On this day in 1728

Prior to 1728, it wasn’t possible to legally withdraw more money from a bank than you had in your account. That changed on the last day of May when the Royal Bank of Scotland devised the overdraft.

On that day, it allowed one of its customers, William Hogg, to withdraw £1000 that he hadn’t yet earned on the understanding that he would pay it back at a later date.

A financial game-changer

Lending unearned money is now the basis of the global financial system. It allows banks to keep back a small proportion of the total deposits they hold, and invest the rest in businesses, mortgages or loans.

When the debtors pay back the loan, they are charged a rate of interest so that, over time, they end up paying back more than they borrowed. This surplus represents the bank’s earnings. It can be kept by the bank as profit, re-lent, or paid to customers with a positive balance in their account in the form of credit interest.

 

...and on this day in 2014

Edinburgh’s first passenger-carrying trams ran on the last day of May 2014 on a 16-station line that ran between York Place and Edinburgh Airport. This was the city’s second tram service, the first having been shut down in the 1950s. Edinburgh’s very earliest trams had been horse-drawn. These were replaced by cable-driven, and eventually electric equivalents.

Lengthy construction phase

The 2014 system had been under construction for seven years, with initial plans being signed off in 2007 and preliminary work getting underway later that year. The first parts of the track were laid in 2008 and several electrical substations were built at the same time to provide the necessary power. There were several delays and disagreements between the contractor and the delivery body, and the project started to run behind schedule. However, the first tram tests were conducted in 2011, almost three years before the service went into commercial operation.

In 2019, approval was given for an extension to Newhaven. Proposals for additional extensions would, if put into motion, see the network extended yet further to include a branch to Newbridge North and a loop via Princes Street, Port of Leith, Crewe Toll and Haymarket.