Francis Baring
Encyclopedia
Sir Francis Baring, 1st Baronet (18 April 1740 – 12 September 1810) was an English merchant banker, later becoming the first of the Baring Baronets
. He was born at Larkbeare House
near Exeter
, son of John Baring
(1697–1748) and his wife, Elizabeth Baring née Vowler (1702–1766), daughter of a prosperous Exeter dry goods wholesaler (at that time called a grocer
). in 1762 Francis Baring, in partnership with his brother John, established the London
merchant house of John and Francis Baring Company, which by 1807 had evolved into Baring Brothers & Co.
. Despite being partially deaf from an early age, Francis did very well and, by the mid-1790s, had the full confidence of the British Parliament.
, where he became a leading wool manufacturer and textile merchant. His premature death in 1748 resulted in Francis, aged eight, being brought up and strongly influenced by his mother, Elizabeth. Her sound business head nearly doubled the family's worth by the time of her death in 1766.
In the early 1750s, Francis was sent to London for education at Mr Fargue's French school at Hoxton
and then at Mr Fuller's academy in Lothbury. Samuel Touchet, one of the leading Manchester and West Indian merchants in London, accepted him in 1755 for a seven-year apprenticeship, charging his mother £800. Upon his release on Christmas Day 1762, he joined his two surviving brothers in the interlocking partnerships of John and Francis Baring & Co. of London and John and Charles Baring & Co. of Exeter. Francis led the London concern and Charles the Exeter one, while John, a leading Exeter
citizen and a Member of Parliament
from 1776, was mainly a "sleeping partner" ("silent partner" in the U.S.), although nominally senior partner of both firms.
Notwithstanding these private reverses, the City of London
quickly recognized Baring's special qualities and in 1771 the Royal Exchange Assurance, a giant public business, appointed him to its court. He underpinned his directorship, which continued until 1780, with a holding of £820 in the company's stock, no mean sum when his assets totalled £13,000. This appointment was important to hold; for the first time he was marked out from the throng of merchants populating the courts and alleys of the City.
, Baring married Harriet Herring (1750–1804). Over the years she contributed about £20,000 to the family coffers, received from her merchant father, William Herring of Croydon, and a cousin, Thomas Herring
, Archbishop of Canterbury
. Her other contributions were her frugality in managing a household accommodated above the business and, between 1768 and 1787, a capacity to bear 10 children who attained adulthood. Later she emerged as a glittering social hostess, and introduced her husband to valuable business contacts. Harriet's sister Mary in 1766 married one of London's leading private bankers, Richard Stone of Martin & Co., with whom Francis Baring's firm had opened an account in 1764.
Baring's children included:
Baring's brother John remained a sleeping partner until his retirement in late 1800. In 1781 two nominal partners were appointed, J. F. Mesturas, formerly a clerk, and Charles Wall, who in September 1790 married Baring's eldest daughter, Harriet. The two were soon afterwards promoted full partners. However, Mesturas withdrew in 1795 and was not replaced. Thus from 1777 until his retirement in 1804, Baring led the firm almost singlehandedly, for many years having Wall as his sole active partner.
Annual profits rose to £40,000 in the 1790s and peaked, atypically, at over £200,000 in 1802; they were calculated after payment to partners at 4% interest, sometimes 5%, on their capital. Baring's share of the profits increased steadily from a quarter in the mid-1760s to a half from 1777 and to three-quarters from 1801. His total wealth, business as well as private, rose accordingly, from almost £5000 in 1763, to £64,000 in 1790, and to £500,000 in 1804.
, the West Indies, and, from the 1770s, North America
. They arose from trading on sole account or, more often, on joint account with other merchants; from acting as London agent for overseas merchants, buying and selling consignments, making and collecting payments, and arranging shipping and warehousing; and, in due course, from trade finance through making advances or, more frequently, accepting bills of exchange
.
The success of this work was greatly influenced by the establishment of a powerful network of corresponding houses in the main international trading centres. These alliances with leading European and North American merchants were the keys to his success.
Hope & Co.
of Amsterdam
, the most powerful merchant bank in Europe's leading financial centre, was Baring's most valuable connection. Their association is said to have begun in the 1760s, when Henry Hope
passed Baring some bills to negotiate and ended up ‘exceedingly struck with the transaction which bespoke not only great zeal and activity, but what was still more important … either good credit or great resources … From that day Baring became one of their principal friends’ (Barings archives, DEP249). The link was consolidated in other ways, in particular through the marriage in 1796 of Pierre César Labouchère [see under Hope family], a leading figure at Hopes, to Baring's third daughter, Dorothy.
Vital connections were also established on the other side of the Atlantic. Baring was quicker than most to see the commercial potential of Britain's North American colonies, and his finance house quickly emerged as the European hub of a network of North America
's most powerful merchants. In 1774 his first American customer was the leading Philadelphia merchant, Willing, Morris & Co.; its influential partners included Robert Morris
, a future financial architect of American independence from Britain, and Thomas Willing
, a future president of the Bank of the United States
. Through them Baring was introduced to Senator William Bingham
, one of America's wealthiest men, a connection which gave rise to several lucrative transactions.
connections. His brother John was elected to parliament as a member for Exeter in 1776; more importantly, in 1780 his sister, Elizabeth, married another MP and fellow Devonian, John Dunning
.
A rich and influential lawyer, Dunning was allied to Lord Shelburne
, a powerful Whig
politician who held progressive views on political economy and whose borough of Calne
Dunning represented in Parliament. In July 1782, following Shelburne's promotion to Prime Minister
and Dunning's appointment as Chancellor of the Duchy of Lancaster
, Baring fulfilled the new Prime Minister's need ‘to have recourse from time to time to mercantile advice’ (Barings archives, Northbrook MSS, B1). Baring, by instinct a Whig, became Shelburne's confidential adviser on commerce, or his ‘handy City man’, according to a discontented William Cobbett
. Baring's ideas on political economy and commerce were well ahead of his time; in 1799 he rightly defended the Bank of England
's decision (in 1797) to suspend specie payments as both correct and inevitable, in the face of hostile opposition from many of his peers.
Baring's knowledge of North American merchants and trade made him especially useful in the closing years of the American War of Independence when Shelburne, anxious for a liberal settlement, invited his comments on commercial aspects of the proposed peace treaty with the United States. Shelburne introduced Baring to Isaac Barré
, his paymaster-general, and to such leading luminaries as William Pitt the Younger
, Henry Dundas, Jeremy Bentham
, Edmund Burke
, Sir Samuel Romilly
, and Lords Erskine, Camden
and Sydney. However, Baring's friendship with Lord Lansdowne (as Shelburne became in 1784), Dunning, and Barré ran particularly deep, and in 1787 he drew public attention to it by commissioning their triple portrait from Sir Joshua Reynolds
. A private financial connection also existed. For six years from 1783 Baring loaned Lansdowne £5000, on security of a debt owing to Lansdowne. In 1805, on Lansdowne's death, Baring became a trustee of his estate, charged with the task of liquidating debts of £90,000.
Baring was not nearly as close to the Tory leader William Pitt, who followed Lansdowne as Prime Minister and who held office almost continuously until Baring's retirement from active business. Their views were far apart, and on Pitt's death Baring was quick to stress their lack of concurrence ‘on any great political question for above 20 years, our political opinions and principles being different’ (The Times, 6 Feb 1806). In particular he disagreed with Pitt's policy for the seemingly endless continuation of a wasteful war; they also suffered differences over government policy towards the East India Company
. Baring's personal influence in government waned but his expert advice, always fairly delivered, continued to be provided on such matters as trade with Turkey
, the importance of Gibraltar
, and the funding of the national debt. As part of Pitt's cleansing of abuse from public office, in 1784 he appointed Baring a commissioner charged with investigating fees, gratuities, and prerequisites for holding certain offices.
