other. 
 
 In this comfortable train of business we went on till the year 
 1787, when, a break in our contract being about to take place at 
 the 1st January ensuing, Sir James Hunter Blair and I resolved 
 to reward the long and faithful services of an old associate, Mr 
 Lewis Hay, who had been in our counting-house for no less a 
 period than one-and-thirty years, by advancing him to the rank of 
 a partner.* His father had commanded a revenue cutter on the 
 western coast of Scotland, and his family had been resident at 
 Ayr, where Sir James and Lewis became acquainted at school. 
 His father having been laid aside from the command of his cutter, 
 on some malicious information as I have heard, brought his family 
 to Leith, where he engaged in the wine-trade with Mr Robert 
 Grant, nephew to our Mr Stephen. But Captain Hay being quite 
 unacquainted with mercantile business, his partner and he could 
 not agree, and of course separated. His eldest son, Lewis, became 
 a clerk in the Custom-house of Leith, where he first acquired the 
 habit of that correct and never-ceasing application to business 
 which stuck by him to the latest period of his life. At the request 
 of Mr Bell, wine-merchant in Leith, Lewis was received into our 
 counting-house as a clerk, about a year after me. He had a 
 brother, George, who engaged in the trade of making shoes for 
 wholesale exportation, on the joint account of his brother and 
 himself. In this business they were not successful, and, his 
 brother dying soon after, the creditors, sensible that Lewis had 
 made a fair surrender of the eflFects which belonged to the concern, 
 accepted of such dividend as could he afforded, and left him undis- 
 turbed in the possession of the moderate salary which he earned 
 in our house, and out of which he supported his father and mother. 
 He was indeed a most meritorious character, correct in the dis- 
 charge of all the relative duties of a man and a Christian, and 
 he had proved himself most useful to us in the general superin- 
 tendence of the -business of the counting-house, from which he 
 never was absent, almost for a moment He was therefore well 
 entitled to this mark of our favour ; but, previous to such a con- 
 
 * I had been in the house about a year before Sir James and Mr Hay came to 
 it. "We were now what might be justly called the only original members of 
 the counting-house ; every other person whom we found there when we entered 
 — ^master, clerk, and apprentice — having been long dead. 
 
64 MEMOIRS OF A BANKING-HOUSE. 
 
 nection taking place, it became necessary that he should receive a 
 regular discharge from his and his brother's creditors, for although 
 they had given him no disturbance while he remained in the 
 station of a clerk, they might not have been so indulgent when 
 they should see him a partner in our house. As some part of 
 what he had owed was to ourselves, this we discharged without 
 hesitation, and a proposal was submitted to the rest of the credi- 
 tors to make them a pa3Tnent on giving him a discharge in full, to 
 which they all most readily agreed.* 
 
 Before the contemplated break in our contract arrived, a most 
 unexpected event took place, which overwhelmed us all with the 
 deepest sorrow. It was the death of our worthy partner and 
 most intimate friend. Sir James Hunter Blair. He had set out 
 with Lady Blair in the end of April for Harrogate, where he pro- 
 posed to drink the waters for a scorbutic complaint, which was 
 sometimes troublesome to him. A few days after his arrival there, 
 he went on some business to London, where he remained only 
 four days, after which he returned to Harrogate. Their children 
 at home having been seized with the hooping-cough. Lady Blair 
 came down to Edinburgh by herself to attend them, leaving Sir 
 James to drink the waters. I continued frequently to receive 
 letters from him down to the 20th June, on which day he wrote 
 to me that he proposed to leave Harrogate on the 27th, to be at 
 Newcastle the 28th, and at Dunbar the 29th. But how vain 
 are all our projects! and so true is the observation of the poet, 
 that 
 
 ' On our firmest reaolutiona 
 
 The silent and maudible foot of death 
 
 Steals like a thief j ' 
 
 for while I was in the full expectation of seeing him return as he 
 proposed, Mr Hamilton of Wishaw arrived from Harrogate on the 
 morning of the 30th June, and told me that Sir James had been 
 seized a few days before with a fever, which had made such rapid 
 progress, that on the 28th, when he (Mr Hamilton) had left Harro- 
 gate, his life was despaired of. On communicating this intelUgence 
 to Lady Blair, but without saying how dangerously ill he was, she 
 set out in a couple of hours, attended by a maid-servant and 
 Dr Gregory ; Mr Wood, the family surgeon, followed them next 
 morning. It was, however, all in vain; for by the time Lady 
 
 * [Mr Lewis Hay, subsequently to tliis period, married Miss Margaret 
 Clialmers, daughter of Mr James Clialmers of Fingland, and noted in our literary 
 history as the friend and correspondent of Robert Bums, over whose mind her 
 virtues and inteUigenoe enabled her to exercise a considerable influence.] 
 
MEMOIRS OP A BANKING-HOUSE. 65 
 
 Blair reached Northallerton, she was met by an express with the 
 news of her dear husband's death, which happened on the 1st of 
 July 1787, in the forty-sixth year of his age.* 
 
 The loss of Sir James Hunter Blair was a most severe misfor- 
 tune to his family, to his partners, and to the city of Edinburgh. 
 His family, consisting of three sons and three daughters, were all 
 young, his eldest son being only fifteen years of age ; a fourth son 
 was added after his death. We, his partners, were deprived of a 
 most able associate in business. Edinburgh lost by his death a 
 most active magistrate, who had projected and carried on public 
 works equally conducive to the ornament and advantage of the 
 city. I, in particular, was deprived by his death of a friend whom 
 I can never replace, with whom I had lived in a degree of 
 intimacy which few brothers can boast of during one-and-thirty 
 years, in which long period we never had a difference nor a sepa- 
 ration of interest. It has been stated how we went on together 
 from the time of oiu: apprenticeship, till we gradually arrived, 
 after a variety of changes, to be at the head of the house. But I 
 should do great injustice to his superior talents, did I not declare 
 that to him it was chiefly owing that the house rose to such a 
 pitch of unlooked-for prosperity and reputation. He possessed a 
 sound and manly understanding and an excellent heart. In his 
 friendships he was warm, steady, and sincere, and ever ready to 
 promote the interest of those to whom he formed an attachment. 
 In his disposition he was cheerful and fond of society, and his 
 house was at all times distinguished for hospitality. As a magis- 
 trate, he was active and zealous in the discharge of his duty; 
 as a senator, he was honestly independent, supporting the measures 
 of the ministers of the crown when he thought them consistent 
 with the principles of the constitution and the good of the people. 
 Too early and too deeply immersed in business, he had little or no 
 leisure for study, and was therefore but little acquainted with 
 books or literature ; but he possessed, in an eminent degree, a 
 species of knowledge of the utmost importance to him as a man of 
 business — ^great knowledge of the world, and an almost intuitive 
 discernment of the characters of men. In business, both of a 
 public and private nature, he was skilful and active, and capable 
 of the most unwearied application, and his plans in general were 
 contrived with prudence and executed with steadiness. Of this 
 a memorable proof was afforded by the magnificent idea, which he 
 
 * [Bums, who, partly on account of Ms Ayr nativity, had been treated with 
 much kindness by Sir James, gave vent to his feelings on this occasion by an 
 elegy, which will be found in his works.] 
 
66 MEMOIES OP A BANKING-HOUSE. 
 
 formed on his being elected Lord Provost of EdinTjurgh, of a com- 
 munication between tbe High Street and the south side of the 
 city, by a bridge over the Cowgate. In the prosecution of which 
 extensive and important improvement, notwithstanding he met 
 with no inconsiderable degree of opposition from ignorant and 
 interested individuals, he was not to be discouraged, but kept on 
 the even tenor of his way, combating the prejudices of some and 
 the influence of others, till at last he accomplished his purpose. 
 In his temper there was a degree of warmth, which, in the pursuit 
 of a favourite object, or in the heat of an argument, occasionally 
 bordered on vehemence and impetuosity, and which sometimes, in 
 the intercourse of society, led him to forget or overlook what Lord 
 Chesterfield calls the graces. In his notions of right and wrong, 
 he was rigid and even stern, and he had no allowance to make 
 where he perceived in others any departure from the standard he 
 had formed of propriety of conduct. But his virtues will be 
 remembered and the utility of his public conduct felt and 
 applauded long after those slight imperfections are consigned to 
 oblivion. 
 
 A few days before I received the account of Sir James's illness, 
 and when, God knows ! I had little notion which of us was first 
 to pay the debt of nature, I had written to him about a plan that 
 had occurred to me for continuing an interest in our house to the 
 eldest son of any of the partners who should happen to die. It 
 had often been a subject of conversation between him and me, how 
 hard it would be, were either of us to die, that our family should 
 entirely lose the benefit of their father's exertions in having brought 
 the house into such a respectable position, and we had several 
 years before entered into a mutual agreement, that whichever of 
 us should survive the other, should pay to the son of the deceased 
 an annuity of £500 aryear during eight years. But even this I did 
 not think enough, and therefore proposed that the son should be 
 entitled, if he chose, to an interest in the house of one-third of his 
 father's share, which the surviving partners were to hold for his 
 account until the termination of the contract, but without the son 
 being permitted to interfere in the management of the business. 
 This letter Sir James had received, but had not had time to answer 
 before he was seized with his last illness. It was found among 
 his papers after his death, and as it contained the strongest proof I 
 could give of my belief in the utility of the proposal, I was anxious 
 that it should still be acted on ; and therefore, with the concurrence 
 of the other partners, I proposed to the tutors to whom Sir James 
 had left the care of his family, that a new contract should be 
 
