Hiya I'm Bruce Fummey. I've got a friend who thinks history is boring, and yet he loved 'The Outlaw King'.
History is intriguing, and it connects to the present.
If you think the history of Building Societies is boring, I'd say you don't know, but if I asked
you the oldest surviving Building Society, you would know it was Scottish, and you'd be right.
So let's start the story here. This was once a Roman Bath House on the Antonine Wall.
Romans didn't just bring baths to what we now call Scotland, they also brought
the idea of Mutual Societies. The thing is, being in the Roman Army could be a wee bit dangerous;
fighting Picts and Scots and stuff like that.
Around 100 BC, there was a bloke called Gaius Marius. He was a Roman General, who became Consul.
Fought Germanic tribes, Numidians, Teutones, you get the idea. Anyway, he reformed the legions,
and one of the things that he'd introduced was a burial club. You and your legionary pals chip in a
regular saving, and if in the course of the burny, looty, subdue the locals grind of everyday life
you ended up dead, then there would be money to ensure a proper burial.
Everyone puts in a little, folk get out bigger amounts from the common fund in a crisis.
Many a mickle (little) macks (makes) a muckle (large). It seems obvious now, but at the time it was revolutionary.
Scrub my back will ya! Scrub your own back, I'm not joining the Roman Army, what about me?
Now I'm glad you asked that. Revolutions happen throughout the centuries, but not all revolutions
are violent. The Royal Mile here in Edinburgh feels like the beating heart of the revolution that came
with the Scottish Enlightenment when Voltaire said, 'It's to Scotland that we look for our ideas of
civilisation. Adam Smith here built the foundations of modern economics. David Hume just up the street
built the foundations of modern philosophy. The Hunterian Museum in Glasgow shows how William
Hunter built the foundations of obstetrics, and it was his brother, John Hunter, he was the guy
who first named teeth, molars, premolars, bicuspids ... Now that might not seem important, but this was a
huge leap of imagination for a man living in a country where nobody actually had any teeth!
We Scots are used to telling anyone who'll listen about what the Scottish Enlightenment gave to
the world in philosophy, medicine, engineering, and economics, but to some extent, the Scottish
Building Society was given to Edinburgh by Birmingham. In the white heat of Enlightenment
thinking and Industrial Revolution, things were changing in the English industrial heartlands.
There was a new class of skilled tradesmen emerging and steel working and other crafts in the English
Midlands. They had income, but not the kind of wealth that would allow them to own property,
so they started to form clubs, a bit like the Roman soldiers had done hundreds of years before.
These clubs were set up in the taverns and coffee shops of Hanoverian Britain, in fact in 1775, just
as colonists in the Americas were gearing up for a revolution ... they'll come at a sticky end ...
a man called Richard Ketley, the landlord of the Golden Cross Inn in Birmingham, set up a club;
Ketley's Building Society. It was the first ever Building Society in the world. Members of the club
would save a regular amount, and they would draw lots to see who would receive club funds to have
land purchased, and a house built for them, and then the next guy, and then the next member, and so on.
When everyone had a house, then the club would be wound up. These were terminating Building Societies.
The last of these terminating Building Societies wound up in 1980. Now you're probably thinking, 200
years is a long time to sit in the same pub, waiting for a house, that guy definitely drew
the short straw, but it wasn't the same club, or the same pub for that matter, because soon there
were hundreds of these clubs. In 1837, the last of the Hanoverian Kings died, and Queen Victoria
came to the throne to replace him, and shortly after somebody said, hold on, why don't we bring
new members into our club to replace the people who leave? Somebody else said that's a belting idea,
and that's why the 1840s saw the beginning of Permanent Building Societies. At the start of
1848 two things happened; the California gold rush, saw people tumbling over each other in a
a dog, eat dog, grab what you can individualism, and Karl Marx published the Communist Manifesto.
Later that year, between these two extremes, the Edinburgh Friendly Property Investment Company was
set up, to provide a mutual company, where people could borrow and save, and over the longer term, own
their own homes. This was much more revolutionary for the people of Edinburgh than you might realise.
Think about it, a permanent mutual shared society where folks could put in savings
and borrow to buy property, and it was the people who saved and borrowed, that owned the society. It's
probably the kind of thing that the French would have loved in 1848, when they had their second
revolution, and put on the real life performance of Les Misérables. Ironic that the west end run of Les
Mis lasted five times as long, as a second French Republic. If Victor Hugo was alive today ... he'd
probably have a savings account with Edinburgh Friendly Property Investment Company. In 1929, they
changed the name again to simply, Scottish Building Society. That sounds good doesn't it? The Scottish
Building Society. Makes you feel kind of proud and warm inside doesn't it? It was meant to, it was a
reaction to the growth of English societies trying to expand into Scotland. You shall not
pass. Set up during the international upheaval, of the 1848 people's spring, the Scottish Building Society
went through Victoria's reign, industrial and imperial expansion, an explosion of friendly
societies, that are no longer with us, the Crimean War, the Boer War, the First World War, the Stock
Market crash and Great Depression, English societies trying to muscle in, yet in the years of economic
challenge in the 1930s, the Scottish Building Society, doubled the value of its mortgage book,
but here's what I found really interesting; the first board meeting of the newly named
Scottish Building Society, took place here at 73 Hanover Street North in Edinburgh.
It's now a Mediterranean and Middle Eastern restaurant. Now that's not interesting, but
what's really interesting to me, is that mortgages were approved at that first meeting. Imagine if
today your mortgage application had to go to a meeting of the board? Squeaky bum time or what?
One of the loans that was approved at that first meeting, was for a two-bedroom flat here in Brougham
Street, Tolcross, and it cost 425 pounds! What 425! That's less than I paid for my last telly (TV).
Yet I couldn't afford one of these flats today. The only way that I'm going to see inside is in
one of those property programs, on my 425 pound telly! Here's the thing though, the guy that bought
the flat was a barman. That's like a normal person like me! At the board meeting in May 1929, mortgages
were awarded to a French Teacher, a Baker, an Engineer, two Sales Reps, a Gas Worker, a Bookkeeper
and a Compositor. Now I have no idea what a Compositor does, but they sound like normal people.
Over the previous hundred years, people had been rushing for gold,
striving for Communism, fighting a revolution, so that people of normal means could have property,
and all that time they just needed to open an account with the Scottish Building Society,
and here's the fantastic thing, it's still a club that you can join today. It continued through the
Second World War, rationing, mergers, acquisitions, mods, rockers, hippies, flower power, glam rock punk rock,
inflation, monetary crisis, endowment mortgages, deregulation, the 2008 financial crisis and most
important of all, the demutualisation trend of Building Societies becoming banks in the 1990s.
When every man and their dog wanted the sugar rush of demutualisation, the Scottish Building
Society continued on, adapted and grew, but all the time, has remained a membership organization
for folk that want to borrow and save with the only Building Society still based in Scotland