------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (June 2010)

Youssef Cassis and Philip Cottrell, editors, _The World of Private
Banking_. Aldershot, UK: Ashgate Publishing, 2009.  xxv + 302 pp.
$115 (hardcover), ISBN: 978-1-85928-432-2.

Reviewed for EH.NET by Peter Austin, Department of Interdisciplinary
Studies, St. Edward’s University.


Occasionally, one has the chance to look simultaneously at something
historical and something very much still with us.  This applies to the
business of money that, if all goes well, is almost invisible to
everyday life.  Today issues of finance are more visible than usual
and a realm that prides itself on discretion is under scrutiny. _The
World of Private Banking_ represents a time when discretion and
reputation were all.  This edited volume contains fifteen chapters
that group and connect in a sensible manner, so that reading the whole
creates an impression of something greater than the sum of its parts.
It is hugely descriptive though, for the most part, it is not new
scholarship.  It covers various aspects of private banking from the
late eighteenth century to the First World War, and a bit beyond.  It
has an expansiveness that belies the simplicity of its title.

If there is one name associated with private banking, it is
Rothschild, and it is with this five-tentacled bank that the
collection begins.  In his “Rise of the Rothschilds,” Niall Ferguson
portrays the bank as it was -- a sort of multinational.  He is most
concerned with origins, the rise of the organization between 1810 and
1836 -- that is, before the great banking changes of the
mid-nineteenth century.  Derived from his two-volume history, this
essay is the collection’s one case study and concerns itself with
Rothschild’s size, its bond-dominated business, the partnership
structure, the family itself, and reasons for the bank’s success,
including its well-known communications network.

In its role as “The World Pump,” the Rothschild House might today be
called a “non-state actor,” and like today, myths grow up around the
inclinations and capabilities of such organizations.  As Ferguson
describes, Rothschild was indeed powerful, even in its early decades,
based on a number of factors -- not least of which was its great
geographical reach, and its reliance not on a single market.
Ferguson’s account is florid with personalities and comments about the
ingredients of Rothschild’s operations.  One of the most interesting
aspects here is Ferguson’s revelation that the House often improvised
in its operations, had no systematic accounting, and lost track of
considerable amounts of money.  If there is a weakness to this
excellent essay, it is that the Ferguson does not choose or prioritize
the most important elements of Rothschild’s success.  Was it superior
communication, ruthlessness toward rivals, Jewish solidarity?   In the
end, for Ferguson, it appears that Rothschild’s performance came from
a combination of things, but the bank remained at heart a family
concern, from which emanated its intensity and its methods.

In the three decades after 1815, Rothschild’s closest rival was
Barings, and John Orbell’s comment on the British house complements
Ferguson well.  Rothschild was much larger than Barings, but in his
“Private Banks and International Finance in the Light of the Archives
of Baring Brothers,” Orbell highlights the unparalleled range of
Barings’ financial activities that assured it greater profitability.
Ferguson’s lens focuses squarely and powerfully on one large piece of
the private banking puzzle: Rothschild.  By contrast, I believe Orbell
does in exemplary fashion what this collection does as a whole so
well: reviews and explains the vocabulary, mechanics, and roles
associated with the international finance generally; the
merchant/private banking enterprise specifically.

Orbell’s primary assignment here is to articulate the private banks’
source of greatest strength and longevity: its international scope.
From Calcutta, Canton and Madrid to Rio de Janeiro, New Orleans and
Moscow, Barings was active, and this remained an advantage that
private banks maintained over their joint-stock rivals even after
these began to eclipse private bankers in home markets after about
1850.  Not only does this chapter locate Barings’ activities
geographically, it places them in relation to Baring rivals.  Perhaps
of all chapters, Orbell’s is unique for its weaving together of
merchant banking themes with archival resources.  The gaps are most
interesting.  In my own work on Barings in Canada, Massachusetts and
England, I can indeed confirm the perplexing absence of material in
the Barings record to do with trade finance before 1900.  But in all,
the Barings archive is complete and quite well-managed.  It is an
orderly record of one of the most important merchant banks to fuel
modernization and growth around the world, particularly in the
nineteenth century.  Orbell illustrates this process magisterially.