MEM0IE3 OF A BANKINO-HOXJSB. 67 
 
 entered into on that footing. Of this plan tte tutors gave their 
 most cordial approbation j but a difficulty occurred which seemed 
 to present an insuperable bar to its taking effect. Had Sir James 
 lived to execute our new contract, he could of course have bound 
 his son and successor to any conditions he pleased. But his 
 eldest son, being left a minor, could not engage in any contract or 
 become bound to the world for his proportional share of the 
 engagements of the house. In order to get the better of this 
 difficulty, the tutors,* being impressed with the importance of pre- 
 serving an interest in the house to their young ward, were pleased 
 to carry their approbation so far as, with an unexampled confi- 
 dence in us, the other partners, to take upon themselves the 
 responsibility, and to become personally bound for young Sir John 
 Blair until he should come of age and confirm the contract him- 
 self — a measure which reflected the highest honour as well on 
 them who conferred, as on us who received, such a proof of their 
 confidence. In conformity with this an-angement, a new contract 
 was executed for twelve years from 1st January 1788, the shares 
 being thus divided — Sir William Forbes, 16; James Bartlet, 7; 
 John Hay, 7 ; Lewis Hay, 2 ; Sir John Blair, 5J ; the remaining 
 of Sir James's shares, lOf , being kept unappropriated, in case any 
 desirable partner should come in our way. In the meantime, the 
 profit belonging to those shares undisposed of went to the other 
 partners in proportion to their respective interests in the house. 
 Scarcely had this contract commenced, when we experienced another 
 severe domestic misfortune by the death of our worthy partner and 
 friend Mr Bartlet, whose talents as a man of business, and his appli- 
 cation to the management of our affairs, had rendered him highly 
 useful to us. For some time Mr Bartlet had been afflicted with a 
 violent pain in the elbow-joint of his right arm, which had disabled 
 him from writing or attending the counting-house since November 
 1786. At last the complaint had increased to such a degree that 
 the surgeons who attended him, and who were of course the most 
 skilful in Edinburgh, declared that amputation of his arm was the 
 only chance left for saving his life ; an operation to which he sub- 
 mitted with great fortitude in May 1787, and his recovery had 
 proceeded so well as to give us the greatest hopes, that although 
 he might not be able to take the same laborious share in the 
 executive business as formerly, he would still continue a most 
 valuable associate on whose knowledge of business and sound 
 
 • They were Lady Blair, the Earl of Cassillis, Mr Kennedy of Dunure, Dr 
 Gregory, Mx John Buchan, writer to the Signet, and myself. 
 
68 MEMOIRS OF A BANKING-HOUSE. 
 
 judgment we might with confidence rely. His constitution, how- 
 ever, was now so much shattered hy his long confinement and 
 sufiiering, that he was advised to pass the winter in a warm climate, 
 in order to perfect his recovery. In this expedition he was to he 
 accompanied hy Dr Cairnie, an intimate friend of ours, and who 
 had made a sort of employment of attending invalids ahroad, for 
 which he was eminently qualified by his medical skill and humane 
 disposition, as well as by his acquaintance with foreign countries. 
 They accordingly set out in September 1787 for Marseilles, where 
 Mr Bartlet proposed to fix his residence for the winter. 
 
 Finding, however, after passing some weeks there, that, instead 
 of making any progress in recovery, his strength was daily decay- 
 ing, he was seized with an anxiety to return home. For which 
 purpose he hired a vessel at Marseilles, on which, in the end of 
 November, he embarked for Scotland, leaving Dr Caimie, who had 
 an insuperable aversion to the sea, to return hy land. The 
 passage was exceedingly stormy, and it was long before we 
 received any tidings of his voyage. Our first and indeed only 
 letter was from Gibraltar, where the vessel had touched. After 
 leaving which, and just when he had got within sight of land on 
 the north-west coast of Ireland, he sunk imder his indisposition 
 on the 9th February 1788, sincerely lamented by his partners 
 and a numerous circle of acquaintance. 
 
 Mr Bartlet was characterised by a most excellent disposition, a 
 warm and friendly heart, a sound judgment, and the most gentle 
 and obliging manners. These qualifications he had improved by 
 reading and intercourse with the world. He was a cheerful and 
 most agreeable companion, and at the same time indefatigable 
 in business, of which he was perfectly master. His death, there- 
 fore, we could not but regard as a heavy misfortune, not only as 
 the loss of an able assistant in the counting-house, but of a friend 
 for whom we entertained the most sincere regard and esteem. 
 
 Sir James Elair had intended to send his eldest son to France 
 for a twelvemonth for his education, and he had even engaged a 
 lodging for him in Paris. Sir James's death, however, made some 
 change in that respect absolutely necessary ; for the guardians 
 of young Sir John did not think it expedient to send him to 
 live at Paris by himself, now that his father was dead, and when, 
 of course, he would soon be possessed of high notions of his own 
 fortune and consequence. We therefore resolved that he should 
 be accompanied by some proper person for directing his studies 
 and superintending his conduct, and Mr Arbuthnot, junior, was 
 engaged for this purpose. In like manner I had formed the plan 
 
MEMOIRS OF A BANKING-HOUSE. 69 
 
 of sending to France my eldest son, William, who was a year older 
 than Sir John Blair, and I had determined, on the recommen- 
 dation of Sir Robert Herries, to fix his residence at Lyons, in the 
 house of a Swiss Protestant clergyman, who proposed to under- 
 take the tuition of half-a-dozen young gentlemen. Mr Bartlet's 
 going abroad seemed a good opportunity for their all going together, 
 and they set out accordingly for Paris, where Sir John and Mr 
 Arbuthnot left them. My son continued the journey to Lyons, 
 where Dr Cairnie and Mr Bartlet put him into Mr Trossart's 
 hands. I soon found, however, that his house was by no means 
 an eligible situation ; for Sir Robert Herries, in his zeal to serve 
 Mr Trossart, had recommended his house to several others of his 
 friends, so that almost all his pupils were English : by consequence 
 my principal object of sending William to France to acquire the 
 language, was entirely defeated, as it was scarcely to be expected 
 that half-a-dozen lads living together in the same house could 
 avoid almost constantly speaking their own language. 
 
 I therefore resolved, after William had remained there about 
 six months, to send him to Paris, where, by means of my friend 
 Mr Livingston, who happened to be there, I got him placed in 
 the ColUge de Montagu, in the house of a Professor Bouily, where 
 he had not only the benefit of general study under the direction of 
 the professor, but also the best opportunity of acquiring French, 
 as neither the professor himself, nor any one within the walls of 
 the college, spoke anything else. There he remained six months 
 more, till I thought he had sufficiently accomplished the purpose 
 of my sending him abroad. 
 
 Almost immediately on the commencement of our new contract, 
 and before we received accounts of Mr Bartlet's death, two events 
 took place, which rendered that year not a little remarkable in the 
 history of our house — I mean the bankruptcy, first of Charles and 
 Robert Fall of Dunbar, and, a few weeks afterwards, of James 
 Stein and John Stein, with all of whom we were in the course of 
 extensive transactions. 
 
 Charles and Robert Fall carried on business in corn on a very 
 large scale, among the largest indeed in Scotland. James Fall, the 
 father of Robert, and founder of the house, was a merchant of 
 considerable eminence ; so much so, that he had been member of 
 parliament for the district of burghs, of which his native town 
 of Dunbar was one, and in which he had always retained the 
 chief political influence. Charles was his nephew, but Robert was 
 the principal acting partner in the house after his father's death, 
 and between him and Messrs Coutts there had not only been a 
 
70 MEMOIRS OF A BANKING-HOUSE. 
 
 great deal of commercial correspondence in reference to the com 
 trade,* but also much intercourse of personal friendship, ^vhich 
 had been strongly cemented by the marriage of Mr Eobert Fall 
 with our partner Mr Stephen's eldest daughter. Charles Fall 
 died, and although the firm was still continued, the business was 
 thenceforth solely in the person of Eobert. This correspondence 
 between Mr Fall's house and ours had subsisted for upwards of 
 forty years, during which their operations had been considerable, 
 and the advances of money made to them were proportionately 
 large, but always on the footing of being covered by deposits of 
 bills and other securities. For a considerable time, however, Mr 
 Fall had begun to shew an appearance of being in want of money. 
 He was less punctual in his remittances, and these were frequently 
 short of what they ought to have been. This naturally created 
 some suspicion in our minds that he was not in a prosperous situ- 
 ation ; for it may be laid do^vn as an infallible axiom in business, 
 that although any man may at a particular time be in want of 
 money from some unforeseen disappointment or other, which it 
 will be his endeavour as soon as possible to remedy, yet the mer- 
 chant who appears to be constantly in a state of difficulty, is either 
 unsound at bottom, or he is carrying on business more extensive 
 than his own capital Is equal to. And in either of these cases his 
 con'espondence is carefully to be avoided. This seemed evidently 
 to be the case with Mr Fall. As we knew, however, that he 
 possessed property both in land and houses at Dunbar, part of 
 which he retained for political purposes in connection TOth that 
 burgh, we considered that property as a sort of guarantee for 
 the safety of his operations with our house. Still, we endeavoured 
 to be as guarded with him as possible, frequently remonstrating 
 against the irregularity of his remittances, and endeavouring to 
 keep ourselves well covered. Yet, being somewhat suspicious that 
 he was not in a prosperous state befpre Sir James Hunter Blair 
 went to Harrogate, he and I had written a strenuous remon- 
 strance to him in our joint names, as private friends, insisting, for 
 his own sake as well as ours, that he would lay before us a state of 
 his affiiirs. In answer to this earnest application, Mr Fall sent 
 us a statement of his landed property, and a balance sheet of 
 his books, from which we were led to believe that, although 
 he did not seem to be opulent, yet upon the whole he might 
 be reckoned more than equal with the world. After Sir James's 
 
 * Mr Fall had also introduced into Scotland the curing of red herrings, and 
 he had chiefly brought about the formation of the East Lothian and Merse 
 whale-fishing company stationed at Dunbar. 
 