The link with Lansdowne led Baring to the Commons in 1784 when, at a cost of £3000, he was elected MP for Grampound
, Devon. He was ousted six years later, after which he stood unsuccessfully for Ilchester
. Later he sat for Lansdowne's safe boroughs of Chipping Wycombe, Buckinghamshire
(1794–6 and 1802–6), and Calne
, Wiltshire
(1796–1802), which had formerly been represented by other Lansdowne favourites, Dunning and Barré. Notwithstanding his admission that ‘my voice is so very unequal to the House of Commons
’ (Barings archives, Northbrook MSS, N4.4.295), his speeches were reckoned to be ‘neat, flowing and perspicuous, aiming more by solidity of argument to arrest and convince his hearers, than by beautiful figures and impassioned eloquence to mislead the minds of men’ (Daily Advertiser, Oracle and True Briton, 12 Oct 1805).
Both in private and from the benches, Baring advocated greater freedom of trade. ‘Every regulation’, he said, ‘is a restriction, and as such contrary to that freedom which I have held to be the first principle of the well being of commerce’, for good measure adding that a restriction, or regulation, may doubtless answer the particular purpose for which it is imposed, but as commerce is not a simple thing, but a thing of a thousand relations, what may be of profit in the particular, may be ruinous in general. (Public Characters, 1805, 34)
and Charles James Fox
, believing that ‘India
is not a colony and God forbid that it ever should be’ (Barings archives, Northbrook MSS, N4.5), but he worked with an old friend from the period of his apprenticeship and now a fellow director, Richard Atkinson, to modify and facilitate the acceptance of Pitt's India Act
. In 1792 and 1793, as Pitt's preferred candidate, he was elected chairman and charged with the task of renegotiating the company's charter.
The experience of his chairmanship was both exhausting and distracting. His private accounts went unwritten for two years and in 1792, ‘being obliged to travel for my health’ (Barings archives, DEP193.40), he was utterly unprepared for the collapse in prices of British government securities which reduced his private capital of £20,000 by half. ‘The more I work’, he confided to Lansdowne, ‘the greater the degree of jealousy and difficulty I have to encounter amongst the directors who are in general composed of either knaves or fools’ (ibid., DEP193.17.1). Pitt rewarded Baring with a Baronetcy
on 29 May 1793, and he soldiered on as a director until his death in 1810, but increasingly he was disillusioned and absent from the court. As early as 1798 he had lost ‘much of that consequence … which his superior knowledge, experience and abilities entitle him to’ (C. H. Philips, The East India Company, 1784–1834, 1940, 164).
introduced him to speculation on a grand scale. The two houses set about controlling the entire European cochineal market by secretly buying up all available stocks, one quarter for Barings and the rest for Hopes. Correspondents from Saint Petersburg
to Cadiz
spent £450,000 but prices remained static and in 1788, with a huge loss anticipated, the partners of Barings agreed ‘to forgo any participation of the profits of the trade for the last year’ (Barings archives, DEP193.40).
The resumption of war in 1793 provided new challenges and opportunities. The evacuation of Hopes to London between 1795 and 1803, when Amsterdam was occupied by France, and the availability of their expertise, contacts, and capital to Barings were of immense assistance. The two houses embarked on bold transactions—invariably with a quarter for Barings and the rest for Hopes. Their first adventure was entirely private and aimed to secure a substantial part of their capital from the dangers of European revolutions and wars. In late 1795 Baring dispatched his 22-year-old son, Alexander
, to Boston
to negotiate and execute the purchase of more than 1 million acres (4000 km²) of land in Maine
for £107,000. The investment was introduced by the land's owner, Senator William Bingham, son-in-law of Barings' Philadelphia correspondent, Thomas Willing, and yet another friend of Lansdowne. Francis Baring undertook the initial appraisal and commitment to the investment, and the negotiations were left to his son Alexander, who afterwards remained in North America as Barings' representative and who consolidated his position by marrying Bingham's eldest daughter, Ann Louisa. The link was further strengthened through the marriage of Baring's third son, Henry, to Bingham's other daughter, Maria, in 1802. Both marriages brought considerable wealth to the Baring family.
Britain's European allies needed funds and came to Baring who, with Hopes, now organized some of the first marketings of foreign bonds in London. Believing fervently that ‘it may be desirable not to have the subject to discuss with our own Ministers, as you know very well how ignorant they are of foreign finance’ (Barings archives, Northbrook MSS, A19), in 1801 he dispatched P. C. Labouchere of Hopes and his son George to negotiate a loan to the court of Lisbon. The resulting ‘Portuguese diamond loan’ of 13 million guilders was shared between Barings and Hopes on the usual 25:75 basis.
Of equal strategic importance was Baring's transmission of British government subsidies to allied governments to support their war efforts. This highly secret and sensitive work required expert knowledge of money transmission and a sound correspondent network; again it underlined the government's confidence in Baring. Opportunities for direct financing of the enemy were also presented to Baring, who knew he could hoodwink the government into consenting to them; ‘but to have obtained that licence we must have presented a memorial so equivocal and in truth so unfounded that it would not suit us and therefore was abandoned’ (Barings archives, DEP3.3.3, Francis Baring to Alexander Baring, 20 May 1799).
Baring applied a looser criterion in his choice of trading partners, however. Links with leading American merchants, such as the Codmans of Boston, Willing and Francis of Philadelphia, Robert Gilmour, and Robert Oliver & Brothers of Baltimore were now immensely important to Barings' business as its axis swung from continental European to transatlantic trade. In sustaining these extensive connections Baring undoubtedly facilitated, albeit passively, the breaching of Britain's continental blockade.
Considered to be an ‘English house of the first reputation and solidity’ (New York Historical Society, Rufus King MSS, vol. 55, fols. 378–9), Barings in 1803 was appointed London financial agent for the United States government, leaving Sir Francis Baring's influence in North American financial affairs unrivalled in London. At about this time, when a short interval of peace existed after the treaty of Amiens, Baring led his house, alongside Hopes, into its largest and most prestigious transaction yet, financing the Louisiana Purchase
. The French government wanted to sell 1000000 square miles (2,589,988.1 km²) of the Territory of Louisiana, and the United States administration wanted to buy it; the purchase price was $15 million and Francis Baring was charged with finding it. He sent his son Alexander to Paris to negotiate with French and American representatives, and the eventual result was that on behalf of the French government Barings and Hopes sold US government bonds worth $11.25 million. The business was of enormous size; ‘my nerves are equal to the operation’, Francis Baring reassured Hopes, but he added that ‘we all tremble about the magnitude of the American account’ (Barings archives, Northbrook MSS, A4). Later he confessed that ‘what I suffered can never be described and it completely overpowered my nerves for the first and I hope last time’ (ibid.).
The leading American house in London also acted as London banker for the Bank of the United States. Here again the close network of correspondents and friends which Baring so earnestly cultivated was vital. Thomas Willing
, William Bingham's father-in-law and Barings' client at Philadelphia since 1774, was the bank's president and so its use of Baring's firm in making London payments, undertaking exchange transactions, and providing credits was seemingly inevitable.
