Two banks were established in Scotland by charter from the king; one the Bank of Scotland, in 1695; the other, the Royal Bank of Scotland, in 1727. These two banks have branches in most of the principal towns of Scotland; but as they never obtained any exclusive privileges, a multi- tude of private banks sprung up to dispute the business with them, and to divide its profits. This free competition among the banks, produced a new sort of bank loans, which has given celebrity to the Scotch system of banking. The Scotch Bankers, instead of confining themselves to the discount of mercantile paper, open what they call cash accounts;.