SIEMOIES or A BANKING-HOUSE. 71 
 
 death, howeyer, we became still more anxious to hare his account 
 brought into regular order, yet vrere very unwilling to take 
 any strong steps for that purpose, with a house who had been so 
 many years in close correspondence with our predecessors. In this 
 manner things went on during the remainder of the year 1787, 
 till at last Mr Fall, being disappointed of assistance which he 
 expected from some of his friends, found he could go on no longer, 
 and in January 1788 was compelled to stop payment. The balance 
 which he owed us on account was no less than £17,000; 
 but as we held a number of bills remitted to us in the course of 
 our correspondence, we did not apprehend that we should be any 
 considerable losers in the long-run. Trusting to that circumstance, 
 we, very incautiously as well as needlessly, allowed our names to 
 be used for a sequestration of his eifects under the bankrupt law, 
 and proved our debt to its fiiU extent. It being thus published to 
 the world that Mr Fall was so deeply indebted to us, some alarm 
 arose, particularly among the farmers of East Lothian and Ber- 
 wickshire, who had money lodged with us, and among whom Mr 
 Fall's bankruptcy made much noise, and for a few days it occa- 
 sioned some run on our house for money. But it was confined to 
 the lower ranks, and soon ceased. Our ultimate loss by this bank- 
 ruptcy, although more than we had laid our account with at the 
 time when it happened, was but inconsiderable. 
 
 Scarcely had this alarm subsided, when other bankruptcies took 
 place, which at first threatened the most serious consequences. 
 James Stein at Kilbagie, and John Stein at Kennetpans, both in 
 the neighbourhood of Alloa, two brothers, had carried on the 
 business of distilling of malt spirits to an extent hitherto unknown 
 in Scotland. They were correspondents of our house, and their 
 transactions, particularly James's, were to a very large amount. 
 Not content with the sale of spirits in Scotland, they resolved to 
 rival the distillers of London by manufacturing spirits for the 
 English market, which they conceived themselves enabled to do 
 by some advantages in their situation in Scotland, where fuel and 
 labour were cheaper than in London. They therefore hired ware- 
 houses in London, and sent very large quantities of spirits to that 
 market, consigned to a house under the firm of Sandeman and 
 Graham, whose sole occupation was the acting as their agents. 
 As they were known to have made money at one period, and as 
 they preserved the utmost punctuality and regularity in all their 
 transactions, they arrived at a considerable degree of credit. In 
 this opinion of their solidity, Sir James Hunter Blair had been 
 much confirmed by what he had heard and seen in the House of 
 
72 MEMOIRS OF A BANKING-HOUSE. 
 
 Commons while he was in parliament, at the time when the laws 
 respecting distilleries were under the consideration of the legis- 
 lature, and when James Stein got considerable praise for the open 
 and candid manner in which he answered the questions put to 
 him during the investigation of that business. Both James and 
 John Stein, therefore, had been indulged, particularly James, 
 whose business was by far the most extensive, with a degree of 
 credit much beyond the bounds of prudence. 
 
 Their transactions, however, were to so large an amount, and 
 our engagement by their drafts running on London, had become 
 so extensive, that, towards the close of the year 1787, I could not 
 help beginning to feel uneasiness at finding ourselves so deeply 
 engaged, that, supposing what was at least possible, they were 
 supporting themselves by a circulation of bills, we were completely 
 in their power ; a situation which nothing should ever induce any 
 man of business to allow himself to be brought into by another. 
 The other partners, however, did not view matters in the same 
 alarming light, and appealed to the con-ectness of Messrs Stein's 
 whole transactions, which, to be sure, was true in every respect, 
 except as to the excessive amount of their London paper, which 
 they had induced us to negotiate for them. Notwithstanding all 
 this, I was resolved to endeavour gradually to reduce the extent 
 of our engagement within more moderate bounds, and we began 
 to take measures to bring this about, although it was a work by 
 no means easy, considering the facilities to which we had accus- 
 tomed them. 
 
 Things were in this situation, when the whole fabric of their 
 credit suddenly fell to the ground by the stoppage of their agents 
 in London, Sandeman and Graham, one of whose acceptances was 
 received with protest by the post of Saturday morning, the 
 Tebruary 1788. The necessary consequence was the stoppage also 
 of James Stein and John Stein, and of James and John Haig, 
 distillers at Canonmills near Edinburgh, with whom the Steins 
 had been much connected, and who were embarked in a trade of 
 similar nature. 
 
 Besides ourselves, the largest creditors of James Stein were 
 Messrs Allan and Stuart of Edinburgh, who, being extensive 
 dealers in corn, had been induced by their confidence in Messrs 
 Stein's credit to engage in correspondence with them only a very 
 few months preceding, for the purpose of supplying barley for their 
 distillery. As soon as the intelligence arrived from London of 
 Sandeman and Graham's failure, Mr Stuart went over to Kilbagie 
 and made an investigation of their affairs, whence it appeared that 
 
MEMOIES OP A BANKING-HOUSE. 73 
 
 their engagements were most extensive, particularly those of 
 James Stein, and that there must be a very great loss to their 
 creditors. It appeared also that, for a considerable time, they had 
 been carrying on a losing trade in a foolish and fruitless contest 
 with the London distillers, who, being a great and opulent body 
 of men, had kept down the price of spirits in order to drive their 
 Scotch competitors out of that market — a proof of which was their 
 largely raising the price immediately on those bankruptcies taking 
 place. This contest with the London distillers they had been 
 enabled only to support by their circulation of bills in London, 
 the expenses of which, and the numerous other drawbacks attend- 
 ant on carrying on a losing trade, had greatly enhanced the 
 mischief 
 
 As there had been a run on our house, by reason of the report 
 that we were largely concerned in the failure of Messrs Fall, 
 although it was well known that we ran the risk of very little 
 ultimate loss by their failure, we had now solid grounds for appre- 
 hending a more serious shock to our credit, when it should be 
 known that we were so deeply involved with the Steins, and that 
 they would pay but a very small dividend. Rumour, no doubt, 
 greatly magnifies every circumstance of that nature. Knowing that 
 we had large resources at our command, we had nothing left for 
 us but to face the storm, which we had every reason to expect 
 would take place. As the support of the credit of a banking 
 company, where there is a conviction of safety, is in fact a matter 
 of general concern, the Royal Bank sent us a message by a particu? 
 lar friend at that time in the direction, to let us know that they 
 would receive any bills on London we might have to negotiate, or 
 any paper we might wish to convert into money ; and of this 
 friendly offer we so far availed ourselves as to draw for a consider- 
 able sum on our bankers in London by way of precaution, in case 
 the demands on us should run higher than we might otherwise 
 conveniently provide for. We also ordered our bankers in London 
 to dispose of as much Bank of England stock and other govern- 
 ment securities as would replace the large sum of bills drawn by 
 James and John Stein, and James and John Haig on their agents 
 in London, which had become useless by their failure. 
 
 But if the run on the house at the time of the failure of Messrs 
 Fall had been altogether unlocked for, and much more severe 
 than could have been expected, the demands on the house, which 
 took place on the present occasion, were by a great deal more 
 inconsiderable than I had laid my account with. As in the former 
 instance, too, it was chiefly confined, with not above two or three 
 
74 MEMOIES OF A BANKING-HOUSE. 
 
 exceptions, to the lower class of depositors, and in three or four 
 days it entirely ceased. This was, no doubt, very much owing to 
 the promptitude with which we satisfied every call that was made 
 on us, and the funds with which we were seen to be prepared 
 to meet the demands that from time to time appeared. On the 
 other hand, -we received the most flattering instances of attach- 
 ment from a numerous body of fi-iends, who, overlooking the 
 imprudence we had been guilty of in going such unwarrantable 
 lengths with those merchants, sought only to know how they 
 could be serviceable to us at such a crisis. Nor did our general 
 business suffer any diminution, so that we had the utmost reason 
 to be thankful to Providence that this misfortune, which at first 
 seemed to threaten our very existence, was finally productive of no 
 other bad consequence to us than the loss of so much money — a 
 loss which I hope will be amply compensated by the lesson of 
 caution it has taught us. 
 
 Just before this event took place, the Messrs Hay and I, 
 considering how our numbers, as well as our executive powers, 
 were diminished by the loss of two such valuable and active 
 associates as Sir James Blair and Mr Bartlet, had resolved on the 
 assumption of a new partner ; tut the diificulty was where to find 
 one endowed with the qualities necessary for our purpose ; one 
 possessing knowledge of business, with judgment, application, 
 and good temper, whose character should be so well established in 
 the world as to give us the prospect of going on comfortably and 
 harmoniously together hereafter, as we had been fortunate enough 
 to do hitherto. 
 
 After revolving for a considerable time in my mind a subject to 
 us so momentous, and consulting with my friend Mr Farquharson, 
 the accountant, to whose counsel I had been long accustomed to 
 resort on every emergency, I fixed on Mr Samuel Anderson, mer- 
 chant in Edinburgh, as a gentleman who appeared to be well suited 
 for us. My personal knowledge of Mr Anderson was but slight, 
 and was chiefly founded on the general good character he bore in 
 the world. But Mr John Hay was perfectly well acquainted with 
 his temper and disposition, from having been his school-fellow, and 
 ever since his intimate friend and companion. He therefore gave 
 his warmest approbation of the measure, and a treaty was actually 
 begun with Mr Anderson before Stein's failure, which that event 
 naturally suspended for a little ; but as soon as the storm had 
 blown over, and the tranquillity of the house was restored, we 
 resumed the negotiation ; and we found no difiiculty in satisfying 
 Mr Anderson, by laying before him a statement, shewing both the 
 
MEMOIES OF A BAJIKING-HOCJSE. 73 
 
 solidity of our house and the profitable nature of the concern in 
 which we invited him to take a share. He felt no reluctance to 
 join us, and a contract was accordingly dra\ra up, and executed on 
 the 14th of April 1788, by which Mr Anderson was assumed a 
 partner for the same share which Mr Bartlet had held — a measure 
 with which we have all had much reason to be satisfied, by the 
 harmony that has so uniformly subsisted among us, and the very 
 great assistance we have derived from him in the management of 
 the business.* By his marriage a few years thereafter, he became 
 brother-in-law both to Mr Hay and me, so that we are now linked 
 together by afiinity, as well as friendship and mutual interest, in a 
 manner the most comfortable that can be possibly imagined ; and 
 our affairs have continued to prosper, by the blessing of Provi- 
 dence on our honest endeavours to discharge our duty to all, 
 greatly beyond our most sanguine expectations. 
 
 In the end of this year, 1788, ray eldest son, WiUiam, returned 
 home ; and as I had always destined him for a man of business, 
 with the hope of his one day proving himself worthy of being 
 admitted a partner, he instantly came into the counting-house, 
 and commenced his apprenticeship for the usual period of five 
 years. 
 