In 1803 Baring began his withdrawal from business when he gave up his entitlement to a share of his firm's profits. Much of his capital remained on loan; by the time of his death in 1810 he still provided £70,000 or about 17% of the firm's resources. He stood down as partner in 1804, handing the reins to Charles Wall, the ‘principal manager’ according to Farrington, and his three eldest sons, Thomas
, Alexander
, and Henry
. In recognition of their assumption of leadership, in 1807 the nameplate of Francis Baring & Co. was taken down and replaced by that of Baring Brothers & Co..
in Surrey
, based around Camden House, and in 1796 he bought Manor House
, Lee
, a relatively modest country house about six miles (10 km) south-east of central London, from his old friend Joseph Paice, for £20,000. Land in Buckinghamshire
was soon added at a cost of £16,000 and by 1800 his total investment in country estates exceeded £60,000. Yet more ambitious plans for life as a country landowner were fertilized; from 1801 he acquired from the Duke of Bedford
land and a great house, Stratton Park
, at Stratton in Hampshire
to create ‘the Kingdom of Stratton’ (Barings archives, Northbrook MSS, A21). By 1803 his expenditure had reached £150,000, partly funded through the sale of his Buckinghamshire land. In 1802 he transferred his London home from above his business in Devonshire Square to Hill Street in the West End.
The architect George Dance the Younger
was commissioned to remodel the house at Stratton, which was then filled with the finest furniture and best old masters. Baring's picture purchases had begun in 1795, when about £1500 was spent, and his expenditure grew apace after 1800; by 1808 he valued his acquisitions at £15,000. Dutch 17th-century masters were his particular passion but by 1804 he had ‘done with all except the very superior’; now only works by Rembrandt, Rubens, or Van Dyck ‘tempt me’ but ‘the first must not be too dark, nor the second indecent’ (Barings archives, Northbrook MSS, A4.3). He was a patron of Sir Thomas Lawrence
, whom he summoned to Stratton in 1806 to paint a magisterial triple portrait of Baring with his two senior partners as a memorial to his business achievement.
Otherwise, Baring's distractions from business were few. As chairman from 1803 to 1810 of the Patriotic Fund administered by Lloyds of London, he worked for the welfare of Britons wounded or bereaved during the French wars. The mercantile community sought his help as referee in settling disputes, and as a trustee he gave distinguished service in settling the affairs of the leading London merchants, Boyd, Benfield & Co., which had crashed in 1799. He held the presidency of the London Institution
from 1805 until his death. As a pamphleteer his output was modest, with works on the Commutation Act in 1786, on the Bank of England in 1797, and on the affairs of Walter Boyd in 1801.
Baring died, aged 70, on 12 September 1810 at Lee. His eldest son Thomas
succeeded to the Baronetcy
and inherited the country estates. The size of Baring's estate underlines his achievements. His wealth at death was £606,000, with £70,000 in company holdings. £175,000 was distributed among his children other than Thomas, who inherited the balance; his capital remaining in Baring Brothers & Co. amounted to almost £70,000; his Hampshire and Lee estates were valued at £400,000; and his pictures, jewels, and furniture were worth almost £30,000.
In the 25 years from 1777, Baring had transformed his firm into one of London's most powerful merchant banking houses; by about 1786 he reckoned that it was ‘in a very flourishing situation, totally divested of moonshine’ (Barings archives, DEP193.17.1, Baring to Shelburne, n.d.). By 1800 a network of influential correspondents stretched across Europe; agencies were held for leading Boston and Philadelphia merchants; leadership in marketing British government debt was undisputed; Baring was a respected adviser to senior politicians; his leadership in the East India Company had provided influence in trade east of Africa; and, not least, important commissions had been won from foreign governments. Francis Baring was Barings, and he dominated management, provided most of the capital, and received the lion's share of the profits.
Baring Baronets
There have been two Baronetcies created for members of the Baring family, one in the Baronetage of Great Britain and one in the Baronetage of the United Kingdom....
. He was born at Larkbeare House
Baring family properties
Baring family properties is a listing of significant properties in England that were purchased or developed by members of the Baring family, mostly during the period 1820-1890....
near Exeter
Exeter
Exeter is a historic city in Devon, England. It lies within the ceremonial county of Devon, of which it is the county town as well as the home of Devon County Council. Currently the administrative area has the status of a non-metropolitan district, and is therefore under the administration of the...
, son of John Baring
John Baring (1697–1748)
John Baring came to England in 1717 as a German immigrant, apprenticed to a wool merchant. His decision to settle permanently in England started the Baring family on the road to becoming one of the leading family banking firms in the world....
(1697–1748) and his wife, Elizabeth Baring née Vowler (1702–1766), daughter of a prosperous Exeter dry goods wholesaler (at that time called a grocer
Grocer
A grocer is a bulk seller of food. Beginning as early as the 14th century, a grocer was a dealer in comestible dry goods such as spices, pepper, sugar, and cocoa, tea and coffee...
). in 1762 Francis Baring, in partnership with his brother John, established the London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
merchant house of John and Francis Baring Company, which by 1807 had evolved into Baring Brothers & Co.
Barings Bank
Barings Bank was the oldest merchant bank in London until its collapse in 1995 after one of the bank's employees, Nick Leeson, lost £827 million due to speculative investing, primarily in futures contracts, at the bank's Singapore office.-History:-1762–1890:Barings Bank was founded in 1762 as the...
. Despite being partially deaf from an early age, Francis did very well and, by the mid-1790s, had the full confidence of the British Parliament.
Early life
Baring's father emigrated from Bremen, Germany in 1717 and settled at ExeterExeter
Exeter is a historic city in Devon, England. It lies within the ceremonial county of Devon, of which it is the county town as well as the home of Devon County Council. Currently the administrative area has the status of a non-metropolitan district, and is therefore under the administration of the...
, where he became a leading wool manufacturer and textile merchant. His premature death in 1748 resulted in Francis, aged eight, being brought up and strongly influenced by his mother, Elizabeth. Her sound business head nearly doubled the family's worth by the time of her death in 1766.
In the early 1750s, Francis was sent to London for education at Mr Fargue's French school at Hoxton
Hoxton
Hoxton is an area in the London Borough of Hackney, immediately north of the financial district of the City of London. The area of Hoxton is bordered by Regent's Canal on the north side, Wharf Road and City Road on the west, Old Street on the south, and Kingsland Road on the east.Hoxton is also a...
and then at Mr Fuller's academy in Lothbury. Samuel Touchet, one of the leading Manchester and West Indian merchants in London, accepted him in 1755 for a seven-year apprenticeship, charging his mother £800. Upon his release on Christmas Day 1762, he joined his two surviving brothers in the interlocking partnerships of John and Francis Baring & Co. of London and John and Charles Baring & Co. of Exeter. Francis led the London concern and Charles the Exeter one, while John, a leading Exeter
Exeter
Exeter is a historic city in Devon, England. It lies within the ceremonial county of Devon, of which it is the county town as well as the home of Devon County Council. Currently the administrative area has the status of a non-metropolitan district, and is therefore under the administration of the...
citizen and a Member of Parliament
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
from 1776, was mainly a "sleeping partner" ("silent partner" in the U.S.), although nominally senior partner of both firms.
