Kinnears, Smiths and Company, Bankers

Collection consists of one bundle of documents relating to the failure of the bank, which includes a State of the Affairs of Messrs Kinnears, Smiths & Co., Bankers in Edinburgh.

Kinnears, Smiths and Company was formed in 1831 through the amalgamation of two private banks, Thomas Kinnear and Son (1748) and Donald Smith and Son (1773). Thomas Kinnear's original private banking firm was one of only 5 private banks to survive the crisis of 1772. Kinnear was also a director of Bank of Scotland.

Donald Smith was originally a partner of Johnston & Smith, a small private discounting firm established in c.1760 and which failed in 1772. Smith recommenced business as a private discounter and was very successful. He was Lord Provost of Edinburgh in 1807-08. His firm, Donald Smith and Son, was small, but by 1831, as a result of unrecoverable debts and bills due, it had amassed trading losses of over £35,500. Adding to their woes, part of Kinnears, Smiths and Co.'s assets were held in Bank of Scotland and British Linen Company shares, the value of which had declined by 30% between 1825 and 1834.

The chief cause of the failure of Kinnears, Smiths and Company, however, was the misconduct of James Smith, who incurred heavy losses. A brother of Donald Smith, one of the partners, James was the firm's stockbroker in London. He was employed to draw dividends on stocks belonging to Kinnears, Smiths and Company's customers. In order to do this, customers were obliged to grant to him their powers of attorney - including the power to sell. James Smith proceeded to speculate on his own account in 1833, largely on French rentes, and sold stocks of some customers in order to finance his investments. The political crisis in France caused rentes to fall enormously and ruined James Smith. As Kinnears, Smiths and Company were liable for him, they failed also.

Kinnears, Smiths and Company was ultimately forced to close in 1834 with liabilities in excess of £320,000. Of this, £175,000 were liquidated, leaving a shortfall of some £145,000. The partners at the time of failure were: George Kinnear, John Gardner Kinnear, Alexander Kinnear, Donald Smith, William Smith, George Smith and Robert Smith.

George Kinnear was later manager of one of the earliest banks in Sydney. He returned to Britain to become manager of the Huddersfield Bank, and finally manager of the Commercial Exchange Company in Glasgow which failed in the 1840s.

GB1830 KSC/1 - Papers re failure of Messrs Kinnears, Smiths & Co., Bankers in Edinburgh, 1834.

Access is by appointment only, and at the discretion of the Archivist. Closure periods apply to some records less than 100 years old. Please e-mail archives@lloydsbanking.com for further information.

Copying of material is permitted at the discretion of Lloyds Banking Group Archives.

No further accruals expected.

Related archive material in our collections includes:

• GB1830 BOS/2/1/4/5: Treasurer's Private letters. Includes letters re failure of Kinnears, Smith and Co. including request for an account with BoS and statement as to their position in July 1834, and re failure of R. Allan & Co.
• GB1830 BOS/2/6/3/12: Miscellaneous Business Papers 1811-1849. Includes Copy letters re Messrs Kinnears, Smith and Company's Estates, 1838
• GB1830 BOS/4/12/8/4: Edinburgh bonds supposed to have been paid or carried to fund for losses; Bonds of credit and correspondence relating to cash accounts at Edinburgh, 1823-1833. Includes No.3649 (Kinnears, Smith & Co.)
• Acc.2011/014/12/4 - Legal correspondence, including Book of letters from George Sandy, Bank of Scotland Solicitor, re Deed of General Conveyance granted to the Governor and Company of the Bank of Scotland by the various members of the firm of Kinnears, Smiths & Company, and by James Brown, Accountant, Trustee on their Sequestrated Estates, and letters of reply from said account holders, Dec 1834.

Records relating to the company may be found in the Court of Session Records held by National Records of Scotland:

• CS46/1834/8/35 Act confirming and decreet adjudging the real and personal estates of Messrs Kinnear Smith and Co as a company, and of John Gardiner Kinnear, George Kinnear, Donald Smith, Alexander Kinnear and William Smith as partners of that company and as individuals in favour of James Brown, trustee on their sequestrated estates, Aug 1834
• CS46/1834/12/52 Decreet discharging John Gardiner Kinnear, George Kinnear, Donald Smith and Alexander Kinnear, and William Smith of all debts contracted by them as individuals or as partners of the company carrying on business under the firm of Kinnear Smith and Co prior to 25 Jul 1834 except as to payment of the composition and exonering the trustee of his intromissions, Dec 1834

S. G. Checkland, Scottish Banking: A History, 1695-1973 (1975)

Andrew William Kerr, History of Banking in Scotland (London, 1926)

Richard Saville, Bank of Scotland, A History, 1695-1995 (Edinburgh, 1996)