 Meanwhile everything continued to go on to our utmost wish. 
 Our business gradually increased, as will be seen by the statement 
 in the Appendix, and our sole care was to cultivate the good-will 
 of our employers, not by serviUty or meanness, but by attention, 
 and a careful and exact discharge of our duty. The arrangement 
 by which Sir John Hunter Blair had, though under age, been 
 admitted a partner, in conformity with my letter to his father, 
 related solely to him ; but we now agreed that it should be applied 
 
 * As, by the terms of the previous contract, it was stipulated that the share 
 of a partner deceasing was to continue till the 31st December subsequent to his 
 death, whereby Mr Bartlet's heirs were entitled to a share of the profits of that 
 year, Mr Anderson would not accept of any share or profit till the year follow- 
 ing; yet he instantly began, notwithstanding, to take his share of trouble and 
 responsibility with the rest — a mark of disinterestedness which I feel a pleasure 
 in recording. 
 
 [Another instance of the disinterestedness of Mr Anderson may be stated on 
 the authority of an esteemed citizen of Edinburgh, many years deceased. He 
 had been a school-fellow of Henry Dundas, Lord Melville, who, as is well 
 known, had for many years nearly the whole government patronage of Scotland 
 in his hands. His lordship, on a visit to Edinburgh, renewed acquaintance with 
 Mr Anderson, came to dine with him, was introduced to a noble series of sons 
 just entered on manhood, and spent a most cordial and happy evening. He 
 aftei-wards stated to a friend — and the set of sons makes the remark the more 
 important — ^that this was the only similar occasion he could recollect when he 
 liad not been -asked a favour.] 
 
76 MEMOIRS OF A BANKING-HOUSE. 
 
 equally to us all, and we therefore entered into an agreement on 
 the 11th March 1789, by which we hound ourselves that, in the 
 event of the death of any of the partners, his eldest son should 
 retain the right to one-third of his father's share, to he held on his 
 account by the surviving partners, but without his having any title 
 to interfere in the management of the business, and with a liberty, 
 at the same time, to him or his guardians, to retire from the con- 
 cern if he pleased. 
 
 In the autumn of this year, 1789, Sir John Hunter Blair 
 returned from Paris, as it was the earnest wish of his mother and 
 all his friends that he should apply heartily to business, not only 
 for his own sake, but that of his numerous younger brothers. 
 Immediately on his arrival, he came into the counting-house for 
 the purpose of mastering details, so as to be fitted for becoming an 
 active partner ; and he shewed at first every inclination to fulfil the 
 wishes of his friends ; but it was not long before it became obvious 
 that he was by no means qualified for business. He continued, 
 however, to attend the counting-house with more or less interrup- 
 tion till the year 1792, when he left it entirely. By this time the 
 memorable French Revolution had taken place, and hostilities had 
 commenced on the continent, by the irruption into France of the 
 army of Prussians and emigrants under the command of the Duke 
 of Brunswick, in autumn 1 792. Still, however. Great Britain had 
 remained quiet, shewing every disposition to continue in peace, 
 and at no period did the prosperity of the country appear to be at 
 a higher pitch. Merchants and manufacturers of every sort had 
 greatly extended their trade, and the public funds had not been so 
 high for many years.; but the famous retreat of the Duke of 
 Brunswick's army, and the subsequent successes of the French in 
 Flanders, had so elated the then ruling powers of France, that they 
 meditated the overthrow of every old established government in 
 Europe, and in particular that of Great Britain. 
 
 In the prosecution of this design, it was not difficult to find in 
 every state factious and discontented spirits ready to hatch any 
 mischief that might spread confusion, and, if possible, bring about 
 a change of government. Such were by no means wanting either 
 in England or Scotland, and the consequences are well known, that, 
 in order to provide for the safety of the state, government judged 
 it expedient to call out the militia and to summon parliament to 
 meet in the month of December 1792. These proceedings, which 
 obviously foreboded a risk of hostilities, were the signal for a check 
 on mercantile credit all over the kingdom ; and that check led, by 
 consequence, to a demand on bankers for the money deposited 
 
MEMOIRS OF A BANKING-HOUSE. 77 
 
 with them, in order to supply the wants of mercantile men, who, 
 finding an almost total stagnation of trade, were unable to dispose 
 of the goods with which their warehouses were full, or to raise 
 moneyonthemforthepayment of running engagements. Numerous 
 bankruptcies in London, and the other great mercantile towns of 
 England, among men who had embarked too deeply in trade and 
 manufactures, were the consequence. 
 
 To all this was added another cause of the great and increasing 
 demands on banks — ^namely, the machinations of the seditious and 
 the apprehensions of the timid. The first OTshing to give a blow to 
 the existing government by ruining the credit of the nation, and of 
 all monied people, thereby worked on the fears of the others, so 
 as to create a general alarm and apprehension. This check to 
 circulation, and the consequent demands for money, began to be 
 felt by us, as well as by our neighbours, very early in the year 
 1793, and rose to such an alarming height as put the demands on 
 the house, that took place in the year 1788, totally out of remem- 
 brance. The demand for money at Glasgow, in particular, was 
 uncommonly great, and besides obliging many of the most opulent 
 houses there, in the mercantile and manufacturing line, fairly to 
 acknowledge that they could not fulfil their engagements, it pro- 
 duced the failure of the bank of Murdoch, Robertson, & Co., 
 known by the name of the ' Glasgow Arms Bank,' from the orna- 
 ment on the top of their circulating notes, and which was one of 
 the three old established banks of that city, although their business 
 had much declined. This happened on the 14th March 1793; 
 and on the 21st of that month, to the very great surprise of every- 
 body, James Dunlop of Glasgow, who was supposed to be one of 
 the most opulent and cautious men of business in the west, was 
 compelled to declare himself bankrupt.* On the 23d April the 
 house of Bertram, Gardner, & Co. of Edinburgh also stopped 
 
 * Mr Dimlop had embarked deeply in two branches which, had peace con- 
 tinued and money been plenty, must have made his fortune. Impressed with 
 an idea of the increasing value of land, he had purchased several extensive 
 estates ; and having largely engaged in the working of coal-mines, in which he 
 was supposed to be uncommonly skilful, he had reduced these two branches of 
 trade, if so they may be called, to a system by which he proposed every year to 
 accumulate such a sinking fund as should enable him soon to pay off the great 
 debt he was obliged to contract for them, and then leave him in possession of a 
 clear solid landed property ; but the war and the consequent scarcity of money 
 disconcerted all his measures, and compelled him to stop payment ; the conse- 
 quence of which was, that his large landed estates being brought to sale at a 
 period when the value had fallen by reason of the pressure of the times, they 
 went at a great depreciation, and his creditors were heavy losers. The same 
 estates, if to be now sold, would fetch far greater prices. 
 
78 MEMOIRS OF A BANKING-HOUSE. 
 
 payment, and, to complete the confusion, the four banks of New- 
 castle, which were known to be opulent, were forced to shut up 
 on the 12th April, owing to their not having had the precaution 
 to keep in readiness sufficient funds to meet the demands that 
 were made upon them. Their stoppage was accompanied by that 
 of a great many country banks in various parts of England, where 
 the trade of banking had been carried to an unwaiTantable extent 
 by persons who had not a sufficient foundation, and who, by con- 
 sequence, were unable to stand the run that the scarcity of money 
 brought upon them. During the whole of this irksome period, I 
 was in Italy, altogether unconscious of what was going on at home, 
 and ray partners had been unwilling to alarm me, or to say any- 
 thing that might induce me to return before the object of our 
 journey — which was the re-establishment of Lady Forbes's health 
 — should be effected. At last, however, things became so serious, 
 and assumed so very alarming an aspect, that they wrote, earnestly 
 requesting me to come home. So little notion had I of anything 
 having happened to require my presence in Scotland, that we were 
 even thinking of spending the summer in Switzerland, and of 
 returning to pass the ensuing winter at Naples. All my letters 
 had brought us accounts that everything was going on smoothly 
 in the counting-house. An interval of a fortnight had taken place, 
 however, without the arrival of any mails from Britain, till the 
 26th April, when I received a letter from Mr Hay, which aston- 
 ished me more, I believe, than any I ever received in all my life. It 
 was dated the 30th March, and referred me to one written the 
 preceding post by Mr Anderson, hut which I had not then received, 
 as the arrival of the mails was rather irregular. Mr Hay, in his 
 letter, lamented the numerous failures that had taken place, and 
 the consequent run on every bank and banking company, of all 
 which he spoke as supposing me to be perfectly well acquainted, 
 from Mr Anderson's letter, with everything that was passing; and 
 he concluded by saying that, since Mr Anderson had written, there 
 had been a meeting of James Dunlop's creditors, when it appeared 
 there would he a very great deficiency, although he still hoped our 
 loss would not be more than Mr Anderson had called it in his 
 letter, but without specifying what that wtis. Finally, he con- 
 cluded by requesting me most earnestly to let no consideration, 
 except Lady Forbes's health, prevent me from coming home with- 
 out delay. It is scarcely possible to conceive greater astonishment 
 than mine on the perusal of this letter. Numerous bankruptcies I 
 could suppose to have happened in times such as Mr Hay described 
 them to be; but had I been desired to specify the man who, in my 
 
MEMOIRS OF A BANKING-HOUSE. 79 
 
 opinion, was least likely to become bankrupt, I verily believe I 
 should have named Mr Dunlop, whom I had always considered to 
 be one of the most thriving men in Scotland, as well as one of the 
 most intelligent and active, besides being sober, and economical in 
 his family, and addicted to no unusual personal expense.* 
 
 Immediately on receiving Mr Hay's letter — Mr Anderson's did 
 not reach me till the mail following — I at once abandoned all 
 thoughts of remaining longer in Italy. My only consideration was 
 in what manner I could get soonest and best home ; but as Lady 
 Forbes was still in a poor state of health, I very much wished her 
 to remain, with our daughter, at Rome, where we had several English 
 friends. She was extremely averse to the idea of being left behind, 
 and wished at least to try how she could bear the journey as far 
 as Florence ; that, if when there she found it too much for her, 
 she might remain with an Irish family of our acquaintance, and I 
 could proceed to Scotland by myself. 
 