John and Francis Baring Company
Initially, the London business comprised the accounts and goodwill transferred to it from an old family friend, Nathaniel Paice, a London merchant who was retiring, but also much business came from John and Charles Baring & Co. and other Exeter merchants who required a London agent. Agency services for overseas merchants and trading speculations were soon added. But the firm lost money in eight of its first fourteen years, as Francis Baring learned how to judge markets; having started out with £10,000 he reckoned that by 1777 his net worth stood at just £2500.Notwithstanding these private reverses, the City of London
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...
quickly recognized Baring's special qualities and in 1771 the Royal Exchange Assurance, a giant public business, appointed him to its court. He underpinned his directorship, which continued until 1780, with a holding of £820 in the company's stock, no mean sum when his assets totalled £13,000. This appointment was important to hold; for the first time he was marked out from the throng of merchants populating the courts and alleys of the City.
Family
On 12 May 1767, at CroydonCroydon
Croydon is a town in South London, England, located within the London Borough of Croydon to which it gives its name. It is situated south of Charing Cross...
, Baring married Harriet Herring (1750–1804). Over the years she contributed about £20,000 to the family coffers, received from her merchant father, William Herring of Croydon, and a cousin, Thomas Herring
Thomas Herring
Thomas Herring was Archbishop of Canterbury from 1747 to 1757.He was educated at Wisbech Grammar School and later Jesus College, Cambridge. At Cambridge, he was a contemporary of Matthew Hutton, who succeeded him in turn in each of his dioceses...
, Archbishop of Canterbury
Archbishop of Canterbury
The Archbishop of Canterbury is the senior bishop and principal leader of the Church of England, the symbolic head of the worldwide Anglican Communion, and the diocesan bishop of the Diocese of Canterbury. In his role as head of the Anglican Communion, the archbishop leads the third largest group...
. Her other contributions were her frugality in managing a household accommodated above the business and, between 1768 and 1787, a capacity to bear 10 children who attained adulthood. Later she emerged as a glittering social hostess, and introduced her husband to valuable business contacts. Harriet's sister Mary in 1766 married one of London's leading private bankers, Richard Stone of Martin & Co., with whom Francis Baring's firm had opened an account in 1764.
Baring's children included:
- ThomasSir Thomas Baring, 2nd BaronetSir Thomas Baring, 2nd Baronet , was a British banker and MP.He was the eldest son of Sir Francis Baring, 1st Baronet, founder of Barings Bank. His grandfather John Baring had emigrated from Germany and established the family in England. Thomas became a partner in Baring Brothers & Co. in 1804,...
(1772–1848) - AlexanderAlexander Baring, 1st Baron AshburtonAlexander Baring, 1st Baron Ashburton PC was a British politician and financier.-Background:Baring was the second son of Sir Francis Baring, 1st Baronet, and of Harriet, daughter of William Herring...
(1774–1848) - HenryHenry BaringHenry Baring , of Cromer Hall, Norfolk, was a British banker and politician. He was the third son of Sir Francis Baring, 1st Baronet, the founder of the family banking firm that grew into Barings Bank His grandfather John Baring emigrated from Germany and established the family in...
(1776–1848) - William (1780–1820)
- George (1781–1854)
- five daughters
Independence from Exeter
Baring's early business was constrained through the demands placed upon it by the much larger Exeter firm, which suffered under Charles Baring's speculations of a ‘wild, strange, incoherent description’ (Barings archives, Northbrook MSS, D1). The resulting conflict was only resolved in early 1777, when Baring took the initiative in dissolving the interlocking partnerships. Capital and management were now entirely separate, though Francis maintained strong family links with Exeter. Regularly he employed his wealth to rescue Charles from ruin and thus preserve the good name of his family; his motivation was an intense desire to see business and family prosper. Thus he was scandalized by Charles's ‘almost monstrous management of the original and chief dependence of the Baring family’ (ibid., D7).Baring's brother John remained a sleeping partner until his retirement in late 1800. In 1781 two nominal partners were appointed, J. F. Mesturas, formerly a clerk, and Charles Wall, who in September 1790 married Baring's eldest daughter, Harriet. The two were soon afterwards promoted full partners. However, Mesturas withdrew in 1795 and was not replaced. Thus from 1777 until his retirement in 1804, Baring led the firm almost singlehandedly, for many years having Wall as his sole active partner.
Financial success
The partnership capital grew steadily from £20,000 in 1777 to £70,000 in 1790. The next decade was to prove very profitable thanks to the fall of Amsterdam and the rise of London as centre of shipping trade, thanks to the French wartime bans on shipping in Amsterdam. Partnership capital peaked at £400,000 in 1804. Baring contributed the major share, providing 12% in 1777, 40% in 1790, and 54% in 1804.Annual profits rose to £40,000 in the 1790s and peaked, atypically, at over £200,000 in 1802; they were calculated after payment to partners at 4% interest, sometimes 5%, on their capital. Baring's share of the profits increased steadily from a quarter in the mid-1760s to a half from 1777 and to three-quarters from 1801. His total wealth, business as well as private, rose accordingly, from almost £5000 in 1763, to £64,000 in 1790, and to £500,000 in 1804.
Network
Early on Baring's business profits were derived mostly from international trade, especially between Britain, the western European coast, the Iberian peninsula, ItalyItaly
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, the West Indies, and, from the 1770s, North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. They arose from trading on sole account or, more often, on joint account with other merchants; from acting as London agent for overseas merchants, buying and selling consignments, making and collecting payments, and arranging shipping and warehousing; and, in due course, from trade finance through making advances or, more frequently, accepting bills of exchange
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. According to the Section 13 of the Negotiable Instruments Act, 1881 in India, a negotiable instrument means a promissory note, bill of exchange or cheque payable either...
.
The success of this work was greatly influenced by the establishment of a powerful network of corresponding houses in the main international trading centres. These alliances with leading European and North American merchants were the keys to his success.
Hope & Co.
Hope & Co.
Hope & Co. is the name of a famous Dutch bank that spanned two and a half centuries. Though the founders were Scotsmen, the bank was located in Amsterdam, and at the close of the 18th century it had offices in London as well.-Early days:...
of Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
, the most powerful merchant bank in Europe's leading financial centre, was Baring's most valuable connection. Their association is said to have begun in the 1760s, when Henry Hope
Henry Hope
Henry Hope was an Amsterdam merchant banker born in Boston, in Britain's Massachusetts Bay Colony in North America.-Early years:...
passed Baring some bills to negotiate and ended up ‘exceedingly struck with the transaction which bespoke not only great zeal and activity, but what was still more important … either good credit or great resources … From that day Baring became one of their principal friends’ (Barings archives, DEP249). The link was consolidated in other ways, in particular through the marriage in 1796 of Pierre César Labouchère [see under Hope family], a leading figure at Hopes, to Baring's third daughter, Dorothy.
Vital connections were also established on the other side of the Atlantic. Baring was quicker than most to see the commercial potential of Britain's North American colonies, and his finance house quickly emerged as the European hub of a network of North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
's most powerful merchants. In 1774 his first American customer was the leading Philadelphia merchant, Willing, Morris & Co.; its influential partners included Robert Morris
Robert Morris (merchant)
Robert Morris, Jr. was a British-born American merchant, and signer of the Declaration of Independence, the Articles of Confederation, and the United States Constitution...
, a future financial architect of American independence from Britain, and Thomas Willing
Thomas Willing
Thomas Willing was an American merchant and financier and a Delegate to the Continental Congress from Pennsylvania....
, a future president of the Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
. Through them Baring was introduced to Senator William Bingham
William Bingham
William Bingham was an American statesman from Philadelphia, Pennsylvania. He was a delegate for Pennsylvania to the Continental Congress from 1786 to 1788 and served in the United States Senate from 1795 to 1801...
