Durham E-Theses English Banking in the Eighteenth Century: Bankers, merchants and the creation of the English nancial system TURNER, GARETH,DAVID How to cite: TURNER, GARETH,DAVID (2015) English Banking in the Eighteenth Century: Bankers, merchants and the creation of the English nancial system, Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/11297/ Use policy The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in Durham E-Theses • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult the full Durham E-Theses policy for further details. Academic Support Oce, Durham University, University Oce, Old Elvet, Durham DH1 3HP e-mail: [email protected] Tel: +44 0191 334 6107 http://etheses.dur.ac.uk 2 English Banking in the Eighteenth Century Bankers, merchants and the creation of the English financial system Gareth David Turner Submitted in partial fulfilment of a Master of Letters (MLitt) in Economic History Department of History, Durham University 2015 The eighteenth century marks the emergence of a genuine English banking system. However it is a period that has received comparatively little historical attention. This thesis seeks to provide an analysis of some of the key features of this system, especially the London banks that stood at its core. It also seeks to show how banking related to the contemporary economy. While banking is usually linked to the growth of industry, especially outside of the provinces, this thesis argues that a new approach is required, which takes into account the banks’ close relationship with England’s important commercial sector. English banking in the eighteenth century – bankers, merchants and the creation of the English financial system Contents Introduction: The paradox of the eighteenth century financial system ................................ 8 Chapter 1: The origins of English banking, c. 1660-1700: Revolution or Evolution? ............ 30 Chapter 2: London’s growth as a financial centre in the eighteenth century ...................... 49 I – London’s economy ................................................................................................... 52 II – International trade .................................................................................................. 55 III - Capital Markets ....................................................................................................... 58 IV – Banking .................................................................................................................. 67 Chapter 3: Bankers, merchant bankers and finance in the eighteenth century City ............ 76 Chapter 4: City banking in practice .................................................................................... 95 I – Barclays, Bevan, & Co ............................................................................................. 102 II - The London agency business .................................................................................. 108 Chapter 5: City Banking: Forster, Lubbock & Co ............................................................... 122 Chapter 6: West End banking .......................................................................................... 143 Chapter 7: The regional growth of provincial banking, 1700-1796 ................................... 170 Chapter 8: Provincial banking, industrial finance and economic growth: an historical argument reconsidered ................................................................................................... 194 Conclusion ...................................................................................................................... 212 Appendix......................................................................................................................... 214 Bibliography .................................................................................................................... 216 2 Tables Table 1: National Balance sheet of Great Britain .................................................................. 9 Table 2: Banking in seventeenth century London .............................................................. 32 Table 3: Profits attributable to the partners of Martin's Bank .......................................... 100 Table 4: Simplified balance sheets for selected City banks ............................................... 101 Table 5: Leading London agency houses in 1793 and 1802 .............................................. 113 Table 6: Non-London based customers of Messrs Lemon, Buller & Co, 1771-3 ................ 125 Table 7: Child’s Bank balances, 1690-1713 ...................................................................... 151 Table 8: Goslings balance sheet, 28 June 1794 ................................................................ 165 Table 9: Returns of Goslings Bank, 1786-1798 ................................................................. 168 Table 10: Number of banks by county, 1780 and 1800 .................................................... 179 Table 11: People per bank in 1781 and 1796 ................................................................... 184 Table 12: Distribution of banks by county economic characteristics I ............................... 187 Table 13: Distribution of banks by county economic characteristics II .............................. 188 Table 14: Leading provincial banking towns in 1796, with number of banks .................... 190 Table 15: Eighteenth century banks of Bristol .................................................................. 205 Table 16: Balance sheet and returns of the Bristol Old Bank, 1772-75 ............................. 208 3 Figures Figure 1; Official and current values of English exports in the eighteenth century.............. 12 Figure 2: Number of banks in London 1670-1797 .............................................................. 68 Figure 3: Growth of City and West End Banks, 1700-1800 ................................................. 70 Figure 4: London bank entries and exits, 1700-1800 .......................................................... 71 Figure 5: City banks, 1700-1800......................................................................................... 77 Figure 6: ‘Genealogy’ of some of the early City Banks ........................................................ 79 Figure 7: Barings’ Acceptance and other commission income, 1763-1803 ......................... 92 Figure 8: Barclays bank assets and liabilities, 1733-1798 ................................................. 104 Figure 9: Changes in overall liabilities of Barclay & Co, 1733-1798 ................................... 106 Figure 10: Cash and capital of Barclays bank in the eighteenth century ........................... 107 Figure 11: Account of Barings, Short, Hogg & Co with Gosling’s, 1781-1789 .................... 117 Figure 12: Account of Messrs Ellison & Co with Gosling’s, 1787-1789 .............................. 118 Figure 13: Balance of the Margate Bank with Esdaile & Co., 1785 to 1798 ....................... 119 Figure 14: Rolling 12 month remittals to and drafts on Esdaile & Co by the Margate Bank ....................................................................................................................................... 120 Figure 15: Tripp's balance of account and turnover with Drummond’s Bank, 1777 to 1783 ....................................................................................................................................... 149 Figure 16: Child & Co total assets, c. 1688-1797 .............................................................. 151 Figure 17: Child & Co simplified asset composition, 1690-1797 ....................................... 152 Figure 18: Child & Co assets and cash, 1754-1770 ........................................................... 153 Figure 19: Child & Co Income and profitability, 1757-1797 .............................................. 154 Figure 20: Child & Co House expenses, 1757-1797 .......................................................... 154 Figure 21: Drummond’s discounting activity, 1735-1750 ................................................. 157 Figure 22: Drummond’s lending activity, 1735-1795 ........................................................ 158 Figure 23: Drummond’s lending activity, 1749-1770 ........................................................ 159 Figure 24: Drummond & Co Total income and profits, 1749-1770 ................................... 159 Figure 25: Drummond’s Bank profitability, 1770-1795 ..................................................... 160 Figure 26: Goslings (Fowler, Rorke and Simpson) Profit and Loss in the 1720-30s ............ 162 Figure 27: Goslings Bank profits, 1737 to 1799 ................................................................ 163 Figure 28: Goslings Bank total assets/liabilities, 1786 to 1800 ......................................... 164 Figure 29: Goslings Bank asset composition, 1786-1800 .................................................. 166 Figure 30: Hoare & Co annual profits, 1720-1785 ...........................................................