 It was, however, the 8th of May before we were able to begin 
 our journey from Rome. As we were stepping into the carriage, 
 I received a few lines from Mr Hay, dated 13th April, informing 
 me that they had just received information of the four Newcastle 
 banks having been obliged to shut their doors and suspend pay- 
 ments. Knowing the opulence of the partners of these banks, I 
 could not but dread that if the panic had continued to extend 
 itself as far as Edinburgh, our own house might perhaps be at 
 that moment in the same predicament. I had the satisfaction of 
 knowing by the English newspapers that an association had 
 been formed in London, of Northumberland gentlemen, for the 
 purpose of supporting the credit of the Newcastle banks, in 
 consequence of which they had again begun to do business : 
 and next morning I received letters from my partners to let 
 me know that they were going on with credit and respectability, 
 notwithstanding that the demand on them for money still con- 
 tinued exceedingly great. What the final issue might be, however, 
 I could not possibly divine, and I knew that I could not again 
 hear from home for at least three weeks — namely, till we should 
 arrive at Brussels. With all expedition, therefore, we continued 
 our journey, and arrived at Brussels on the 4tli of June. On 
 
 * Mr D;uilop detailed to me all liis plans and projects in a very well written 
 letter, which I received from him on my way home, and in which he apologised 
 for having drawn some bills on ns just the day before he stopped payment. He 
 said he had done so in an agony of mind not to be described, but that in the 
 uncertainty of his situation, he still flattered himself that, on seeing his friend 
 Mr GammeU from Greenock next day, he might have found it possible to 
 go on. 
 
80 MEMOIRS OF A BANKING-HOUSE. 
 
 going to the banker's, I found a packet of letters from Mr Hay. 
 As my former letter from him, which I had received at Florence, 
 was dated 20th April, there was a terrible interval, the events of 
 which I had now to learn, and, considering the gloomy strain of 
 the former, it will not be surprising that I felt a few moments' 
 hesitation before I could break the seal of that which I now 
 received, lest it should have brought tidings of a disastrous nature. 
 To my unspeakable relief, the accounts were highly favourable. 
 Mr Hay informed me that, after his last letter, things had become 
 still worse by the failure of Bertram, Gardner, & Co., which was 
 the signal for a more general and extensive alarm, and the demand 
 for money had been immense, not only on our house, but on 
 Messrs Mansfield & Co. and the Eoyal Bank, of which he gave 
 me the most convincing proof by enclosing a slip of paper contain- 
 ing the sums we had paid away in the course of one week,* to an 
 amount I should scarcely have thought possible. But he told me 
 likewise not only of the promptitude with which they had been 
 able to make their own payments, but of the help they had been able 
 to afford to other houses who had been put to a nonplus, and who, 
 without our aid, there was great reason to fear, would have been 
 forced to stop, whereby the evil would have been still further 
 increased. Thus we had been able to weather the storm, not only 
 with safety, but with a considerable increase of credit and reputa- 
 tion. And it is impossible for me to do justice to the ability and 
 firmness which my partners had displayed while thus suiTounded 
 by the most alarming danger. The exertions they had made to 
 collect our funds and provide against every emergency, were 
 beyond all praise. By the time we arrived in Edinburgh, which 
 was on the 16th June, tranquillity was completely restored, and 
 
 * The number of interest-receipts paid from 23d April to 30th April 
 inclusive was ....... 608 
 
 The number granted was ..... 60 
 
 More paid than granted, ..... 548 
 
 In ordinary times the numbers paid and gi'anted are pretty much the same : 
 
 Amount paid above granted in December 1792, . . £10,670 
 
 tr 1 " January 1793, . . 16,916 
 
 /, " » February • . . 11,561 
 
 March . . . 62,961 
 
 „ - • April " . . 105,075 
 
 // » to 23d May « . . 66,541 
 
 Total paid more than granted from Deo. 1792 to 23d May 1793, £263,724 
 
 The diminution on aooount-oun'ent balances was in proportion ; that is, nearly 
 as much more. 
 
MEMOIRS OF A BANKING-HOUSE. 81 
 
 business again flowing in its accustomed channel ; also the money 
 which had been drawn out of our hands in the course of the spring 
 soon began again to return, till at last the sum of our deposits far 
 exceeded that of any former period, partly no doubt from the 
 increasing wealth of the country, and partly— perhaps we may be 
 allowed to say without the imputation of vanity — from the regu- 
 larity and attention with which we have conducted our business, 
 and the desire we have always shewn to accommodate our corres- 
 pondents as far as prudence warranted. 
 
 At the commencement of the following year, 1794, my son 
 William having finished his apprenticeship, and evinced a disposi- 
 tion to become an active man of business, Mr Hay and Mr 
 Anderson were pleased to gratify my wishes by admitting him a 
 partner from that date. In order to do this, we made the follow- 
 ing distribution of the 10|- shares which had remained undivided 
 of Sir James Blair's stock, and over which we had retained the 
 power of disposal : Sir W. Forbes, 4 ; Mr J. Hay, 2 ; Mr Ander- 
 son, 2 ; Mr Forbes, 2 ; Mr L. Hay, f ; and the deed of agreement 
 was signed 1st April 1795. In this distribution we omitted Sir 
 John Blair altogether, as he had now withdrawn from the count- 
 ing-house, and given up all thoughts of being a man of business, 
 although he continued to retain his 5|- shares until the termination 
 of the contract. 
 
 During all this while, the war in which the nation was engaged 
 with France, continued to rage with unabated fury in different 
 parts of Europe, and with various success. At the same time, in 
 contradiction to the experience of all former wars Great Britain 
 had been engaged in, which had always checked and diminished 
 the trade of the country, such was now the superior power of the 
 British navy, as evinced by our success at sea, that, while the navy 
 and the trade of France had both been greatly reduced, the com- 
 merce of the whole world seemed to centre in this country. 
 France, therefore, strained every nerve to cripple us, and she par- 
 ticularly directed her attention to Ireland, as the most vulnerable 
 part of the British dominions in Europe. 
 
 In prosecution of this plan, a formidable squadron with troops 
 on board sailed in a fog from Brest, having thus escaped the 
 vigilance of the British fleet by which that harbour was blockaded, 
 and arrived in Bantry Bay, on the south-west coast of Ireland, 
 in the end of December 1796. Being, however, providentially 
 hindered from landing by tempestuous weather, and not suc- 
 ceeding in their attempt to raise an immediate insurrection in 
 the country, they were obliged to turn and make the best of their 
 
82 MEMOIES OF A BANKING-HOUSE. 
 
 way home. Formidable tlireatenings were also spread abroad on 
 the part of France, of their intention to make a descent on England, 
 which had the eifect of creating such an alarm in London, and, 
 indeed, over the country, that the demand for gold on the Bank of 
 England was beyond all former example. Nor was the alarm con- 
 fined to England. It very soon reached Scotland, and a run on 
 the banks and banking-houses in Edinburgh, similar to that of 
 the year 1793, took place, although fortunately it was but of short 
 duration. It apparently had its commencement from a public 
 meeting of the county of Mid-Lothian, called by the Duke of 
 Buccleuch, the lord-heutenant, on Friday the 17th February 1797, 
 to concert measures for the defence of the country in case an enemy 
 should attempt to land. The resolutions adopted by that meeting 
 being advertised in the Edinburgh newspapers of Saturday, were 
 perused and commented on next day by the farmers and lower 
 classes of people in the villages throughout the country, who, in 
 consequence, became alarmed, and on Monday the 20th they came 
 to our counting-house in considerable numbers, evidently under 
 the impression of terror, calling for payment of their notes that 
 had been lodged at interest. This lasted the whole of that week, 
 and the two first days of the following. Nor was it confined to 
 us alone, for the public banks experienced it in a still greater 
 degree, and we were beginning to think there was to be a similar, 
 perhaps a still severer, demand on us than what had taken 
 place in 1793 ; when, early in the morning of Wednesday the 1st 
 March, an express arrived from London to the directors of the 
 Bank of Scotland from Thomas Coutts & Co., their correspondents 
 there, informing them that the demand for gold on the Bank of 
 England had risen* to such an alarming height, that the directors 
 had thought it proper to state the circumstance to the Chancellor 
 of the Exchequer, who immediately procured an order of the 
 Privy Council to be issued, prohibiting that bank from making 
 any more issues of specie in exchange for their notes. Mr Mans- 
 field, who was a director of the Bank of Scotland, informed our 
 Mr Anderson of this interesting event, and he immediately 
 brought the intelligence to me, a little before the usual hour of 
 commencing business. My ideas, at various times during the 
 course of the war, had been often not a little gloomy when I 
 thought of the state of things in the kingdom, and indeed in 
 Europe ; but now it was that I certainly did think the nation 
 was ruined beyond redemption, when so novel and alarming a 
 circumstance had taken place at the Bank of England, which had 
 ever been considered as the bulwark of public and private credit. 
 
MEJIOIES OP A BANKING-H0T7SE. 83 
 
 Mr Hay, Mr Anderson, my son, and I, all repaired as fast as 
 possible to tlie counting-house, which at ten o'clock was crowded 
 as usual with people demanding gold. We were soon joined by 
 Mr Simpson, cashier, by Mr James, deputy-governor of the 
 Royal Bank, and by Mr Eraser, the treasurer of the Bank of Scot- 
 land, and we sent for Mr Hog, manager of the British Linen 
 Company, for all ceremony or etiquette of public or private banks 
 was now out of the question, when it had become necessary to 
 think of what was to be done for our joint preservation on such 
 an emergency. Thence we repaired to the Bank of Scotland, 
 where their directors were assembled, and after some time spent 
 in consultation with them, it was agreed that there was no choice 
 left but to follow the example of the Bank of England, and sus- 
 pend all further payments in specie. The Lord Provost instantly 
 gave orders for calling a meeting of the principal inhabitants 
 that day at two o'clock, which was very numerously attended, 
 considering the shortness of the notice, and amongst others by the 
 Lord President of the Court of Session, the Lord Chief Baron of 
 Exchequer, the Lord Advocate, and the Sheriff of Edinburgh. 
 After stating the order of Council for suspending the payments in 
 specie by the Bank of England, and the similar resolution taken 
 by the banks of Edinburgh, a resolution was instantly and unani- 
 mously entered into by those present to give every countenance 
 and support to the Edinburgh banks — ^including our firm — by 
 receiving their notes in payment with the same readiness as 
 heretofore, and a handbill to that effect was instantly circulated 
 over Edinburgh, and inserted in all the newspapers. Expresses 
 were likewise despatched to Glasgow, Greenock, Paisley, Ayr, 
 Perth, Dundee, and Aberdeen — at all which places there were 
 banks — to inform them of what was passing. The instant 
 this resolution of paying no more specie was known in the 
 street, a scene of confusion and uproar took place, of which 
 it is utterly impossible for those who did not witness it to 
 form an idea. 
 