, one of America's wealthiest men, a connection which gave rise to several lucrative transactions.
Government adviser
Baring's work from 1782 as an adviser on commercial matters to cabinet ministers propelled him from relative obscurity to the inner circles of British political life, underlining how his influence had grown. The catalyst for this advancement was his DevonDevon
Devon is a large county in southwestern England. The county is sometimes referred to as Devonshire, although the term is rarely used inside the county itself as the county has never been officially "shired", it often indicates a traditional or historical context.The county shares borders with...
connections. His brother John was elected to parliament as a member for Exeter in 1776; more importantly, in 1780 his sister, Elizabeth, married another MP and fellow Devonian, John Dunning
John Dunning, 1st Baron Ashburton
John Dunning, 1st Baron Ashburton was an English lawyer and politician.He was first noticed in English politics when he wrote a notice in 1762 defending the British East India Company merchants against their Dutch rivals. He was a Member of Parliament from 1768 onward...
.
A rich and influential lawyer, Dunning was allied to Lord Shelburne
William Petty, 2nd Earl of Shelburne
William Petty-FitzMaurice, 1st Marquess of Lansdowne, KG, PC , known as The Earl of Shelburne between 1761 and 1784, by which title he is generally known to history, was an Irish-born British Whig statesman who was the first Home Secretary in 1782 and then Prime Minister 1782–1783 during the final...
, a powerful Whig
British Whig Party
The Whigs were a party in the Parliament of England, Parliament of Great Britain, and Parliament of the United Kingdom, who contested power with the rival Tories from the 1680s to the 1850s. The Whigs' origin lay in constitutional monarchism and opposition to absolute rule...
politician who held progressive views on political economy and whose borough of Calne
Calne
Calne is a town in Wiltshire, southwestern England. It is situated at the northwestern extremity of the North Wessex Downs hill range, a designated Area of Outstanding Natural Beauty....
Dunning represented in Parliament. In July 1782, following Shelburne's promotion to Prime Minister
Prime Minister of the United Kingdom
The Prime Minister of the United Kingdom of Great Britain and Northern Ireland is the Head of Her Majesty's Government in the United Kingdom. The Prime Minister and Cabinet are collectively accountable for their policies and actions to the Sovereign, to Parliament, to their political party and...
and Dunning's appointment as Chancellor of the Duchy of Lancaster
Chancellor of the Duchy of Lancaster
The Chancellor of the Duchy of Lancaster is, in modern times, a ministerial office in the government of the United Kingdom that includes as part of its duties, the administration of the estates and rents of the Duchy of Lancaster...
, Baring fulfilled the new Prime Minister's need ‘to have recourse from time to time to mercantile advice’ (Barings archives, Northbrook MSS, B1). Baring, by instinct a Whig, became Shelburne's confidential adviser on commerce, or his ‘handy City man’, according to a discontented William Cobbett
William Cobbett
William Cobbett was an English pamphleteer, farmer and journalist, who was born in Farnham, Surrey. He believed that reforming Parliament and abolishing the rotten boroughs would help to end the poverty of farm labourers, and he attacked the borough-mongers, sinecurists and "tax-eaters" relentlessly...
. Baring's ideas on political economy and commerce were well ahead of his time; in 1799 he rightly defended the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
's decision (in 1797) to suspend specie payments as both correct and inevitable, in the face of hostile opposition from many of his peers.
Baring's knowledge of North American merchants and trade made him especially useful in the closing years of the American War of Independence when Shelburne, anxious for a liberal settlement, invited his comments on commercial aspects of the proposed peace treaty with the United States. Shelburne introduced Baring to Isaac Barré
Isaac Barré
Isaac Barré was an Irish soldier and politician. He earned distinction serving with the British army during the Seven Years' War, and later became a prominent Member of Parliament where he became a vocal supporter of William Pitt. He is known for coining the term "Sons of Liberty" in reference to...
, his paymaster-general, and to such leading luminaries as William Pitt the Younger
William Pitt the Younger
William Pitt the Younger was a British politician of the late 18th and early 19th centuries. He became the youngest Prime Minister in 1783 at the age of 24 . He left office in 1801, but was Prime Minister again from 1804 until his death in 1806...
, Henry Dundas, Jeremy Bentham
Jeremy Bentham
Jeremy Bentham was an English jurist, philosopher, and legal and social reformer. He became a leading theorist in Anglo-American philosophy of law, and a political radical whose ideas influenced the development of welfarism...
, Edmund Burke
Edmund Burke
Edmund Burke PC was an Irish statesman, author, orator, political theorist and philosopher who, after moving to England, served for many years in the House of Commons of Great Britain as a member of the Whig party....
, Sir Samuel Romilly
Samuel Romilly
Sir Samuel Romilly , was a British legal reformer.-Background and education:Romilly was born in Frith Street, Soho, London, the second son of Peter Romilly, a watchmaker and jeweller...
, and Lords Erskine, Camden
Charles Pratt, 1st Earl Camden
Charles Pratt, 1st Earl Camden was an English lawyer, judge and Whig politician who was first to hold the title of Earl of Camden...
and Sydney. However, Baring's friendship with Lord Lansdowne (as Shelburne became in 1784), Dunning, and Barré ran particularly deep, and in 1787 he drew public attention to it by commissioning their triple portrait from Sir Joshua Reynolds
Joshua Reynolds
Sir Joshua Reynolds RA FRS FRSA was an influential 18th-century English painter, specialising in portraits and promoting the "Grand Style" in painting which depended on idealization of the imperfect. He was one of the founders and first President of the Royal Academy...
. A private financial connection also existed. For six years from 1783 Baring loaned Lansdowne £5000, on security of a debt owing to Lansdowne. In 1805, on Lansdowne's death, Baring became a trustee of his estate, charged with the task of liquidating debts of £90,000.
Baring was not nearly as close to the Tory leader William Pitt, who followed Lansdowne as Prime Minister and who held office almost continuously until Baring's retirement from active business. Their views were far apart, and on Pitt's death Baring was quick to stress their lack of concurrence ‘on any great political question for above 20 years, our political opinions and principles being different’ (The Times, 6 Feb 1806). In particular he disagreed with Pitt's policy for the seemingly endless continuation of a wasteful war; they also suffered differences over government policy towards the East India Company
British East India Company
The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China...
. Baring's personal influence in government waned but his expert advice, always fairly delivered, continued to be provided on such matters as trade with Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
, the importance of Gibraltar
Gibraltar
Gibraltar is a British overseas territory located on the southern end of the Iberian Peninsula at the entrance of the Mediterranean. A peninsula with an area of , it has a northern border with Andalusia, Spain. The Rock of Gibraltar is the major landmark of the region...
, and the funding of the national debt. As part of Pitt's cleansing of abuse from public office, in 1784 he appointed Baring a commissioner charged with investigating fees, gratuities, and prerequisites for holding certain offices.
The link with Lansdowne led Baring to the Commons in 1784 when, at a cost of £3000, he was elected MP for Grampound
Grampound (UK Parliament constituency)
Grampound in Cornwall, was a borough constituency of the House of Commons of the Parliament of England, then of the Parliament of Great Britain from 1707 to 1800 and of the Parliament of the United Kingdom from 1801 to 1821. It was represented by two Members of Parliament.-History:Grampound's...
, Devon. He was ousted six years later, after which he stood unsuccessfully for Ilchester
Ilchester
Ilchester is a village and civil parish, situated on the River Yeo or Ivel, five miles north of Yeovil, in the English county of Somerset. The parish, which includes the village of Sock Dennis and the old parish of Northover, has a population of 2,021...
