Today’s auction house artefact is this Leith Banking Company £20 note from 1825, issued to the payee James Ker.

James Ker of Blackshiels esq. was the general manager of the Leith Banking Co. and lived at a fine Georgian townhouse at no. 24 Royal Circus. His father, also James Ker of Blackshiels esq. had been one of the founding partners of the bank in 1793. The Kers were Jacobites and kept in the family’s possession an ornamental and incriminating drinking glass engraved with the royal cypher of James VIII of Scotland. Their predecessor, also James Ker of Blackshiels esq. had acted as a banker to Charles Edward Stuart, the “Bonny Prince” and had been financially ruined as a result. But clearly someone along the line had recovered the family fortune by the late 18th century.

So it’s rather unusual that a note made out to Ker is also signed on behalf of the bank by… Ker! As a director of the bank with which he held an account, he was fundamentally issuing his own pocket money (and that’s what it literally was, paper money that a gentleman could carry on his person)

At this time, banks issued notes to clients of sufficient standing on an individual basis, and the bank would number, sign and date every note by hand. This note has also been embossed with a 2 Shillings stamp, I’m not clear if this added or deducted that value to/from it .

And the engraving is a typical Leith scene, with a sailing ship entering the harbour. The “windmill” signal tower can be seen.

Bottom left is the mark of the engraver, John Beugo. Beugo is best known as the engraver of the portrait of Robert Burns by Alexander Naysmith. While mainly an artistic printmaker and engraver, he did turn his hands to banknotes, also doing work for the Commercial Bank of Scotland and British Linen Banks.

These notes were made on hard-wearing linen paper, which was produced in both Balerno and Penicuik (at mills both named “Bank Mill” for obvious reasons). Linen rags were a very important feedstock for the paper industry at this time (it’s where rag merchants made their money) When you presented your note at the bank, it would be honoured. Deductions could be made from it, and interest or dividends paid on it, this was all noted down (by official stamp and by hand) on the back.

These rather plain notes were promissory notes issued to the gentlemen of means that were customers of the bank. General notes of a fancier design were also issued. In 1822 the Leith Bank issued the world’s first commemorative note to mark the arrival of King George IV. The main image was based on Alexander Carse’s painting, which hangs in the Trinity House in Leith.

Two interesting features on this note. Firstly, at this time the Leith motto of “Persevere” was not in official use, instead the Latin “O Felicem Diem” just means “oh happy day!” in reference to George IV’s visit. And bottom left, “Fàilte don Rìgh“; “Welcome to the King!” I understand that this was the earliest use of Gaelic on a Scottish banknote; the Caledonian Banking Company did not open until 1836 and used “Tir Nam Beann, Nan Gleann, S’Nan Gaisgeach“, or “Land of Mountains, Glens and Heroes“. Walter Scott is known to have been a customer of the bank (from signed cheques that he drew on it), and one wonders if it was his influence on them that stimulated this romantic highland nostalgia in a lowland organisation.

Anyhoo, the Leith Banking Company was established in 1793 by 18 merchants of Edinburgh and Leith, who were its partners. It was based in Quality Street . Here we see James Ker (senior) was the original manager. Pattison and Pillans were two of the more prominent merchants in Leith.

In 1805 it moved from Quality Street to a purpose-built headquarters office in the style of the day, the architect was John Paterson (see also Seafield Baths).

At this time, this was one of only 3 banks in Leith; the other two being the British Linen Company and the Commercial Banking Company of Scotland. All were established very close to each other in the commercial centre of the town, set amongst its finest buildings. The Leith Bank as it was known, prospered for a while, and extended branches to the bright lights of Callander, Dalkeith, Galashiels, Langholm and Carlisle. It had an agent in Glasgow and a travelling tent that visited provincial cattle and agricultural marts.

The Lloyds Bank archives note that the Carlisle branch was registered as an English bank but was illegal according to an Act which forbade English provincial banks from having more than 6 partners! Trouble was brewing though, and the recession brought on by the “Panic of 1837” hit the bank’s business hard. The Glasgow Union Bank offered to buy it out but this was declined.

The bank soldiered on for a few more years until in 1842 it failed after a run caused debts of £123,582, including £10,000 of Leith notes in circulation. According to newspaper reports of the time:

It was a very old established concern, but the business seems to have been dwindling away for some years, so that it has lately been considered of very little importance. The explanation which it is said has been given is, that one of the shareholders having retired from the concern, took the precaution of advertising his retirement in the newspapers, and that the depositors having taken alarm at this, a run on the bank commenced, and continued till it was deemed advisable to wind up its affairs

Devizes and Wiltshire Gazette, April 28th 1842

A further report stated that the partners possessed sufficient funds to pay all creditors and that “the public [were] not likely to lose any thing” and that after winding up the partners were left “a reversion, a handsome one, we trust to themselves.” The remains of the bank were taken over by the Clydesdale Bank, and its former office on Bernard Street was sold off to became a branch of the National Bank of Scotland.

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Footnote – in the archives of the Royal Bank of Scotland, there is something called the “spike file”. This is the sequential record (file) of the payment of promisory notes by the Drummonds Bank from 1781. When a client presented their bank note, the clerk would check their account balance, debit the relevant amount and cancel the bank note (the promisory notes were single use only) by defacing it, with a punch or cutting off a corner. It was then “filed” on a giant iron spike

The spike was retained as a record in case there was any quibble over payment, you could always go back to it and retrieve the note, on which the date and details of its payment would have been written by the clerk. The Drummonds’ spike got “filed” in a basement cupboard and forgotten about, which was then later walled up and forgotten about a bit more until recovered during renovations centuries later by which time the owner was the Royal Bank of Scotland.

And to bring us back round in a circle, Andrew Drummond of Drummond’s Bank was an Edinburgh goldsmith and financier who later established a bank under his name in London. Like the Kers, the Drummonds were Jacobites; his father was outlawed in 1690 for supporting James II, his brother died at Culloden.

The (Andrew) Drummonds were not the same as the (George) Drummonds who were – appropriately – Hanoverians, supporters of King George. It is George Drummond for whom Drummond Place and Drummond Street in Edinburgh are named. George Drummond was a government loyalist who helped negotiate the Act of Union, was a 6-term Lord Provost of Edinburgh, a driving force behind the New Town and other public works of the “Modern Athens” such as the North Bridge and Royal Exchange – and ironically one of the founders of the Royal Bank of Scotland.

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