 Our counting-house, and indeed the offices of all the banks, were 
 instantly crowded to the door with people clamorously demanding 
 payment in gold of their interest-receipts, and vociferating for silver 
 in change of our circulating paper. It was in vain that we urged 
 the order of Council — which, however, applied merely to the Bank 
 of England — and the general resolution adopted by all other 
 banks in Edinburgh. They were deaf to every argument, and 
 although no symptom, nor indeed threatening of violence 
 appeared, their noise, and the bustle they made, was intolerable; 
 
84 MEMOIRS OF A BANKING-HOUSE. 
 
 which may be readily believed when it is considered that they 
 were mostly of the lowest and most ignorant classes, such as 
 fishwomen, carmen, street-porters, and butchers' men, all bawl- 
 ing out at once for change, and jostling one another in their 
 endeavours who should get nearest to the table, behind which were 
 the cashier and ourselves endeavouring to pacify them as well as 
 we could. 
 
 Of our interest-receipts we were prompt in payment ; but 
 instead of giving our own circulating notes, as heretofore, we paid 
 the value in notes of the public banks, of which we had an ample 
 supply, and by doing this we were in our own minds satisfied 
 that we fulfilled every obligation, for the sums had been deposited 
 with us, not in specie, but in such notes as we now gave back to 
 the holders. With regard to our circulating notes the case was 
 different. And we felt the hardship on the holders, who were 
 deprived of the means of purchasing with ready money the neces- 
 saries of life, as there were no notes of less value than twenty 
 shillings, and it was with the utmost difficulty they could get 
 change anywhere else ; for the instant it was known that pay- 
 ments in specie were suspended, not a person would part with a 
 single shilling that they could keep, and the consequence was 
 that both gold and silver specie was hoarded up and instantly 
 disappeared. It was not the want of specie, therefore, that occa- 
 sioned the distress, but want of confidence, the same as had 
 occasioned the demands on the Bank of England and every other 
 banking society in the kingdom. Saturday was the day on which 
 we had the severest outcry to encounter ; for on that day we had 
 always been accustomed to the largest demands for silver to pay 
 wages, and our situation was then really distressing, as many 
 master tradesmen requested in the most earnest manner to have a 
 little silver for enabling them to pay their work-people. All we 
 could do, when sensible that their demand proceeded from real 
 necessity, was privately to change a note or twq by taking them 
 into a separate room, for we durst not do it openly in the counting- 
 house for fear of raising a riot. In this manner we contrived to 
 keep the people quiet for the first week or so ; in the course 
 of which many expedients were thought of ; among others, that of 
 issuing tallies of half a crown or five shillings value, which there 
 was every reason to beUeve would have been highly useful, and 
 most thankfully received by the public. But it was discovered 
 that the doing so was contrary to law, as the act of parliament 
 passed in the year 1764 for correcting the evil of notes for trifling 
 sums, with which the country had heea deluged, prohibited the 
 
MEMOIRS OF A BANKING-HOUSE. 85 
 
 issuing of any substitute for money of less value than twenty 
 sliillings.* 
 
 At length, a partial remedy was found. There chanced to be in 
 London at that time a great quantity of Spanish dollars, worth 
 about four shillings and sixpence each. On these a stamp was 
 affixed at the Mint, by government, which gave them a currency ; 
 and as every person issuing notes took care to obtain a supply of 
 these, they answered tolerably well the purpose of change. 
 Quarter guineas, too, were coined at the Mint ; and in a short time 
 an act of parliament was passed to permit such banking-companies 
 as had been in the practice of issuing circulating paper, to issue 
 notes of five shillings value during a limited time. Of this per- 
 mission, the Royal Bank and several country banks availed them- 
 selves ; and I have no doubt they were considerable profiters by 
 the measure. For as these notes mostly passed into places of the 
 lowest traffic, they soon became so torn and ragged that they 
 would scarcely hang together ; and many of them must doubtless 
 have been entirely destroyed, so as never to return for payment on 
 the issuers. We did not issue any notes of that description ; 
 being convinced that there was no real scarcity of specie in the 
 country, and that it would again make its appearance when the 
 panic should wear off, as actually proved to be the case. 
 
 In two or three months, when confidence seemed to be toler- 
 ably well restored, we began again to issue our notes of one 
 pound and upwards as formerly, and they were just as well 
 received as ever ; so that our circulation, which had diminished 
 greatly while we ceased to issue, again swelled to its former 
 amount. And it was matter of agreeable surprise to see in how 
 short a time, after the suspension of paying in specie, the run on 
 us ceased. Indeed, when the holders found they could not 
 succeed in obtaining payment in gold, they desisted from demand- 
 ing the value ; appearing to be equally well satisfied to retain our 
 promissory-notes bearing interest, instead of receiving the value in 
 circulating notes of the other banks, which bore no interest, and 
 for which they could no more get specie from them than from us. 
 It was remarkable, also, after the first surprise and alarm was over, 
 how quietly the country submitted, as they still do, to transact all 
 business by means of bank-notes, for which the issuers give no 
 specie as formerly. The wonder was the greater, because the act 
 
 * Some people adopted the ingenious method of tearing a twenty-shilling 
 note into halves or quarters, and paying them away accordingly ; and when such 
 were presented to ns, we always paid the value of the fragment without 
 hesitation. q 
 
86 
 
 MEMOIRS OP A BANKING-HOUSE. 
 
 of the Privy Council first, and afterwards the act of parliament, 
 applied merely, as I have already said, to the Bank of England, 
 while all other hanks, both in England and Scotland, were left to 
 caiTy on their business without any protection from parliament, 
 and without any means of obtaining specie beyond what the 
 natural course of business brought into their hands from the gold 
 circulating in the country. That source, however, has hitherto 
 proved amply sufficient for all needful purposes.* 
 
 From this time forward the business of our house went on, not 
 only with the utmost smoothness, but increased, along with that 
 wonderful extension of the commerce and manufactures of the 
 country of which I have already taken notice, and which, con- 
 trary to all former example, continued to swell as the war was 
 protracted. In this situation we continued steadily to adhere 
 to the genuine and salutary principles of banking business, by 
 employing our funds on cash-accounts and in discovmting bills 
 which we deemed safe, as far as the trade of this part of the 
 country required. Besides the sum employed on these pm-poses, 
 we made a large deposit in the two senior public banks of Edin- 
 burgh, which, although it yielded but a low interest, we yet judged 
 to be a necessary precaution, in order to guard against the effects 
 of any unforeseen emergency. Still further, we invested for the 
 same purpose at London a part of the money deposited with us in 
 Exchequer and Navy Bills, which, yielding an excellent interest, 
 were always an available resource against any unexpected demand, 
 while they were not subject to such accidental depreciations as the 
 other public funds. 
 
 It has been a rule with us, from which we have never departed, 
 to avoid everything that might be termed stock-jobbing, and for 
 that reason we never held any share in the loan raised annually 
 by government during the war. There was one species of govern- 
 
 * The forbearance of the Scottish people, and their confidence in the soKdity 
 of their hanks, has been such that no attempt has ever been made to enforce 
 payment in specie by legal process. Nor in England did I ever hear of its 
 being tried, except at Bury St Edmund's, where a Mr Grigby, holder of some 
 notes of the bank there of Messrs Oakes and Son, brought an action against 
 them in July 1801 for refusing to pay in specie. But as the bank of Bury St 
 Edmimd's had offered to pay him in notes of the Bank of England, which proved 
 that they were sufficiently provided with funds for the purpose, and as it 
 evidently appeared on the trial that the demand for gold was imnecessary, and 
 the action itself proceeded from malevolence, Mr Baron Hotham, the judge 
 before whom the action was brought, severely reprobated the plaintiff's conduct. 
 The point of law was left to be tried by the Court of King's Bench ; but I 
 never heard more of it, and probably the question was dropped, on being found 
 to be so unpopular. 
 
MEAIOIBS OF A BANKING-HOUSE. 87 
 
 ment securities, however, in ■which we invested some money 
 without scruple, from time to time, and that was in the fund 
 denominated Short Annuities. These had heen granted for a term 
 of years for money borrowed by government in the year [1778], 
 and they expire on the 5th January 1808, till which period they 
 are paid regularly every half-year, and this price was so low 
 during the war, that he who purchased them had an absolute 
 certainty of realising a very handsome profit at their termination. 
 
