Following the Act of Union, Scotland was permitted to trade with the British Colonies. Several Glasgow merchants amassed vast fortunes in this way. They concentrated on the tobacco trade, importing the commodity from America and then re-exporting it to Europe. These 'Tobacco Lords' invested their profits in a range of domestic business ventures, including banking.
The Thistle Bank was established in Glasgow, in 1761. It was the third private partnership bank to be set up in the city, after the Ship Bank (established 1749) and the Arms Bank (1750). Although the Bank's formal title was Maxwell, Ritchie & Company, it was commonly known as the Thistle Bank, due to the device it employed on its banknotes.
Of the six founding partners, five were tobacco merchants. Among these was John Glassford of Dougalston, already a founding partner in the Arms Bank. By the 1750s, Glassford had a fleet of 25 ships, and a turnover of £500,000 per year - about £44 million today. The other partners were Sir Walter Maxwell of Pollok (quickly succeeded by Sir John, and then Sir James Maxwell); James Ritchie of Busbie (also a founding partner in the Arms Bank); William Mure of Caldwell (who later became a Baron of the Exchequer); John McCall of Belvidere; and John Campbell of Clathic. Most of these were also major landowners, which is probably why the Thistle was sometimes known as the 'aristocratic bank'.
The original capital of the Thistle Bank was £7,000. But by 1763, when the first balance was struck, its note circulation had reached £64,000. Some three years later, its capital had grown to almost £12,000, through additions from surplus profits.
During the 1760s, a further eight provincial banks were established in the principal Scottish burghs. This was, in part, a response to the perceived lack of facilities provided by the principal Edinburgh banks, such as Bank of Scotland.
There was intense rivalry between the Thistle Bank and some of these new companies. The Bank's early history was characterised by 'note-picking' - i.e. employing agents to take the notes of other banks out of circulation, and replace them with Thistle notes. Given the chronic shortage of coin in Scotland, the benefits of this were twofold: the circulation of the aggressor's notes increased; and its competitors were put under intense pressure by agents demanding coin in exchange for their banknotes.
The Thistle Bank was quick to target the newly-formed Aberdeen Banking Company. This latter retaliated in kind, sparking a conflict which lasted almost two years. A report in the Glasgow Chronicle, from 1769, refers to one incident at the height of the struggle: 'the Bank of Aberdeen made a demand on the Thistle Bank of Glasgow for £41,000 sterling, which was immediately paid in gold and silver specie.'
The Thistle Bank continued to prosper until at least 1792. Business grew in all areas - deposits, cash account advances and discounting of bills. But the company records for the period after 1792 are very patchy. There would seem, however, to have been a general decline in the Bank's fortunes. In 1836, at the merger with the Glasgow Union Banking Company (forerunner of the Union Bank of Scotland), the surplus of assets over liabilities was just £5,000.