THE ORGANIZATION AND PRACTICE OF BANKING IN CORNWALL, 1771-1922 MOTIVATIONS AND OBJECTIVES OF CORNISH BANKERS Submitted by John William Dirring to the University of Exeter as a thesis for the degree of Doctor of Philosophy in Cornish Studies, May 2015 This thesis is available for Library use on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement I certify that all material in this thesis which is not my own work has been identified and that no material has previously been submitted and approved for the award of a degree by this or any other University [Signed] JOHN DIRRING 1 Abstract The subject of this study is the period of independent banking in Cornwall, from the formation of the Miners’ Bank in Truro in 1771 to the absorption of Dingley’s Launceston Bank by the National Provincial in 1922. Undertaken within the perspectives of the `New’ Cornish Studies, it aims to provide an assessment of the objectives, strategies, and operational decision- making of banking institutions in Cornwall. A comprehensive analytical narrative of their development forms the core of the study, building on the existing literature and augmented from a range of fragmentary primary and secondary sources, much of it from family archival papers. The nature of this material, and the general lack of quantitative financial data relating to individual institutions, has made a qualitative sociological approach the most appropriate. With the careers of individual bankers predominant, the narrative is also strongly biographical in content and emphasis. An analytical technique based on thick description has been used to enlarge upon the possibilities contained in the often meagre evidence. Both the historical narrative and the subsequent theoretical analysis are conducted from a standpoint situated within a Cornish bank; established in Geertzian fashion from the author’s own long commercial experience in a traditionally-minded business. This experience is aligned with that of contemporaneous writers on nineteenth-century banking practice. In similar manner, a theoretical standpoint within the contemporaneous sociological thought of Tönnies and Weber has been adopted, as being the most appropriate to the consideration of the forms of organization under investigation. From this standpoint, the analysis is projected forwards into the growing corporatism and branch expansion of the amalgamation era. This is undertaken through a game-theoretic evolutionary assessment of decision processes; and a consideration of the roles of path creation and path dependency in institutional development. 2 CONTENTS Abstract 2 Contents 3 List of Tables 8 List of Figures 10 Note on referencing 10 Acknowledgements 10 CHAPTER 1: Introduction and research objectives 11 1.1 Stability and uncertainty, continuity and change 11 1.2 Formulation and scope of overall research objectives 15 1.3 Standpoint and methodological approach 18 1.4 Spatial organization: the centre-periphery model 23 1.5 Permeable boundaries 24 1.6 Institutional scope 25 1.7 Periodization 26 1.8 Overall plan of the work 28 CHAPTER 2: Banking in Cornwall: sources, contexts and perspectives 30 2.1 Works relating to banking in Cornwall 30 2.1.1 Banks and banking personalities in Cornwall 30 2.1.2 Armstrong’s pioneering study 32 2.1.3 Episodes in Cornish banking history 33 2.1.4 Archival sources 36 2.2 Country banking: the wider context 37 2.2.1 Origins and development of country banking 37 2.2.2 The London agency system: integrating the regional approach 39 2.2.3 The relationships of banking and industry 42 2.2.4 The Bank of England in relation to Cornwall 47 3 2.2.5 Organizational and structural themes 48 2.3 Summary of chapter 2 49 CHAPTER 3: The social bases of commercial action 52 3.1 The rise of middle-class values 52 3.2 Exercise of a `higher’ initiative 59 3.3 The political dimension 61 3.4 The social construction of information: newspapers in society 62 3.5 Summary of chapter 3 64 CHAPTER 4: Theoretical perspectives 66 4.1 The nineteenth-century socioeconomic viewpoint 66 4.2 From familial relations to business organization 67 4.3 Will, authority, and organization 71 4.4 Individual determinism and fields of action 73 4.5 Organization typology and morphology 74 4.6 Networking and the social embeddedness of economic action 76 4.7 The pragmatic nature of decision-making processes 80 4.8 Negotiation and the resolution of conflict: game theory 82 4.9 Choice fields and trajectories 83 4.10 Path creation and dependency 85 4.11 The family firm in Cornish banking 87 4.12 Provenance and application of theory in this study 90 CHAPTER 5: Financial intermediation in the Cornish landscape 91 5.1 The layered landscape 91 5.1.1 Salient topographical features 93 5.1.2 Subjective