 Therefore, finding our money swell upon our hands beyond all 
 that we could employ in the ordinary purposes of our business, 
 and it being absolutely necessary to place the surplus so as to 
 yield us a fair return, as we were paying to our customers a con- 
 siderable interest, we purchased some of these short annuities 
 from time to time. Another public fund also presented itself, 
 which we considered might be held with safety and advantage. 
 The Chancellor of the Exchequer having resolved to convert a 
 portion of the Navy Bills into stock bearing interest at five per cent., 
 under the stipulation of redeeming it at par, if the holders should 
 demand their money, at the end of two years after the termination 
 of the war ; and, as we happened to hold a large sum of Navy Bills, 
 we of course became possessed of a considerable amount of this five 
 per cent, stock. Besides that stock, the holders of Navy Bills received 
 another portion of their value in four per cent, stock irredeemable, 
 but on such low terms, that, seeing no prospect of having occasion 
 to sell it till the return of peace, when, in all probability, it would 
 rise considerably in value, we resolved to take it also, and to keep 
 the whole, as well as some three per cents, which we ventured to 
 purchase at a very low rate. These purchases we did not consider 
 as any departure from our resolution of avoiding speculation in 
 government securities, because we never bought to the value of a 
 shilling without paying for it in money, nor even that, except when 
 we did not know how otherwise to employ our funds, after having 
 discounted every good bill that was offered to us. And we had 
 solid ground for deeming these investments as a source of consider- 
 able future profit, when it should please God to send us again the 
 blessing of peace — a profit of the certainty of which nothing could 
 disappoint us, except our being forced to part vniii the stock in the 
 interval, and of that there was very little probability, so well 
 fortified were we against any demands likely to happen by the 
 amount of our other resources to meet them, without being com- 
 pelled to break in upon our investment in the funds. 
 
 But there was another circumstance relating to these invest- 
 ments which now engaged our attention, and that was the con- 
 
00 MEMOIRS OF A BANKING-HOUSE. 
 
 sideration that if any of the partners should die before the return 
 of peace, there would be a degree of hardship if his family were 
 deprived of a share in the expected advantages to arise from them 
 on the war ceasing. 
 
 This consideration induced the partners, on the 17th May 
 1798, to enter into an agreement whereby they prolonged the 
 contract, which would otherwise have expired on the 31st 
 December 1799, to one year after the termination of the war, 
 during which prolonged period, if any of us should die, our interest 
 in the house should continue to our children to the same extent 
 as their father had enjoyed, but with a deduction of twenty per 
 cent, from the share of the net profit, as some compensation to the 
 surviving partners for the additional trouble they would be 
 subjected to by being deprived of their colleague's assistance. 
 
 On the 31st December 1799, the contract which we had 
 entered into with Sir John Hunter Blair terminated, when, of 
 course, his interest in the house came to an end, and we divided 
 the shares held by him, with the addition of two of mine, which 
 
 1 ceded to my son, in the following manner : namely. Sir W. 
 Forbes, 18; Mr John Hay, 11 ; Mr Samuel Anderson, 11 ; Mr 
 Lewis Hay, 4 ; Mr "William Forbes, 4 — in all, 48 parts. 
 
 In no long time after this arrangement, we had the misfortune 
 to lose our worthy friend and partner, Mr Lewis Hay, who, I 
 have strong reason to suspect, fell a martyr to his intense and per- 
 severing application to business. He had contracted a severe cold 
 towards the end of February 1800, which, however, did not 
 prevent him fi-om coming up stairs — for his dwelling-house was 
 under the same roof with the counting-house — to transact business 
 as usual, until Friday the 21st, when he did not come up in the 
 afternoon, a thing very uncommon with hira. From this time his 
 iOness increased, ending in inflammation of the lungs, and he died 
 on Friday the 28th February, leaving a widow and six young 
 children. He had married rather late in life, prevented, doubtless, 
 from thinking of it sooner from the peculiar situation of his affairs. 
 
 I have already expressed the high opinion I entertained of Mr 
 Hay's merits. In the whole of his conduct in life he was 
 methodical to a singular degree ; he was most exemplary in his 
 morals, and strict in the discharge of all the duties of external 
 religion, possessed of a high sense of honour, and the most 
 inflexible integrity. He was fond of reading, and was by no 
 means unacquainted with books, particularly those of a serious 
 cast ; and I remember my mother — who was very fond of Mr 
 Hay — used to interchange with him old-fashioned books of divinity, 
 
MKMOIKS OP A BANKING-HOUSE. 89 
 
 to which they both seemed partial. Although naturally grave in 
 his deportment, yet no man more delighted to unbend his mind 
 at table in the midst of a circle of select friends. But his 
 prevailing feature was application to business, from which he 
 never allowed any object whatever to withdraw his attention.* His 
 death, therefore, was a very great misfortune to us ; for, although 
 he very much left to his partners the general management of the 
 business of the house, yet we reaped much advantage from his 
 being constantly over the clerks, as well as from the exactness 
 with which he filled an essential department. Yet with all this 
 precision and method in the business of the house, he did not leave 
 behind him either a statement or a settlement of his own aifairs, 
 nor any nomination of guardians to his young family, so that an 
 application to the Court of Session became necessary. The court 
 appointed Mrs Hay, an excellent woman, and one of her relations, 
 along with three of us, to take care of them and their concerns. 
 Although he had not been many years in business, yet by the 
 prosperous state of our house, and his own and Mrs Hay's atten- 
 tion to economy, he left his children sufficiently well provided for. 
 The death of Sir John. Hunter Blair happened in May 1800 ; he 
 had always something peculiar and eccentric in his manner, which 
 gradually increased as he grew older, until at last he became totally 
 deprived of his reason, from which melancholy state he never 
 recovered. My partners and I continued desirous that some one 
 of our late worthy friend. Sir James Blair's sons, should become 
 interested in our house, of which he had been so conspicuous a 
 member ; and when we perceived that his eldest son would not 
 apply himself to business, the third son James — for the second son, 
 David, had by that time succeeded to his mother's estate of 
 Dunskey — was sent to Hamburgh, and having remained there a 
 considerable time, he returned to Edinburgh and entered our 
 counting-house, in order to qualify himself for being admitted a 
 
 * I recollect an incident which strongly marked this. Wlien his mother 
 died, he sent over the key of his desk to the counting-house, along with a 
 message, to tell us what had happened, and to say that he should be detained 
 an hour or so later than usnaL I went over immediately, and called on him, 
 and requested that he would not think of coming out until the funeral should 
 be over ; but I found him preparing to come to the counting-house. He was 
 conscious, he said, of having discharged his duty to liis mother whUe she 
 lived. He had given the necessary orders in preparation for the funeral, and 
 therefore he could not think of being absent from his duty to us. To those 
 who did not know him, this might have appeared a degree of heartless unconcern 
 on such an occasion ; but we, who knew him, considered it in its true light — as 
 a part of his uniform attention to the discharge of his duty in every station of 
 life. 
 
90 MEMOIRS OP A BANKING-HOUSE. 
 
 partner. The death of his eldest brother, however, having put 
 him in possession of Dunskey — in place of the next brother David 
 (now become Sir David), on the latter succeeding to the family 
 estate — ^he also gave over thoughts of being a man of business, and 
 ■withdrew from the counting-house. Still preserving our original 
 wish of having one of the family, if possible, as an associate, Sir 
 James's fifth son, Forbes Hunter Blair — Robert, the fourth, having 
 gone into the army — ^was sent for from Liverpool, where he had 
 been placed for the piirpose of mercantile education, and entered 
 our counting-house, with the view of being one day assumed a 
 partner.* 
 
 Feeling, as we did, the loss of Mr Lewis Hay, it became desir- 
 able for us to have a steady, useful partner in his place, who 
 should also occupy the residence attached to the counting-house ; 
 and w^e had no hesitation in making choice of Mr Patrick Maxton, 
 who had long been with us, and at that time filled the important 
 office of our first cashier. Mr Maxton had reached the middle 
 period of life, and had given ample proof of his fitness for the 
 trust. On the 11th August 1800, we admitted him as a partner 
 into the house during the continuance of our present contract, and 
 allotted to him the twenty per cent, received on the share of profits 
 belonging to Mr Hay's family, in terms of our agreement of 1798, 
 together with a further allowance, which should secure his having 
 not less than .£300 per annum. 
 
 At length, on the 1st October 1801, preliminaries of peace were 
 signed, and on the 27th March 1802, a definitive treaty of peace 
 was entered into between Great Britain and France, which ended 
 for a time the most bloody and destructive war that ever was waged 
 in Europe. The period was thus ascertained — ^namely, the 30th 
 June 1803 — at which otir contract of copartnery was to terminate, 
 and the interest in it of Mr Lewis Hay's family to cease. On the 
 cessation of the war, the expected rise in the public fiinds having 
 taken place, we were able to dispose of a considerable part of our 
 stock investments to great advantage. But we retained the short 
 annuities and five per cent, stock, conformably to our original inten- 
 tion, until the one shall expire, and the other come to the period 
 when it is to be paid off at par, two years after the conclusion of 
 the war. 
 
 Nothing further occurred in our house of any importance until 
 the year 1803, when our contract being about to terminate, we 
 
 • [Mr Forbes Hunter Blair contested the representation of Edinburgh, unsuc- 
 eessfully, with Mr Jeffrey and Mr Abercrombie, at the first election after tha 
 passing of the Keform Act in 1832. He died in 1833.] 
 
MEMOIRS OP A BANKING-HOrSE. 91 
 
 hare this day — 17th May 1803 — signed a new one, to commence 
 from the 30th June ensuing, and to last for ten and a half years, 
 namely, until the 31st December 1§13, by which the shares of the 
 house are now held as follow : Sir William Forbes, 1 7 ; Mr John 
 Hay, 11 ; Mr Samuel Anderson, 11; Mr William Forbes, 5; Mr 
 Patrick Maxton, 2 ; Mr Forbes Hunter Blair, 2 — in all, 48 shares. 
 The stock of the company, which in the former contract had been 
 stated at £9000, is by the new contract augmented to £24,000, as 
 a security to the public, along with the separate and aggregate 
 property of the partners, which is to no inconsiderable amount. 
 
 On this occasion I cannot help remarking the singular vicissi- 
 tudes of the present times. After the concluding of the Treaty of 
 Amiens, we certainly thought that we should have had an interval 
 of peace for some years ; yet in very little more than a twelve- 
 month, we find the nation again involved in a war with France, 
 of which no human being can foresee the event or the probable 
 termination. Yet let us not despond, but trust that the Almighty 
 Being, who has on many occasions so wonderfully preserved this 
 country, will still continue his protection, and in no long period 
 restore to us the blessings of peace. In the meantime, may we, 
 who are associated together in an important business, continue, by 
 the same harmony among ourselves, and the same unremitting 
 attention and prudence as heretofore, so to conduct the affairs of 
 our house, that, by the blessing of Divine Providence, it may still 
 prosper as it has hitherto done. 
 