. Later he sat for Lansdowne's safe boroughs of Chipping Wycombe, Buckinghamshire
Buckinghamshire
Buckinghamshire is a ceremonial and non-metropolitan home county in South East England. The county town is Aylesbury, the largest town in the ceremonial county is Milton Keynes and largest town in the non-metropolitan county is High Wycombe....
(1794–6 and 1802–6), and Calne
Calne (UK Parliament constituency)
Calne was a parliamentary borough in Wiltshire, which elected two Members of Parliament to the House of Commons from 1295 until 1832, and then one member from 1832 until 1885, when the borough was abolished.-History:...
, Wiltshire
Wiltshire
Wiltshire is a ceremonial county in South West England. It is landlocked and borders the counties of Dorset, Somerset, Hampshire, Gloucestershire, Oxfordshire and Berkshire. It contains the unitary authority of Swindon and covers...
(1796–1802), which had formerly been represented by other Lansdowne favourites, Dunning and Barré. Notwithstanding his admission that ‘my voice is so very unequal to the House of Commons
British House of Commons
The House of Commons is the lower house of the Parliament of the United Kingdom, which also comprises the Sovereign and the House of Lords . Both Commons and Lords meet in the Palace of Westminster. The Commons is a democratically elected body, consisting of 650 members , who are known as Members...
’ (Barings archives, Northbrook MSS, N4.4.295), his speeches were reckoned to be ‘neat, flowing and perspicuous, aiming more by solidity of argument to arrest and convince his hearers, than by beautiful figures and impassioned eloquence to mislead the minds of men’ (Daily Advertiser, Oracle and True Briton, 12 Oct 1805).
Both in private and from the benches, Baring advocated greater freedom of trade. ‘Every regulation’, he said, ‘is a restriction, and as such contrary to that freedom which I have held to be the first principle of the well being of commerce’, for good measure adding that a restriction, or regulation, may doubtless answer the particular purpose for which it is imposed, but as commerce is not a simple thing, but a thing of a thousand relations, what may be of profit in the particular, may be ruinous in general. (Public Characters, 1805, 34)
Government business in the 1780s
There can be little doubt that Baring's firm benefited directly as well as indirectly from his political connections, in particular from Barré's almost limitless patronage as paymaster-general during the American War of Independence. In 1782 he advised Lansdowne that in 1781 and 1782 contractors' profits from supplying the army abroad represented over 13% of the total value of transactions. Baring won the 1783 contract on the basis of 1% commission, and, when war ended and the contract was terminated prematurely, he won contracts for the disposal of stores. Government savings were at least 10% and Baring was personally rewarded in other ways. Between 1784 and 1786 he (and not his firm) received £7000 in commissions for undertaking government work and a further £4250 from interest on government money in his hands. Against this, in his private accounts he charged the £3000 expenses incurred in winning his Commons seat in 1784. Nevertheless, transactions for the government stretched his resources in these years. He apparently ‘borrowed’ stock from Martin & Co., his brother-in-law's firm, ‘to enable me to negotiate the government business’ (Barings archives, DEP193.40). Yet the returns on these risky adventures were clearly immense. During the war, when government expenditure soared, his firm also emerged as a contractor for marketing British government debt; it was believed to have made profits of £19,000.The East India Company
Francis Baring's other distraction from his firm was his directorship of the East India Company from 1779. By 1783 he led the City interest on the company's court, and in 1786 he was reckoned its most able member. His commitment was significant; he gave up each Wednesday and occasionally a Friday to its affairs. Notwithstanding his views on the liberalization of American trade, he promoted the company's monopoly and commercial independence ‘with an ardour contrary to the usual moderation of his character’ (Public Characters, 1805). He joined the East India Company when the British government was anxious to exert greater political control over it, recognizing the great territorial power that it had become. Baring actively fought off the far-reaching proposals of Lord NorthFrederick North, Lord North
Frederick North, 2nd Earl of Guilford, KG, PC , more often known by his courtesy title, Lord North, which he used from 1752 until 1790, was Prime Minister of Great Britain from 1770 to 1782. He led Great Britain through most of the American War of Independence...
and Charles James Fox
Charles James Fox
Charles James Fox PC , styled The Honourable from 1762, was a prominent British Whig statesman whose parliamentary career spanned thirty-eight years of the late 18th and early 19th centuries and who was particularly noted for being the arch-rival of William Pitt the Younger...
, believing that ‘India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
is not a colony and God forbid that it ever should be’ (Barings archives, Northbrook MSS, N4.5), but he worked with an old friend from the period of his apprenticeship and now a fellow director, Richard Atkinson, to modify and facilitate the acceptance of Pitt's India Act
Pitt's India Act
The East India Company Act 1784, also known as Pitt's India Act, was an Act of the Parliament of Great Britain intended to address the shortcomings of the Regulating Act of 1773 by bringing the East India Company's rule in India under the control of the British Government...
. In 1792 and 1793, as Pitt's preferred candidate, he was elected chairman and charged with the task of renegotiating the company's charter.
The experience of his chairmanship was both exhausting and distracting. His private accounts went unwritten for two years and in 1792, ‘being obliged to travel for my health’ (Barings archives, DEP193.40), he was utterly unprepared for the collapse in prices of British government securities which reduced his private capital of £20,000 by half. ‘The more I work’, he confided to Lansdowne, ‘the greater the degree of jealousy and difficulty I have to encounter amongst the directors who are in general composed of either knaves or fools’ (ibid., DEP193.17.1). Pitt rewarded Baring with a Baronetcy
Baring Baronets
There have been two Baronetcies created for members of the Baring family, one in the Baronetage of Great Britain and one in the Baronetage of the United Kingdom....
on 29 May 1793, and he soldiered on as a director until his death in 1810, but increasingly he was disillusioned and absent from the court. As early as 1798 he had lost ‘much of that consequence … which his superior knowledge, experience and abilities entitle him to’ (C. H. Philips, The East India Company, 1784–1834, 1940, 164).
Transactions with Hope & Co.
Throughout Baring's lifetime his good commercial intelligence, sound judgement, nimble-footedness, and instinct for speculative profit remained the hallmarks of his business style. Thousands of speculations detailed in his firm's ledgers attest to this, but his burgeoning business and rising confidence were graphically illustrated in 1787 when Hope & Co.Hope & Co.
Hope & Co. is the name of a famous Dutch bank that spanned two and a half centuries. Though the founders were Scotsmen, the bank was located in Amsterdam, and at the close of the 18th century it had offices in London as well.-Early days:...
introduced him to speculation on a grand scale. The two houses set about controlling the entire European cochineal market by secretly buying up all available stocks, one quarter for Barings and the rest for Hopes. Correspondents from Saint Petersburg
Saint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...
to Cadiz
Cádiz
Cadiz is a city and port in southwestern Spain. It is the capital of the homonymous province, one of eight which make up the autonomous community of Andalusia....
spent £450,000 but prices remained static and in 1788, with a huge loss anticipated, the partners of Barings agreed ‘to forgo any participation of the profits of the trade for the last year’ (Barings archives, DEP193.40).
