Ashes of the A's and U's, 1965

The Agreements and Understandings among the banks in Scotland, not-so-affectionately known as the A's and U's, had been in place since Victorian times. They were meant to preserve the stability of the Scottish banks by eliminating unsustainable cut-throat competition on prices. They had brought some benefit for customers by creating a system in which banks could only really compete on quality of service. By the mid-20th century, however, this was not good enough. Customers wanted to shop around on price as well as service, and the banks wanted to be able to distinguish themselves more clearly from rivals. Everyone was sick of the A's and U's.

Little surprise, then, that their abandonment was warmly welcomed on both sides of the bank counter. Bank workers met the news with a little off-colour humour, as demonstrated by this funeral urn. It contains the ashes of a document that was gone, but would not be missed.

A poem was composed to go with the ashes, comparing the A's and U's to various events and characters of history: more unbearable than a biblical plague; more rigid than the Ten Commandments; and more oppressive than William the Conqueror. The poem ends,

Now, gentlemen bold, my story is told

I've come to the end of my muse.

My poem, don't spurn;

For, in this fine urn,

Are the ashes of A's and U's.

The abolition of the A's and U's in 1965 was in tune with the mood of the period. Just six years later, the government published a white paper called Competition and Credit Control, encouraging banks to compete more actively, not only with each other but also with other kinds of financial institution. Banks began to offer new and different services. In 1960, a customer might have had a current account and a savings account with a bank. The interest rates and fees would be the same whichever Scottish bank provided the accounts. By the mid-1970s, in contrast, the same customer might still have his current and savings accounts, but also a bank-provided mortgage, home improvement loan, long-term savings plan and credit card. Banks could tailor their products for different markets, including offering a variety of fees and interest rates to appeal to different customers' requirements. Customers could shop around and choose the bank (or banks) that offered the best fit for their own particular needs.