In 1745 Bonnie Prince Charlie landed in Scotland, raised an army of Jacobite supporters and marched into Edinburgh. Once there, they called upon the Royal Bank to pay gold in exchange for thousands of pounds’ worth of its notes. With this gold, they funded their march on into England, reaching Derby before being turned back. The Rising finally came to a bloody end on the battlefield of Culloden the following year. The Royal Bank, though severely strained by the experience, had survived its first major challenge.
Though underlying tensions remained alive in Scotland, later decades saw less open conflict. Scotland’s prosperity grew, and Edinburgh became one of the key hotspots of the European Enlightenment. Local luminaries such as Adam Smith, David Hume, Henry Raeburn and James Hutton led Enlightenment thought in their respective fields, and all were friends or customers of The Royal Bank of Scotland.
Meanwhile, the rivalry between Scotland’s two oldest banks was altered by the arrival of new competitors; first the British Linen Company in 1746, and then others based in Glasgow, Aberdeen, Dundee and other major towns and cities across the country. Scotland was beginning to develop its famous ‘multi-bank system’; a well-balanced network of successful, competitive banks. This created a more stable financial system than that in England, where the Bank of England’s monopoly dominated the sector, forcing other banks to remain small, local and vulnerable to adverse conditions.