The resumption of war in 1793 provided new challenges and opportunities. The evacuation of Hopes to London between 1795 and 1803, when Amsterdam was occupied by France, and the availability of their expertise, contacts, and capital to Barings were of immense assistance. The two houses embarked on bold transactions—invariably with a quarter for Barings and the rest for Hopes. Their first adventure was entirely private and aimed to secure a substantial part of their capital from the dangers of European revolutions and wars. In late 1795 Baring dispatched his 22-year-old son, Alexander
Alexander Baring, 1st Baron Ashburton
Alexander Baring, 1st Baron Ashburton PC was a British politician and financier.-Background:Baring was the second son of Sir Francis Baring, 1st Baronet, and of Harriet, daughter of William Herring...
, to Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
to negotiate and execute the purchase of more than 1 million acres (4000 km²) of land in Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...
for £107,000. The investment was introduced by the land's owner, Senator William Bingham, son-in-law of Barings' Philadelphia correspondent, Thomas Willing, and yet another friend of Lansdowne. Francis Baring undertook the initial appraisal and commitment to the investment, and the negotiations were left to his son Alexander, who afterwards remained in North America as Barings' representative and who consolidated his position by marrying Bingham's eldest daughter, Ann Louisa. The link was further strengthened through the marriage of Baring's third son, Henry, to Bingham's other daughter, Maria, in 1802. Both marriages brought considerable wealth to the Baring family.
Wartime finance
British government expenditure, which grew to unprecedented levels during the European wars, created great opportunities for London merchant bankers such as Sir Francis Baring. After 1799 his firm headed the list of public debt contractors in twelve of the next fifteen years, supposedly giving rise to total profits of £190,000. For Baring, a key financier of the nation's war effort, it represented the pinnacle of his power and standing. Despite his retirement in 1804, he continued to appear as a contractor until his death because, as he explained, ‘it was thought my name would be useful in the opinion of the publick’ (Barings archives, Northbrook MSS, A21).Britain's European allies needed funds and came to Baring who, with Hopes, now organized some of the first marketings of foreign bonds in London. Believing fervently that ‘it may be desirable not to have the subject to discuss with our own Ministers, as you know very well how ignorant they are of foreign finance’ (Barings archives, Northbrook MSS, A19), in 1801 he dispatched P. C. Labouchere of Hopes and his son George to negotiate a loan to the court of Lisbon. The resulting ‘Portuguese diamond loan’ of 13 million guilders was shared between Barings and Hopes on the usual 25:75 basis.
Of equal strategic importance was Baring's transmission of British government subsidies to allied governments to support their war efforts. This highly secret and sensitive work required expert knowledge of money transmission and a sound correspondent network; again it underlined the government's confidence in Baring. Opportunities for direct financing of the enemy were also presented to Baring, who knew he could hoodwink the government into consenting to them; ‘but to have obtained that licence we must have presented a memorial so equivocal and in truth so unfounded that it would not suit us and therefore was abandoned’ (Barings archives, DEP3.3.3, Francis Baring to Alexander Baring, 20 May 1799).
Baring applied a looser criterion in his choice of trading partners, however. Links with leading American merchants, such as the Codmans of Boston, Willing and Francis of Philadelphia, Robert Gilmour, and Robert Oliver & Brothers of Baltimore were now immensely important to Barings' business as its axis swung from continental European to transatlantic trade. In sustaining these extensive connections Baring undoubtedly facilitated, albeit passively, the breaching of Britain's continental blockade.
American finance
Close connections with American merchants inevitably resulted in links with the United States government. Since the close of the American War of Independence, Baring had kept watch over the American government's finances in Europe. However, his first significant transaction for its account was the sale in 1795 of $800,000 worth of stock and the remittance of the proceeds in support of American negotiations with the north African Barbary powers. To secure the transaction Francis Baring admitted to acting with ‘zeal, perhaps imprudence, in going beyond the letters of my orders’ (New York Historical Society, Rufus King MSS, vol. 39, fol. 17), but the American ambassador in London commended his ‘liberal and skilful manner’ and undertook to ensure that the government would ‘entertain a proper sense of your Service in this Business’ (ibid., vol. 51, fol. 461). Other business soon followed, including the sale of the government's shares in the Bank of the United States and the purchase of munitions from British manufactures for the government's account.Considered to be an ‘English house of the first reputation and solidity’ (New York Historical Society, Rufus King MSS, vol. 55, fols. 378–9), Barings in 1803 was appointed London financial agent for the United States government, leaving Sir Francis Baring's influence in North American financial affairs unrivalled in London. At about this time, when a short interval of peace existed after the treaty of Amiens, Baring led his house, alongside Hopes, into its largest and most prestigious transaction yet, financing the Louisiana Purchase
Louisiana Purchase
The Louisiana Purchase was the acquisition by the United States of America of of France's claim to the territory of Louisiana in 1803. The U.S...
. The French government wanted to sell 1000000 square miles (2,589,988.1 km²) of the Territory of Louisiana, and the United States administration wanted to buy it; the purchase price was $15 million and Francis Baring was charged with finding it. He sent his son Alexander to Paris to negotiate with French and American representatives, and the eventual result was that on behalf of the French government Barings and Hopes sold US government bonds worth $11.25 million. The business was of enormous size; ‘my nerves are equal to the operation’, Francis Baring reassured Hopes, but he added that ‘we all tremble about the magnitude of the American account’ (Barings archives, Northbrook MSS, A4). Later he confessed that ‘what I suffered can never be described and it completely overpowered my nerves for the first and I hope last time’ (ibid.).
The leading American house in London also acted as London banker for the Bank of the United States. Here again the close network of correspondents and friends which Baring so earnestly cultivated was vital. Thomas Willing
Thomas Willing
Thomas Willing was an American merchant and financier and a Delegate to the Continental Congress from Pennsylvania....
, William Bingham's father-in-law and Barings' client at Philadelphia since 1774, was the bank's president and so its use of Baring's firm in making London payments, undertaking exchange transactions, and providing credits was seemingly inevitable.
Withdrawal from business
Baring aimed to strengthen his links with Hopes even further, through his son joining their partnership, but Alexander Baring could not be persuaded to comply. Baring's ultimate goal was to establish a house under his control based on both Barings and Hopes, which would straddle the North Sea, dominate government finance in Europe, and provide an enormously powerful base for its American connections. Alexander's reluctance compelled him ‘to abandon the colossal plan of one foot in England, the other in Holland’ (Barings archives, DEP193.17.1, Baring to Shelburne, 9 Oct 1802). It was ‘a sacrifice such as no head of a family ever made before’, he confided to Lansdowne, ‘but I must confess there is enough left for consolation’ (ibid.).In 1803 Baring began his withdrawal from business when he gave up his entitlement to a share of his firm's profits. Much of his capital remained on loan; by the time of his death in 1810 he still provided £70,000 or about 17% of the firm's resources. He stood down as partner in 1804, handing the reins to Charles Wall, the ‘principal manager’ according to Farrington, and his three eldest sons, Thomas
Sir Thomas Baring, 2nd Baronet
Sir Thomas Baring, 2nd Baronet , was a British banker and MP.He was the eldest son of Sir Francis Baring, 1st Baronet, founder of Barings Bank. His grandfather John Baring had emigrated from Germany and established the family in England. Thomas became a partner in Baring Brothers & Co. in 1804,...
, Alexander
Alexander Baring, 1st Baron Ashburton
Alexander Baring, 1st Baron Ashburton PC was a British politician and financier.-Background:Baring was the second son of Sir Francis Baring, 1st Baronet, and of Harriet, daughter of William Herring...
, and Henry
Henry Baring
Henry Baring , of Cromer Hall, Norfolk, was a British banker and politician. He was the third son of Sir Francis Baring, 1st Baronet, the founder of the family banking firm that grew into Barings Bank His grandfather John Baring emigrated from Germany and established the family in...
