Perth Banking Company
The Perth Banking Company began business on 7th May 1787. In that same year, the old Perth United Banking Company went into voluntary liquidation.
The new bank was established by a contract of co-partnery. Co-partneries were bigger than simple partnership banks, having 13 or more partners. They were also founded for a specific trading period, frequently seven or 21 years. In reality though, the contract was often renewed on successful completion of the stated period.
In the case of the Perth Banking Company, the initial contract was for 21 years. The bank was set up with a capital of £34,000, divided into shares of £100. There were 99 partners, of whom 13 were elected as directors. Under the terms of the contract, none of the partners was allowed to own more than six shares (later increased to 12), or to own shares in any other bank.
The new bank also assumed responsibility for collecting in the notes of the Perth United Banking Company. The partners of the old bank paid to the new bank a sum equal to the value of the notes in circulation, minus 7 ½ %. This deduction was for the estimated value of notes which were lost, or would never be presented for other reasons. The whole process of note collection took almost 20 years!
In 1808, the contract came to the end of its term, and the Perth Banking Company went into voluntary liquidation. As was the custom for successful co-partneries, however, a further 21-year contract was drawn up. The bank's name was retained, along with a large number of the original partners.
This 'new' company had a capital of £66,000, in shares of £150, and 175 partners. It retained the agencies (branches) at Dunkeld, Coupar Angus and Newburgh, and established new ones in Auchtermuchty (1814), Inverness (1816) and Crieff (1818). The Inverness agency was closed ten years later, however, as it proved to be unprofitable.
The third and last Perth Banking Company was again established as a 21-year co-partnery, but with an option to extend. Nine of the 13 directors of the new bank had also been directors of the old. Existing branches were retained, and new ones opened at Aberfeldy, Auchterarder, Blairgowrie, Errol and Pitlochry. Sub-branches were established at Blair Atholl, Dunning, Killin and Kirkmichael.
By the time the contract was due to expire in 1850, the Bank Acts of 1844 and 1845 had been passed. These prohibited the establishment of any new note-issuing banks in Scotland. The partners therefore decided simply to extend the existing contract.
All three Perth Banking Companies had been highly successful, paying healthy dividends to their partners. This made the current bank an extremely attractive business proposition. Little wonder then that the Glasgow-based Union Bank of Scotland made an offer for the business in May 1857. This offer was accepted, and the takeover came into effect the following year. However, the links with the town of Perth were retained: a local committee of the Union Bank of Scotland continued to meet there for many years.
Return to the Bank of Scotland family tree.
- The History of the Union Bank of Scotland by Robert Rait (John Smith & Son Ltd., Glasgow, 1930), chapter 6.
- A small number of archives relating to the Perth Banking Company are held by Lloyds Banking Group Archives in Edinburgh - for further information see our archive collections.