Prior to the 1745 Rising Glasgow's merchants and manufacturers who required external finance had to rely upon other traders who would provide credit by discounting their bills. A small number were able to obtain cash credits (overdrafts) from the Edinburgh banks but, as there were no branches in Glasgow, these were difficult to obtain and to operate.
This situation changed in the 1750s when several groups of Glasgow merchants began to set up their own note issuing banks (Ship Bank 1750, Arms Bank 1750, Thistle Bank 1761 and Merchant Bank 1769). At first the Edinburgh-based Bank of Scotland and Royal Bank helped the fledgling Glasgow banks but soon this turned to outright hostility. This particular bank war ended when legislation was passed in 1765 to regularise the right to issue bank notes. Harmonious relationships between the banks were further helped by the setting up of a note exchange in the early 1770s.
The failure of the Ayr-based bank Douglas Heron & Co in 1772 was a major crisis for the Glasgow banks. They managed to weather the storm, but only after swallowing their pride and seeking assistance from the Edinburgh banks. The Royal Bank's attempts to capture a slice of Glasgow's banking business were, for the time being, unsuccessful.
The American War of Independence created major difficulties for Glasgow, its merchants and its banks, notably because of the loss of a large part of the tobacco trade (Glasgow's principle business). But, by that time, the economy of the city was becoming more diversified. The industrial revolution was under way.