. In recognition of their assumption of leadership, in 1807 the nameplate of Francis Baring & Co. was taken down and replaced by that of Baring Brothers & Co..
Private wealth
Baring's accumulation of great wealth allowed him to diversify his pursuits in gentlemanly living. In 1790 he began to acquire property at BeddingtonBeddington
Beddington is a settlement between the London Boroughs of Sutton and Croydon. The BedZED low energy housing scheme is located here. In Beddington was a static inverter plant of HVDC Kingsnorth....
in Surrey
Surrey
Surrey is a county in the South East of England and is one of the Home Counties. The county borders Greater London, Kent, East Sussex, West Sussex, Hampshire and Berkshire. The historic county town is Guildford. Surrey County Council sits at Kingston upon Thames, although this has been part of...
, based around Camden House, and in 1796 he bought Manor House
Baring family properties
Baring family properties is a listing of significant properties in England that were purchased or developed by members of the Baring family, mostly during the period 1820-1890....
, Lee
Lee, London
Lee is a district of south London, England, located mostly in the London Borough of Lewisham and partly in the London Borough of Greenwich. The district lies to the east of Lewisham, one mile west of Eltham, and one mile south of Blackheath village...
, a relatively modest country house about six miles (10 km) south-east of central London, from his old friend Joseph Paice, for £20,000. Land in Buckinghamshire
Buckinghamshire
Buckinghamshire is a ceremonial and non-metropolitan home county in South East England. The county town is Aylesbury, the largest town in the ceremonial county is Milton Keynes and largest town in the non-metropolitan county is High Wycombe....
was soon added at a cost of £16,000 and by 1800 his total investment in country estates exceeded £60,000. Yet more ambitious plans for life as a country landowner were fertilized; from 1801 he acquired from the Duke of Bedford
Duke of Bedford
thumb|right|240px|William Russell, 1st Duke of BedfordDuke of Bedford is a title that has been created five times in the Peerage of England. The first creation came in 1414 in favour of Henry IV's third son, John, who later served as regent of France. He was made Earl of Kendal at the same time...
land and a great house, Stratton Park
Stratton Park
Stratton Park, in East Stratton, Hampshire, was an English country house, built on the site of a grange of Hyde Abbey after the dissolution of the monasteries; it was purchased with the manor of Micheldever in 1546 by Thomas Wriothesley, 1st Earl of Southampton...
, at Stratton in Hampshire
Hampshire
Hampshire is a county on the southern coast of England in the United Kingdom. The county town of Hampshire is Winchester, a historic cathedral city that was once the capital of England. Hampshire is notable for housing the original birthplaces of the Royal Navy, British Army, and Royal Air Force...
to create ‘the Kingdom of Stratton’ (Barings archives, Northbrook MSS, A21). By 1803 his expenditure had reached £150,000, partly funded through the sale of his Buckinghamshire land. In 1802 he transferred his London home from above his business in Devonshire Square to Hill Street in the West End.
The architect George Dance the Younger
George Dance the Younger
George Dance the Younger was an English architect and surveyor. The fifth and youngest son of George Dance the Elder, he came from a distinguished family of architects, artists and dramatists...
was commissioned to remodel the house at Stratton, which was then filled with the finest furniture and best old masters. Baring's picture purchases had begun in 1795, when about £1500 was spent, and his expenditure grew apace after 1800; by 1808 he valued his acquisitions at £15,000. Dutch 17th-century masters were his particular passion but by 1804 he had ‘done with all except the very superior’; now only works by Rembrandt, Rubens, or Van Dyck ‘tempt me’ but ‘the first must not be too dark, nor the second indecent’ (Barings archives, Northbrook MSS, A4.3). He was a patron of Sir Thomas Lawrence
Thomas Lawrence (painter)
Sir Thomas Lawrence RA FRS was a leading English portrait painter and president of the Royal Academy.Lawrence was a child prodigy. He was born in Bristol and began drawing in Devizes, where his father was an innkeeper. At the age of ten, having moved to Bath, he was supporting his family with his...
, whom he summoned to Stratton in 1806 to paint a magisterial triple portrait of Baring with his two senior partners as a memorial to his business achievement.
Otherwise, Baring's distractions from business were few. As chairman from 1803 to 1810 of the Patriotic Fund administered by Lloyds of London, he worked for the welfare of Britons wounded or bereaved during the French wars. The mercantile community sought his help as referee in settling disputes, and as a trustee he gave distinguished service in settling the affairs of the leading London merchants, Boyd, Benfield & Co., which had crashed in 1799. He held the presidency of the London Institution
London Institution
The London Institution was an educational institution founded in London in 1806...
from 1805 until his death. As a pamphleteer his output was modest, with works on the Commutation Act in 1786, on the Bank of England in 1797, and on the affairs of Walter Boyd in 1801.
Baring died, aged 70, on 12 September 1810 at Lee. His eldest son Thomas
Sir Thomas Baring, 2nd Baronet
Sir Thomas Baring, 2nd Baronet , was a British banker and MP.He was the eldest son of Sir Francis Baring, 1st Baronet, founder of Barings Bank. His grandfather John Baring had emigrated from Germany and established the family in England. Thomas became a partner in Baring Brothers & Co. in 1804,...
succeeded to the Baronetcy
Baring Baronets
There have been two Baronetcies created for members of the Baring family, one in the Baronetage of Great Britain and one in the Baronetage of the United Kingdom....
and inherited the country estates. The size of Baring's estate underlines his achievements. His wealth at death was £606,000, with £70,000 in company holdings. £175,000 was distributed among his children other than Thomas, who inherited the balance; his capital remaining in Baring Brothers & Co. amounted to almost £70,000; his Hampshire and Lee estates were valued at £400,000; and his pictures, jewels, and furniture were worth almost £30,000.
In the 25 years from 1777, Baring had transformed his firm into one of London's most powerful merchant banking houses; by about 1786 he reckoned that it was ‘in a very flourishing situation, totally divested of moonshine’ (Barings archives, DEP193.17.1, Baring to Shelburne, n.d.). By 1800 a network of influential correspondents stretched across Europe; agencies were held for leading Boston and Philadelphia merchants; leadership in marketing British government debt was undisputed; Baring was a respected adviser to senior politicians; his leadership in the East India Company had provided influence in trade east of Africa; and, not least, important commissions had been won from foreign governments. Francis Baring was Barings, and he dominated management, provided most of the capital, and received the lion's share of the profits.
Works
- The principle of the Commutation-Act established by facts, 1786
- Observations on the establishment of the Bank of England, 1797
- Further observations on the establishment of the Bank of England, 1797
- Observations on the publication of Walter Boyd, esq., M.P., 1801
Further reading
- P. Ziegler, The sixth great power: Barings, 1762–1929 (1988)
- R. W. Hidy, The house of Baring in American trade and finance: English merchant bankers at work, 1763–1861 (1949)
- M. G. Buist, At spes non fracta: Hope and Co., 1770–1815 (1974)
- J. Orbell, Baring Brothers & Co. Limited: a history to 1939 (privately printed, London, 1985)
- R. C. Alberts, The golden voyage: the life and times of William Bingham, 1752–1804 (1969)
- N. Baker, Government and contractors: the British treasury and war suppliers, 1775–1783 (1971)
- Public characters of 1809–10 (1809), appx 12, p. 590
- ‘Sir Francis Baring, Bart.’, Public characters of 1805 (1805), 30–39
- ING Barings, London, Barings archives