impressions of topography and the socioeconomic landscape before 1820 94 5.1.3 Perspectives in the transactional landscape 97 5.1.4 Attitudes to bankruptcy, business failure and fraud 98 5.2 Dominance of dynastic family groupings 101 5.3 Commercial power and control in the Cornish economy 108 4 5.4 The origins and development of banking: the wider context 111 5.4.1 Banking from above: the foundation of the Bank of England 111 5.4.2 Banking from below: local institutions from local needs 113 5.4.3 Entries into banking 115 5.4.4 Transactional functions in early banking 119 5.4.4.1 Transacting bills of exchange 119 5.4.4.2 Token and note issues 120 5.4.4.3 Deposits and social responsibility 122 5.4.5 A challenging environment 123 5.5 Introduction to the detailed historical narrative 123 CHAPTER 6: The laissez-faire age of the private partnership, 1771-1844 125 6.1 Individual pioneers: a multiplicity of small banks 125 6.1.1 Some entries and exits 128 6.2 Mining investment and the beginning of the Miners’ Bank 134 6.2.1 Financial structure of the mining industry 134 6.2.2 The early Miners’ Bank, 1771-1828 137 6.2.3 Partners as mining adventurers 146 6.2.4 The Miners’ Bank in Cornwall and London 150 6.2.5 Lemon, Buller, Furly, Lubbock & Co 152 6.2.6 Rodd, Willyams & Gould 155 6.2.7 Willyams, Williams & Co – and further changes 160 6.2.8 The settled family business 166 6.3 Landed capital and the Cornish Bank 168 6.3.1 Foundation of the Cornish Bank 168 6.3.1.1 Management and commercial ethos 174 6.3.1.2 The London connection 178 6.3.2 Development to 1870: Tweedy, Williams & Co 179 6.4 Merchant capital and the Bolitho family across Cornwall 186 6.4.1 Oxnam, Batten and Carne 186 6.4.2 The Penzance Union Bank 189 6.4.3 The Mount’s Bay Commercial Bank 190 5 6.4.4 The Coode family and the St. Austell Bank 193 6.4.5 The East Cornwall Bank 195 6.5 Reluctant bankers? The Foxes of Falmouth 199 6.6 Two brief studies in failure: the North Cornwall and Mevagissey Banks 205 6.6.1 Radical politics and banking: the North Cornwall Bank, 1811-1823 205 6.6.2 Caught by crisis, 1819-1825: the Mevagissey Bank 210 6.7 The maturing character of Cornish banking 213 6.7.1 The qualities and attributes of bankers 213 6.7.2 Social standing and management ethos 215 6.7.3 Partnership succession, continuity and expansion 217 CHAPTER 7: The emergence of joint-stock banking, 1832-1870 219 7.1 The legislation of 1826 219 7.2 The nature of joint-stock banking 222 7.3 The Devon & Cornwall Banking Company 225 7.4 The Western District Banking Company 227 7.5 The growth of regulatory and facilitating legislation, 1844-1860 230 7.5.1 The Bank Charter Act of 1844 232 7.5.2 The first extension of limited liability to financial services 234 7.6 Colonization by the London & South Western Bank 235 CHAPTER 8: Private banking in a corporatizing world, circa 1840-1879 247 8.1 The Launceston and Tavistock banks: natural growth and sustainable development in the Tamar Valley 247 8.2 New private banks in Cornwall in the 1860s 249 8.3 The West Cornwall Bank of John Michael Williams 251 8.4 The South Cornwall Bank and the Liskeard District Bank 253 8.5 Accountability and the failure of the St. Columb Bank 255 8.6 Declension of the old order in Helston 260 8.6.1 Early years of the Helston Union Bank 261 6 8.6.2 Rise and fall of the Helston Banking Company 262 8.6.3 The final years of the Helston Union Bank 263 8.7 The Redruth District Bank: a new private alternative? 266 8.8 The transition from private to joint-stock banking practice 268 CHAPTER 9: Limited liability, expansion and amalgamation, 1879-1922 271 9.1 The pivotal crisis of 1879: the failure of the Cornish Bank 272 9.2 Reconstitution of the Cornish Bank as a limited company 278 9.3 The wider adoption of limited liability 280 9.3.1 The Commercial Bank of Cornwall Limited 280 9.3.2 Other conversions to limited liability 281 9.3.2.1 Liskeard District to Western Counties Bank Ltd 281 9.3.2.2 The Devon & Cornwall Banking Company Ltd 282 9.3.3 The ignominious end of Batten & Carne’s Penzance Bank 282 9.4 Strategic branch expansion during the 1880s and 1890s 285 9.5 Amalgamation within Cornwall: the Consolidated Bank 288 9.6 Further expansion in Cornwall and absorption by outside interests, 1902-1922 291 9.6.1 Sometime partners, now Local Directors 293 9.6.2 The final phase of amalgamations, 1906-1922 295 9.6.3 The endgame of amalgamation: some characteristics 296 9.7 An overview of the spatial development of banking in Cornwall 298 CHAPTER 10: Concluding analysis: the evolutionary development of banking in Cornwall 304 10.1 Negotiation processes in private partnerships 304 10.1.1 Credit negotiations with clients 305 10.1.2 Negotiations within partnerships 310 10.1.3 Relations