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Money in the Western Legal TraditionMiddle Ages to Bretton Woods$
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David Fox and Wolfgang Ernst

Print publication date: 2016

Print ISBN-13: 9780198704744

Published to Oxford Scholarship Online: April 2016

DOI: 10.1093/acprof:oso/9780198704744.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 24 October 2021

Banknotes and their Vindication in Eighteenth-Century Scotland

Banknotes and their Vindication in Eighteenth-Century Scotland

(p.556) 25 Banknotes and their Vindication in Eighteenth-Century Scotland
Money in the Western Legal Tradition

Kenneth G. C. Reid

Oxford University Press

The first banknotes in Scotland were issued in 1695 following the incorporation of the Bank of Scotland and were an almost immediate success. A century later no fewer than 21 banks, mainly private, issued notes, and Scotland was awash with paper money. This proliferation of paper would hardly have been possible without a stable legal framework. In 1749, the case of Crawfurd v The Royal Bank considered, and settled, one of the key legal issues: whether the holder of a banknote took free from infirmities of title which affected those from whom it had been acquired. In the battle of doctrine against policy, Roman law was used as a proxy, with both sides calling on Digest texts and on the account of vindication in Voet’s Commentarius ad Pandectas. Victory for the Royal Bank was obtained only by re-characterizing a rule of bona fide consumption, by spending, as one of bona fide acquisition; and so with this flimsiest of doctrinal veneers, the free circulation of banknotes was assured.

Keywords:   legal history, bank notes, Scotland, paper money, Bank of Scotland, Lending and Borrowing Money, vindication, bills of exchange, David Hume, Adam Smith

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