Barings Bank, William Bingham and the Rise of the American Nation, published by McFarland & Co, Jefferson, North Carolina.
Barings Bank, William Bingham and the Rise of the American Nation is published by McFarland & Co who have a reputation for producing academic work of the highest standards. This book is no exception, is well researched, sourced and annotated and has been taken up as a source document by universities around the world. I was impressed and gratified by their decision to publish and by the strength of editorial assistance and encouragement they contributed.
It also tells an exciting story from both sides of the American revolutionary war; it deserves a wider audience, not just from the academic world. It is my intention to capture a wider readership, and I hope that the following description and research background will help in achieving this objective.
I welcome any comments or input from anyone working in the same field.
BARINGS BANK, WILLIAM BINGHAM AND THE RISE OF THE AMERICAN NATION
A Transatlantic Relationship from the Revolutionary War through the Louisiana Purchase
John and Francis Baring established their merchant house in 1762 in Cheapside, London, just one of many attempting to service the huge expansion of world trade at the end of the 18th century. They were finding their feet and beginning to turn a profit in the years running up to the American War of Independence. And yet little more than 25 years later, together with their close associate Hope & Co, they had financed the Louisiana Purchase, and were described later by Richelieu as the “Sixth greatest power in Europe after Britain, France, Austria, Prussia and Russia”. This change from just another merchant house to pre-eminence happened around the time of and just after the American War of Independence and the creation of the United States.
Francis Baring was without doubt the foremost banker of his time. He was perhaps the first to embrace the concept of merchant banking. He combined banking with political influence on both sides of the Atlantic, and became very well connected, and one of these connections was a wealthy Philadelphia merchant and later Senator, William Bingham.
This book describes the events and relationships that established Barings Bank as the world’s most powerful merchant bank and the role that family connections played in transforming the United States into the world’s first superpower. Illustrations of the key characters and locations accompany the text. Appendices examine the genealogy of the Baring, Bingham and Willing families and their impact on English aristocracy. The life of Bingham’s wife, Anne Willing Bingham, “the most beautiful woman in all America” is examined in detail. The heritage locations described in the book also feature as an appendix.
This book is intended for students of the early years of the American nation and the Federalist period. It also provides an insight into William Bingham who died in England and whose DNA has threaded its way through British aristocracy, allowing him to achieve in death what he failed to in life.
As far as students of British history are concerned, the book attempts to highlight the role of the world’s first merchant bank in the political history of the times, and the connections, coincidences and serendipity that led to the bargain of all time, the Louisiana Purchase.
The period covered by this book saw the biggest political and economical changes of any comparable period before or since. The key characters in this book may not be household names, but they were there, just off stage, making history happen. The book also tells a rattling good story that will be of general interest!
This story ends in 1804; The final chapters tie up the loose ends and set the scene for the next story………”Same Old Game!”.
BARINGS BANK, WILLIAM BINGHAM AND THE RISE OF THE AMERICAN NATION, a Transatlantic Relationship from the Revolutionary War through the Louisiana Purchase, published by McFarland & Co, Jefferson, North Carolina.
ISBN: 978-0-7864-4437-3 published by McFarland & Co, Inc, Publishers, Jefferson, North Carolina,USA,
BARINGS BANK, WILLIAM BINGHAM AND THE RISE OF THE AMERICAN NATION – A COMMENTARY
As I have said, I have to admit that I rather stumbled on this story whilst researching the events of a century later, but decided to try and answer the questions that stemmed from the later research - what factors catapulted John and Francis Baring & Co to pre-eminence in the world of banking; who was the Senator from Philadelphia and how did their families, and of the Hope’s of Scotland and Holland intertwine to produce such formidable results that changed the history of the times. I have presented the facts as accurately as my research resources have allowed and I will leave it to the reader to judge whether I have answered the questions satisfactorily. There are still many loose ends that should be followed up at some stage.
At the same time I have also tried to write two stories superimposed on each other, that is the evolution of the merchant and banking operations on the one hand and the human story of the people and families that were caught up in the events from the American War of Independence to the Louisiana Purchase.