93 
 
 MEMOIRS OP A BANKING-HOtrSE. 
 
 O 
 O 
 
 ra 
 
 BO ^ 
 
 6 'A 
 
 r 5 
 ■a H 
 
 <D o 
 
 I: 
 
 Ph 
 
 CO 
 
 fco 3 
 
 H 
 S PI 
 
 m - 
 
 a, d 
 
 CM -a 
 o 
 
 .S o 
 
 pq g 
 
 ° g 
 § 
 
 1= 
 
 PS 
 
 £40 
 
 39 15 6 
 
 273 1 3 
 
 12 
 
 699 8 4 
 
 1184 15 3 
 
 26 18 8 
 
 1943 8 8 
 
 1229 19 
 
 1 
 1 
 
 I— 1 T-H 1— ( rH 
 i-H 1— I 1— ( 1— ( i-H 
 
 1 
 
 a 
 
 5 
 
 ««SrHOCNQ0'*OOC0i-HOt-'*OC0 
 
 1— ( F-H CH 
 
 i-Hr-ti— t cHl— ( I-H I— t 1— t 
 
 (Noma>oc<500o^TtiootOTj<o5r-i 
 
 COiM-lrftOl:~rf'*l:~00-*-nOMr~C'5 
 
 0) 
 
 §§§§§§§§§§§§§§§§ 
 
 CDOOiOtOCO'-'^CCOCOOCOOOOt^COCO 
 
 ir-^ T*" »o CO co" oT CO CO CD ir^ »j:f CO »o oTiT-r rjT 
 
 lO-^COCO-^WiOlOlOTttCO-^-^COOOlT-* 
 
 §1 
 
 ■«! = 
 
 rH^I>eOlC^Oi-irO^OIr^i-lOOC5CO 
 rH I-H I-H »-H 
 
 ■^»CCOW001COOQO.HNNI>'OCOO 
 
 1— Ir— IrHi— II— Ip— t I-H rH 
 
 ^t-OtOrHQOt^COOiiOTtiOWiMcOOO 
 C0C0tNC0OCD0D»0(M'<*<i-HO>0C0(MC0 
 r^OOCNf-HOWSfNCOirst^COOIr-lOOSt^ 
 00 00 •*" CO rn" OO" rn" tH" O" t-^ t-^ CO (M" N CO CD" 
 fr^QOOO0J'-HOS<M-<fOlMl:^OiOI>'OO 
 
 ^6 
 
 SI 
 
 'n 
 
 M5 lOQOI>-N-<*OCiOrHCOt-rHCOrHC500 
 t— 1 
 
 OS OCOOSIr^lOOrHCSWSONi-HOOt^ClO 
 f-H 1— IrHp-H rHf-Hi-Hf— 1 rH 
 
 "<d^ PH 00 W5 05 CS CO W (N tH r-H 00 CO »0 '^ J>- f-H 
 
 lo CO t-- ■^ oj 00 TjH o 00 o rH OS r- r-H ub TjH r-- 
 
 CO CT) Oi CT) lO 00 !>■ CO IQ 00 -^ rH TfH CO 00 C5 O 
 
 ^" or« 00 o-or« c-« ^-« of 2 g"o o g 
 
 i 
 
 o oooo^t^oscocoooooiocooooo 
 
 rH ,— I ,— 1 ,-H rH 
 
 O CS'* O 00 00 CO coco rH t^O O t^-OO rH lO 
 
 rH rH ,-h rH rH rH i-^ 
 
 tH 1>0 00-^ CS CO O (M OW3 CO i-H rH « CO 0» 
 
 IQ 0SrHC0ast^C01CI>.(NC0»r30SrH(NOC0 
 O lOlOTfiCDN'^CNCNO C^CO "^1:^ ^S.^ 
 
 00 lOrH'oo rH CO 00 cT CO oTw" '<dT' CO 00 rf 00 oT 
 
 r~* W CO (N <M (N rH rH M rH (M CO CO CO O to 05 
 
 1= 
 
 < 
 
 CO rHOCDrHOCOOSt^COt^NWOCO'^CO 
 
 00 U5»OWOWCOOI>-a)rHI>.OirHrHl>CO 
 1^ t~i t-\ rH <-H rH i-^ 
 
 N Wiai>.COIr-rH00rH'^I>.-^OSQ0COl>.t>' 
 CO CO T(< OS CO CO O !>. lO O 00 O O O t^ CO CO 
 
 00 "^-^co^os^Tf (^^^oo^-;^co i>;rH^o^oo^i>^co c>i^ 
 
 CO lOI>'OOCZ300l^*Jr^OSOOOO(MCOOS-TtH|>' 
 Ct^ r~i i-{ 1-i T-\ i-\ 1^ i-{ 
 
 
 ^TH^-^lC5C01>.Q00sOrHC<IC0'<!t(l0C0t^000S 
 S icM cocococDCOcOlr^t>I>«t— Ir-t^t^t—t^t- 
 '^lr-43l>'t^l:^ir^C-ir-i>'i>-l>-t^t^t-i>'0'i>'l>' 
 
 -^^MrHrHF-HrHrHrHrHrHrHrHrHrHrHrHrHrH 
 
MEMOIRS OF A BANKING-HOUSE. 93 
 
 *»* Since the publication of the first edition, a letter written ^by Sir 
 William Forbes to his partners, Mr (afterwards Sir) John Hay and Mr 
 Samuel Anderson, has been put into the hands of the Editor, who finds 
 it to involve so exemplary an instance of commercial justice and 
 magnanimity, that he sought permission to place it before the pubUc. 
 
 To John Hay and Samuel Andeeson, Esqrs. 
 
 ' Bahiaskise, July 24, 1799. 
 
 ' Dear Sies^I wrote to Mr Hay the 20th, since which I have 
 not had the pleasure of hearing. Knowing how extremely 
 occupied you both are, it is exactly my wish that you should not 
 take the trouble of writing, or bestow the time on it, uselessly, 
 except when there is anything of moment to say. 
 
 'Since I came to the country, a thought has occurred to me, 
 which I have been turning in my mind, and which I now wish to 
 state for your consideration. It is, in regard to the prolongation 
 of our contract. The very peculiar circumstances of the times, 
 particularly with respect to our investment in the funds, made it 
 an expedient measure that, in the event of the death of any of 
 the partners, his interest should still continue in the house, not- 
 withstanding the clause in the contract which says it should cease 
 in such an event ; as it appeared to be a hardship that the family 
 of a deceasing partner should be subjected to the loss which 
 possibly might ensue, if the price of that investment should be 
 considerably under what the funds were bought at ; while, on the 
 other hand, there was reason to hope the price would rise in the 
 event of a peace. To continue the contract, therefore, seemed a 
 wise measure for us all ; but it was particularly so to me, who am 
 considerably the oldest of our number. But although it did then, 
 and still does appear to have been proper to do so, with regard to 
 our investment, there seems to be no reason why such an 
 alteration in the respective interests of the partners, with regard 
 to the general profits of the house, should not be made at the 
 1st January next, as would, in all probability, have taken place if 
 our present contract had been left to expire at that period. For, 
 surely, in framing a new contract, it would have been but equit- 
 able that the shares of the house should be more equally divided 
 than they are at present. Twelve years since the contract was 
 last made, have brought us much nearer to an equality than we 
 were at that period ; and as the whole load of the business, which 
 you manage with so much care, attention, and ability, may be 
 said to press entirely upon you two, it is no more than common 
 justice that your shares should be augmented, in order that you 
 may have a decent recompense for such uncommon labour. For 
 my own part, for a long time past I have been able to free you of 
 very little of the burthen ; and my health renders me now still more 
 incapable to take what used to be my ordinary share of the fatigue 
 and attendance. What I would propose, therefore, would be to 
 fix the shares of each partner, from the 1st January next, in such 
 
94 MEMOIKS OP A BANKING-HOUSE. 
 
 a manner as they would have been divided had we been framing 
 a new contract to commence at that period. With regard to our 
 investment in the funds, indeed, I shall be extremely glad that 
 our respective interests in it with regard to the ultimate profit or 
 loss, at the period to which we have prolonged the contract, shall 
 continue the same as they are at present. We have borne the 
 brunt of the battle together, and I hope we shall in due time reap 
 the fruits of the victory. But, with regard to the ordinary profits 
 arising from the estabhshed and regular business of the house, 
 we may throw these into such a division of shares at the 1st 
 January next, as would have been the case had we been framing 
 a new contract. What that division should be, we can talk of at 
 meeting. I merely state the principle to you at present, in order 
 that you may be reflecting on it, and considering in what way 
 the shares should be distributed. Those held at present by Sir 
 J. Blair will, of course, fall in to us when the contract expires > 
 and such a proportion may be left undisposed of, as was done on 
 a former occasion, as it may be thought right to reserve for his 
 brother, if, on a sufiicient trial, we shall judge him proper to be 
 assumed as a partner at some future period. I once thought, and 
 indeed it was what seemed to occur to us all, at the time of 
 prolonging the present contract, that the respective shares might 
 continue as they are at present till the end of the war ; but, as 
 that is yet a distant and still very uncertain period, although it is 
 the best possible for winding up our investment, if it please God 
 to continue to prosper us so as that we can hold it till then ; yet 
 there is no reason why the ordinary profits which, in so great 
 a degree, arise from your labour and exertions, should not be more 
 equally divided in the meantime than they are at present. I am 
 most grateful to Heaven that we have been so fortunate hitherto 
 in the prosecution of our business, and the uninterrupted harmony 
 that has subsisted among us, I consider as one of the greatest 
 blessings of my life ; and, therefore, I feel the stronger call on ine 
 to propose to do you the justice to which you are so fairly 
 entitled. That the same good-fortune, and the same harmony 
 may ever attend us, is the sincere prayer of, my dear friends, 
 
 Your most affectionate Bro', and very humble Serv', 
 
 William Fobbes. 
 
 John Hay and Samuel Anderson, Esqrs.' 
 
 Edinburgh : 
 Printed by W. and R. Chambers.