CITY BANKERS, GOLD, AND BANKING PANICS

Abstract

City Bankers, 1890–1914. By Youssef Cassis. Cambridge: Cambridge University Press, 1994. Pp. xv+350. ISBN 0-521-44188-9. £40.00.

John Bullion's empire: Britain's gold problem and India between the wars. By G. Balachandran. Richmond: Curzon Press, 1996. Pp. xii+252. ISBN 0-7007-0428-0. £40.00.

The banking panics of the Great Depression. By Elmus Wicker. Cambridge: Cambridge University Press, 1996. Pp. xviii+174. ISBN 0-521-56261-9. £30.00.

The front cover of Cassis's book shows the heavily bearded and mustachioed directors of the Bank of England, gathered in 1903 in the magnificent Court Room. The City was at its peak, the undisputed financial capital of the world. Its interests were the major determining influence on British economic policy. The Bank of England directors were selected, according to ancient tradition, from the City's most prestigious trading houses, including the merchant banks. Towards the end of the nineteenth century it had become obvious that banking was undergoing a radical transformation. A revolution in the structure of English banking had caused the near-disappearance of the old country banker; private family-owned banking firms were under severe pressure and many had been absorbed by the joint-stock banks. However, much had remained the same. It is one of the virtues of Cassis's book, which focuses on the top layer of City bankers, that it shows how much continuity there was. The old private banker fitted smoothly into the new, larger banks. The occupation of private banker, carried out within a family firm, continued to represent the ideal. Banking remained a not particularly onerous job. The typical City banker was a part-timer, who used his position and representation on the boards of other financial companies as a means of furthering his own business interests – he had to, because a board position alone did not pay enough to live like a gentleman. Banking was a respectable way of building up a fortune. The City's strength was its private information network of social and business relationships which made the highly specialized financial system possible but also created opportunities to make money privately. The author shows that the distribution of tasks within the City, as well as the reluctance of the big joint-stock banks to develop into continental-style investment banks, eminently suited the private interests of the board members, ‘as though the primary aim of the big deposit banks... was to make possible the activities of the private banking and trading firms and the overseas ventures of the partners of these firms’. What is now considered insider trading was an accepted form of business. There were few professional bank managers; those there were had generally risen through the ranks and had a lower social status. The City's playing field was never intended to be level and appears to have become even more slanted in the period before the First World War.