The answer to the first question, with hindsight, is fairly straightforward. Before the Seven Years War and the American Revolution government finance was all about current income and current expenditure and the taxation (or overseas plundering) to pay for the hostile activities that were so popular at the time. The Dutch banks, in particular Hope & Co, as a result of republican political stability through most of the eighteenth century, and a population interested in and prepared to invest in joint stock enterprises, made the first big leap towards government loans funded by individual investors.
What Francis Baring did above all was to recognise this potential and add this activity to the financing of trade rather than trade itself which was his first big idea, and started to set him apart from the others. It was not as simple as it sounds and he had some very helpful and influential associates along the way, which led him to the second big idea – the combination of trade and politics.
One of those useful associates was, of course William Bingham, and we now know who he was. Also key to Francis Baring’s success were Henry Hope and his political patrons on both sides of the Atlantic, in particular the Earl of Shelburne and Rufus King in America.
On the assumption that all these assertions are correct, why do we know so little of the individuals concerned? Why is there no Bingham monument in Philadelphia or memorials to Francis and Alexander Baring in Trafalgar Square, or a Henry Hope plaza in Amsterdam?
In the case of William Bingham, he was simply overwhelmed by time and tide of events. He had made a great deal of money, and the manner with which he flaunted it was at odds with the changing times. His main Federalist political allies such as Washington and Hamilton were gone; John Adams never had much time for him and Thomas Jefferson despised him. He had missed out the great offices of State and the diplomatic posts, even the Governorship of Pennsylvania, at any of which he would probably have excelled; there seems to be no doubt of his political and intellectual ability and his communication skills were faultless.
The death of his wife Anne was the real turning point, though. He left America in haste to be with Alexander Baring and Ann Louisa and his grandchildren, leaving his infant son, William, behind, but he clearly intended to return at some stage, if only to tidy up his business affairs.
Although he left much of his wealth behind in America, it was largely in real estate and the “richest man in America” tag faded over the years. His children were now in England or France, where they became part of British or French history, not that of the United States. Some of his close allies, such as James Wilson and Robert Morris were also under something of a cloud; Thomas Willing’s influence was waning, and Thomas Jefferson and James Madison had no time for him or for The First Bank of the United States that he did so much to create. Phildelphia’s social elite, The Republican Court was now history, and its Queen and the brief Federalist society that went with it was gone.
By the middle of the nineteenth century William and Anne Bingham had become footnotes to the history of the Federal era of the early years of the United States. But without Bingham* (and his connections) Alexander Baring would not have acquired the agency of the United States, and without that they may have been overtaken by Rothschild as the world’s banker much sooner than they eventually were. In the histories of Barings that have been written so far Bingham is characterised as a “rich Senator from Philadelphia” without any real attempt to find out more. The Barings have not been known for acknowledging the influence of non-family members in the success of the enterprise, and as a result William Bingham was effectively assimilated into Baring history.
Francis Baring was already the “first merchant in Europe” when the British government, and in particular William Pitt recognised his contribution in re-structuring the East India Company and in raising money to fight the French, but a Baronetcy was the greatest honour available to a mere merchant in the reign of George III, and you will not see his likeness on a plinth anywhere in London. Control of Baring Brothers Bank effectively passed to Alexander Baring in the early years of the nineteenth century, and he remained the senior partner from 1804 until he retired to his vast estate at the Grange in Hampshire in 1830. He was considered the greatest banker of his generation, and possibly of the nineteenth century. His mastery of the art of government financing and of world trade earned him the peerage in 1835, as Lord Ashburton that his father never acquired. But no statue to Alexander Baring exists either. It was the “political” Barings that emerged from the banking Baring wealth that are captured forever in bronze.
Hope & Co, and in particular Henry Hope were critical in the emergence of Barings, by introducing them to the opportunity to finance foreign governments as well as world trade. Perhaps in the end they were less cohesive as a family; they had already made a great deal of money, enjoyed the good life, were weakened by the political events in Holland at the end of the eighteenth century, and in the end ran out of family members prepared to carry on. By 1814 the “principleassistant in Mr Hope’s counting house”, as Alexander Baring was described by Major William Jackson, had swallowed Hope & Co whole.
