Editing History of Scotland (section)

===Beginnings of industrialisation===
{{Main|Economic history of Scotland}}
[[File:Former Head Office of the British Linen Bank, St. Andrew Square Edinburgh.jpg|thumb|upright=0.8|Former Head Office of the [[British Linen Bank]] in St Andrew Square, Edinburgh. Now offices of the Bank of Scotland.]]
With tariffs with England now abolished, the potential for trade for Scottish merchants was considerable. However, Scotland in 1750 was still a poor rural, agricultural society with a population of 1.3&nbsp;million.<ref>Henry Hamilton, ''An Economic History of Scotland in the Eighteenth Century'' (1963).</ref> Some progress was visible: agriculture in the Lowlands was steadily upgraded after 1700 and standards remained high.<ref>{{Cite book |last=Devine |first=Tom M. |title=The transformation of rural Scotland: social change and the agrarian economy, 1660–1815 |date=1994 |publisher=Edinburgh University Press |author-link=Tom Devine}}</ref> There were the sales of linen and cattle to England, the cash flows from military service, and the tobacco trade that was dominated by Glasgow [[Tobacco Lords]] after 1740.<ref>{{Citation |last=Robert |first=Joseph C. |title=The Tobacco Lords: A study of the Tobacco Merchants of Glasgow and their Activities |work=The Virginia Magazine of History and Biography |volume=84 |issue=1 |pages=100–102 |year=1976 |jstor=4248011}}</ref> Merchants who profited from the American trade began investing in leather, textiles, iron, coal, sugar, rope, sailcloth, glassworks, breweries, and soapworks, setting the foundations for the city's emergence as a leading industrial centre after 1815.<ref>{{Cite journal |last=Devine |first=Tom M. |author-link=Tom Devine |date=February 1976 |title=The Colonial Trades and Industrial Investment in Scotland, c. 1700–1815 |journal=Economic History Review |volume=29 |issue=1 |pages=1–13 |jstor=2594504 }}</ref> The tobacco trade collapsed during the American Revolution (1776–1783), when its sources were cut off by the British blockade of American ports. However, trade with the West Indies began to make up for the loss of the tobacco business,<ref name=Campbell1964pp469-77/> reflecting the British demand for sugar and the demand in the West Indies for herring and linen goods.<ref>{{Cite journal |last=Devine |first=Tom M. |author-link=Tom Devine |date=April 1978 |title=An Eighteenth-Century Business Élite: Glasgow-West India Merchants, c 1750–1815 |journal=Scottish Historical Review |volume=57 |issue=1 |pages=40–67}}</ref>

Linen was Scotland's premier industry in the 18th century and formed the basis for the later [[cotton]], [[jute]],<ref>Louise Miskell and C. A. Whatley, "'Juteopolis' in the Making: Linen and the Industrial Transformation of Dundee, c. 1820–1850", ''[[Textile History]]'', Autumn 1999, vol. 30 (2) pp. 176–198.</ref> and woollen industries.<ref>{{Cite journal |last=Durie |first=Alastair J. |year=1973 |title=The Markets for Scottish Linen, 1730–1775 |journal=The Scottish Historical Review |volume=52 |issue=153 |pages=30–49 |jstor=25528985}}</ref> Scottish industrial policy was made by the board of trustees for Fisheries and Manufactures in Scotland, which sought to build an economy complementary, not competitive, with England. Since England had woollens, this meant linen. Encouraged and subsidised by the Board of Trustees so it could compete with German products, merchant entrepreneurs became dominant in all stages of linen manufacturing and built up the market share of Scottish linens, especially in the American colonial market.<ref>Alastair Durie, "Imitation in Scottish Eighteenth-Century Textiles: The Drive to Establish the Manufacture of Osnaburg Linen", ''Journal of Design History'', 1993, vol. 6 (2), pp. 71–6.</ref> The British Linen Company, established in 1746, was the largest firm in the Scottish linen industry in the 18th century, exporting linen to England and America. As a joint-stock company, it had the right to raise funds through the issue of promissory notes or bonds. With its bonds functioning as bank notes, the company gradually moved into the business of lending and discounting to other linen manufacturers, and in the early 1770s banking became its main activity.<ref>C. A. Malcolm, ''The History of the British Linen Bank'' (1950).</ref> It joined the established Scottish banks such as the Bank of Scotland (Edinburgh, 1695) and the [[Royal Bank of Scotland]] (Edinburgh, 1727).<ref>R. Saville, ''Bank of Scotland: a History, 1695–1995'' (1996).</ref> Glasgow would soon follow and Scotland had a flourishing financial system by the end of the century. There were over 400 branches, amounting to one office per 7,000 people, double the level in England, where banks were also more heavily regulated. Historians have emphasised that the flexibility and dynamism of the Scottish banking system contributed significantly to the rapid development of the economy in the 19th century.<ref>M. J. Daunton, ''Progress and Poverty: An Economic and Social History of Britain 1700–1850'' (1995), p. 344.</ref><ref>{{Cite journal |last1=Cowen |first1=Tyler |last2=Kroszner |first2=Randall |year=1989 |title=Scottish Banking before 1845: A Model for Laissez-Faire? |journal=Journal of Money, Credit and Banking |volume=21 |issue=2 |pages=221–231 |jstor=1992370}}</ref>

German sociologist [[Max Weber]] mentioned Scottish Presbyterianism in ''[[The Protestant Ethic and the Spirit of Capitalism]]'' (1905), and many scholars argued that "this worldly asceticism" of Calvinism was integral to Scotland's rapid economic modernisation.<ref>Callum G. Brown, ''Religion and society in Scotland since 1707'' (1997), p. 178.</ref> More recent scholarship however emphasises other factors. These include technology transfers from England and the appeal of a highly mobile, low-cost labour-force for English investors like Richard Arkwright.<ref>{{Cite book |last=Devine |first=Tom M. |title=Scotland |date=2004 |work=The Cambridge Economic History of Modern Britain |editor-last=Floud |editor-first=Roderick |volume=1: Industrialisation, 1700-1860 |page=406 |author-link=Tom Devine |editor-last2=Johnson |editor-first2=Paul}}</ref> Scotland's natural resources in water power, black-band ironstone and coal were also important foundations for mechanised industry.<ref>{{Cite book |last=Finlay |first=Richard J. |title=Economy |date=2007 |work=Oxford Companion to Scottish History |page=198 |author-link=Richard J. Finlay}}</ref>