Clydesdale Bank

ends over 160 years service in Penicuik

notes from an exhibition held at the Cowan Institute: Penicuik Town Hall 14 & 21 January 2006

Early years

In Penicuik’s early days, the town’s papermills conducted their business banking in Edinburgh, and the British Linen Company banked for Cowan mills at Valleyfield and elsewhere. The businesses had a long association, standing by one another in the panic of 1826, and had once shared rooms at Moray House, the Cowan family’s town house.

But the first known Branch bank here in Penicuik was the Edinburgh and Leith Bank, which set up in about 1839 with James Symington as its Bank Agent. It was a time of great change in Scotland, with railways projected and fine new buildings being constructed.

Soon, mergers with the Southern Bank of Scotland (1840) and The Glasgow Joint Stock Bank (1844) gave Edinburgh & Leith new branches from the Clyde to Newton Stewart, and its name changed to the Edinburgh & Glasgow Bank. And John Paterson, a man of great vigour and public spirit, replaced Symington as the bank’s Penicuik Agent.

Troubled times

But all was not well at the Edinburgh and Glasgow Bank. The 1840s had seen rapid expansion and development and in 1846 the bank’s head office had given large advances in railway shares. A year later came the serious collapse of the railway mania and the Edinburgh and Glasgow Bank found itself caught up in difficulties from which, although it struggled to survive for the next ten years, it never really recovered. In 1853 an arrangement was reached between the Clydesdale Bank and the Edinburgh and Glasgow. This would have given some security to the beleaguered bank, but it came to nothing as further losses were uncovered in Edinburgh.

Between 1853 and 1857 the Edinburgh and Glasgow tried to link itself with others including the City of Glasgow Bank and the Western Bank. But they too were struggling and unable to help.

The Edinburgh and Glasgow’s reserves were vanishing fast. One of its particular difficulties lay with money it had advanced to the Bank of Australia.

The depression of 1857 in Britain and America caused such financial strain that the Bank of England was threatened and many smaller banks had to close. In Glasgow the Western Bank failed amid great consternation in February 1858, and the Bank of Scotland had to step in with a rescue package.

The financial jitters spread. With the Edinburgh and Glasgow posting a loss of £350,000 at the end of 1857, its shares fluctuated, deposits dwindled and the end was in sight when the Clydesdale Bank agreed to take over the business in June 1858. The Edinburgh and Glasgow showed a deficit and the more secure Clydesdale simply relieved it of its liabilities.

The Clydesdale Bank did not suffer in any way by making this takeover. The Edinburgh and Glasgow Bank's business —apart from its unlucky inheritance— was sound. Of its 27 offices, with twin headquarters in Glasgow and Edinburgh, the Clydesdale took over 19. The Penicuik office, with John Paterson still here as Bank Agent, was one of them.

The Clydesdale Bank was one of Scotland’s more successful and solid financial institutions. Like the Commercial Bank of Scotland, it weathered the storms of the late 1850s without mishap, and it was well set when banking troubles began again in the late 1870s. This time the City of Glasgow was the bank heading for disaster, after its directors were found to have falsified the accounts. It had invested in overpriced American railroad stocks, and hundreds of shareholders in the Scottish business community found themselves obliged to pay its debts –Charles Cowan of Penicuik was one of them. The City of Glasgow Bank liquidator, John Cameron, steered it safely into the hands of the Clydesdale in 1878, and further losses were averted. For the Cowan family, John Cameron, and the Clydesdale Bank, confidence in American investments was restored by the steadfast perspective of their own advisers, William John Menzies and John Stewart Kennedy. One each side of the Atlantic, these were the Scots who found the money to develop the American West.

Changes in Penicuik

Meanwhile, at the Penicuik branch in John Street, John Paterson died in 1878, leaving his widow Margaret, grown-up daughters Isabella, Margaret and Ellen, and grandson Lawson Ramage in the household. The Clydesdale directors appointed 27 year old John James Wilson to take over as Agent –his family ran the grocery and ironmongery store, and he was a near cousin of Penicuik’s young C.T.R. Wilson, later known as the inventor of the cloud chamber, "the most original and wonderful instrument in scientific history" according to Ernest Rutherford. C.T.R. later took the Nobel Prize for Physics. But it was John J. of the Clydesdale Bank who was to write The Annals of Penicuik.

John Wilson, Clydesdale Bank Agent, Penicuik

Its Edinburgh & Leith Bank antecedents gave the Clydesdale firm roots in Midlothian with a keen understanding of local identity and a pride in its scientific advances. Papermaker Julius Beilby, who headed the local board of directors, was an uncle of George Beilby the prominent scientist.

John J. Wilson’s colleague William Baird was the Clydesdale Bank agent in Portobello, and similarly published The Annals of Duddingston and Portobello in 1898. The two men kept in touch on matters of mutual historical interest.

John J. Wilson died suddenly in Kelvingrove Park in 1904.

And the Clydesdale? After backing a succession of major projects a hundred years ago like the British Aluminium Company at Kinlochleven, it was bought by Midland Bank at the end of the First War, and later amalgamated with the Aberdeen-based North of Scotland Bank.

A hundred years of progress

For nearly a century, the Clydesdale Bank had a reputation as an innovator in banking with many firsts to its credit:

1899 - First Scottish bank to introduce adding machines

1948 - First British bank to have mobile branches

1958 - First Scottish bank to advertise on television

1958 - First Scottish bank to introduce personal loans

1966 - First Scottish bank to have cheque guarantee cards

1971 - First British bank to put security cameras in branches

1978 - First British branches with computer teller terminals

The Dounreay Fast Breeder Reactor –opened in 1959- inspired the Clydesdale Bank’s logo.

Clydesdale’s first rivals in Penicuik

In Penicuik, the Clydesdale Bank’s longstanding rival was the Commercial Bank of Scotland, which arrived early in the 1900s.

In the 1960s the Commercial merged, first with the National as the National Commercial, which then in 1969 joined the old Royal Bank of Scotland to create Scotland’s largest bank.

The National Commercial Bank beside Jackson Street School

The second rival was the Edinburgh Savings Bank which arrived in John Street around 1950, later becoming the Trustee Savings Bank, TSB, and Lloyds TSB Scotland.

Last rites for Penicuik’s first bank

In 1987 the Clydesdale Bank became a wholly-owned subsidiary of Melbourne-based National Australia Bank. In the last five years the bank’s management have axed many of its long-established branches. Close the Bank? -Too right! The Penicuik bank closed its doors in January 2006, ending more than 160 years of tradition as the town’s main bank and a linked story of investment reaching round the world.