But maybe the real reason that history has “lost” these bankers is because politicians tend to write history. Before the War of American Independence, there were merchants, and there were governments with their treasuries. By the time Messrs Baring, Bingham and Hope had financed the Louisiana Purchase there were merchant banks, capable of financing governments, perhaps the first and certainly the foremost was Baring Brothers Bank, set up in 1762 in London by second generation German immigrants, and from that day to this the merchant banker, or as we would say today the investment banker is never far from the centre of government.
There seems little doubt that the main characters in this book were clever and resourceful men, and may well have changed the world on their own, but it is fascinating to reflect on the unlikely circumstances that brought them together in such an effective way.
Looking back at the key event for Barings for its growth during the nineteenth century was the acquisition of the agency of the New United States. In 1774 very few observers would have tipped John and Francis Baring & Co to be the foremost merchants and bankers in the world, but in 1774, of course, the United States did not exist.
It would seem that Francis Baring and William Bingham were on some kind of pre-ordained and inevitable collision course; If William Duer, and as result, Henry Knox had not been in financial difficulties in the property fever in America in the 1790’s, Bingham would not have had the opportunity to acquire the Maine lands. If Napoleon Bonaparte had not invaded Holland, Hopes and Francis Baring would not have sent Alexander Baring to America to invest the money they were sheltering from the French. If Alexander Baring had not fallen for Ann Louisa Bingham he would have returned to London; without William (now Senator) Bingham he would not have had the introductions to the political heart of the United States Government, particularly James Madison and Albert Gallatin that would lead to the agency of the United States and the Louisiana Purchase. Today it seems quite staggering that Baring, Bingham and Hopes could find $11 million dollars in gold (admittedly in staged payments), with absolutely no security other than the trust in Jefferson, Madison and Gallatin that the United States would pay it back.
But then, further back in time, if Thomas Willing and Robert Morris and Henry Hope had not become correspondents of Francis Baring, William Bingham would not have targeted Baring to sell the Maine lands. And without the Revolutionary War Bingham would not have made the fortune in Martinique, and elsewhere, to be able to speculate so boldly.
And if Benjamin Franklin and Robert Morris had not sent Bingham to Martinique there would have been no fortune to make.
Without the patronage of the Earl of Shelburne, Francis Baring would not have reached the highest echelons of British government, and a whole host of other connections including Rufus King would probably not have been made.
If Shelburne (by then Lansdowne) had not sent Talleyrand (who was escaping to America from the French Terror) with introductions to Bingham in Philadelphia, the two of them would not have been in a position to discuss the wider possibilities of the Louisiana Purchase in 1803.
So how have these events of over two hundred years ago changed the course of history, assuming that they have?
Politically, the independence of the United States is the most significant event of the time. The pressure for independence in the American colonies came from merchants concerned about the effect that British measures were having on trade, and lawyers and politicians offended by the infringement of their rights and liberties. The decision to assert independence was made, in the end by politicians, but it was achieved by merchants and soldiers, and the soldiers needed the merchants to finance and supply them.
The loss of the American colonies, disastrous as it seemed at the time for Britain, triggered a new British Empire that would be financed by our new breed of merchant bankers, and set in motion the creation of a super power; and the Louisiana Purchase made sure of it.
As we have seen, in the overall scheme of things, history has not treated our triumvirate of Barings, Binghams and Hopes particularly well, but it can be argued that their influence at the time matched the political names that we do remember. They were present and involved, like Forest Gump, in some of the most critical events of the period, but they seem somehow to have been air-brushed away. Perhaps it is because they were merchants and bankers, motivated above all by the creation of wealth, at which they were successful almost without parallel, but as we have seen in very modern times that is not the way to a nation’s heart.
They did, however, change the world.
* In 1813 President John Quincy Adams wrote that “the Presidency, the capital and the country had been governed by William Bingham and his family connections”