Page "History of Scotland" Paragraph 91

Linen was Scotland's premier industry in the 18th century and formed the basis for the later cotton, jute, and woollen industries.

Scottish industrial policy was made by the Board of Trustees for Fisheries and Manufactures in Scotland, which sought to build an economy complementary, not competitive, with England.

Since England had woollens, this meant linen.

Encouraged and subsidised by the Board of Trustees so it could compete with German products, merchant entrepreneurs became dominant in all stages of linen manufacturing and built up the market share of Scottish linens, especially in the American colonial market.

The British Linen Company, established in 1746, was the largest firm in the Scottish linen industry in the 18th century, exporting linen to England and America.

As a joint-stock company, it had the right to raise funds through the issue of promissory notes or bonds.

With its bonds functioning as bank notes, the company gradually moved into the business of lending and discounting to other linen manufacturers, and in the early 1770s banking became its main activity.

It joined the established Scottish banks such as the Bank of Scotland ( Edinburgh, 1695 ) and the Royal Bank of Scotland ( Edinburgh, 1727 ).

Glasgow would soon follow and Scotland had a flourishing financial system by the end of the century.

There were over 400 branches, amounting to one office per 7000 people, double the level in England, where banks were also more heavily regulated.

Historians have emphasised that the flexibility and dynamism of the Scottish banking system contributed significantly to the rapid development of the economy in the 19th century.