Under the pen name of Malachi Malagrowther, Scott wrote "letters" — more accurately, short essays — defending the Scottish system of bank note issue. A banking crisis in England in 1825-26 led to a search for remedies, and some people argued that raising the minimum denomination of bank notes, then £1, would reduce the risk of future crises. Today, £1 is so little that there is no note for it, just a coin, but back then it was more than two week’s wages for many workers. Scott and other advocates of the £1 note pointed out that Scotland’s banking system had withstood the crisis much better than the more heavily regulated English system. They were successful in making their case: the British Parliament raised the minimum denomination of notes to £5 in England but kept it at £1 in Scotland. Although Scottish free banking ended in 1844, Scottish banks continued to issue notes under regulations that made them more or less Bank of England notes with distinctive designs. Fittingly, Sir Walter Scott’s portrait today adorns all notes issued by the Bank of Scotland.Today another Scotsman, Mr A. Smith, appears on the English £20 note. The first Scotsman to do so.
Saturday, 11 June 2011
Sir Walter Scott, advocate of free banking
They say you learn something new everyday. Well here is something I didn't know until today. This bit of somewhat useless information is from Kurt Schuler at the Free Banking blog; free banking counts among its advocates Scotland’s most famous novelist, Sir Walter Scott.