Barings was one of the nineteenth century’s great international
financial enterprises.  In the United States, however, it had no peer
before 1840, and Edwin Perkins takes a look at Barings’ operations
there, along with snapshots of five other major banks in the United
States in his essay, “The Anglo-American Houses in the Nineteenth
Century.”  A scholar whose early work focused on the House of Brown,
Perkins describes the activities of banks in the antebellum United
States when it was an emerging market in the way we think of China,
Brazil, or India today.  Perkins reminds us that the American market
exploded with activity after the Civil War, and that it was European
capital flowing increasingly to maturing American financial
institutions that helped to settle and develop the enormous home
market of the United States -- a home market so large and rich that
the United States has historically deemphasized exports since
independence. The largest theme in Perkins’ work is this transition to
American financial control on its own soil.

In the 150 years or so before 1914, private banks were exclusive
entities.  Today, they are most often found within larger public
companies as in the so-called “private banking” division of a Wells
Fargo Bank or even a Charles Schwab.  The salience of Perkins’ essay
is that we know that the development of a mature American banking
system gained traction with the withdrawal of Barings after the
financial difficulties of the Andrew Jackson years; that the reasons
for withdrawal by Barings were varied, but in part had to do with the
disagreeable style, pace, and practices of American finance.  In the
portraits of a Brown, a Seligman, a Kuhn Loeb, or a Morgan, this essay
previews the rise of raw American financial power released in the
1840s, and subsequently developed.  The fortunes of discrete patrician
private banking of the kind described here, particularly British,
correspond inversely with the development of the American market and
the spread of American democracy and values.  Perkins’ essay describes
the transition from a time when Anglo-American houses prioritized
Britain and British finance to a time when they prioritized business
on the western side of the Atlantic.

International themes continue with Alain Plessis’ interesting article
on the “eccentric, quasi-magical world” of the so-called “Haute
Banque” -- a very “small group of powerful houses” in Paris, usually
partnerships, international in orientation, whose membership was
unofficial, changeable, and difficult to define.  Their mystery was
increased because (with the exception of Rothschild) Plessis finds
these French banks left few records compared to their British and
American counterparts.  Unraveling events in business history is
notoriously difficult -- in financial history, particularly so.  In
contrast to other fields, personalities attracted to commerce and
money tend not to be expressive, impressionistic or prone to lengthy
description since they tend to see more value in action rather than
thinking and writing.  There are exceptions here of course, but the
haute banque’s secrecy is in line with Pierpont Morgan’s French
aphorism of “pense moult, parle peu, écris rien” (“think a lot, say
little, write nothing”).

International operations were the lifeblood of many private banks.
But in the phrase of Alain Plessis, the Parisian haute banque was “a
world open to foreigners” in a manner unlike others in private
banking.  Plessis describes cosmopolitan organizations “incompletely
assimilated” into French elite society since they had roots of foreign
origin and desired to keep connection with family members outside
France.  To be sure, origins and loyalties were by country.  They were
also by faith.  He describes wedlock alliances among Christians and
among Jews in order to build banking organizations; of major Jewish
and Protestant bankers and their children married off to foreign wives
and husbands, to people established in France but with foreign
origins, often of the same religion as themselves.  Here was
international banking with a vengeance.  Here was the source of the
Rothschild mystique, a combination of myth and reality mentioned by
Ferguson, made more mercurial and (for those so inclined) more
mysterious by family members moving around from country to country for
intelligence to find new markets and to keep family ties current.

Plessis on the haute banque introduces the reader to the general
phenomenon of religious and ethnic minorities in trade and finance.
Armenians in Turkey, Chinese in Malaya, Greeks in Cairo, and Lebanese
in Buenos Aires come to mind.  Here, authors Ginette Kurgan-van
Hentenryk and Martin Körner concentrate on the idea of financial
solidarity along religious lines with their chapters on Jewish and
Protestant banking.

Kurgan-van Hentenryk broadens aspects of Plessis’ essay as she covers
the origins of the haute banque at the time of the Bourbon
Restoration, a closed circle of twenty banks of Protestant and Jewish
financiers that placed loans for Europe’s conservative monarchies
after 1815.  But she does so much more.  Here is the story of Jewish
private banking and its spread across Europe in the nineteenth century
with imminent names like Stern, Bischoffsheim, Bleichröder, Fould,
Oppenheim, Goldschmidt, Cassel, Lazard, Mendelssohn, Seligman, and
Rothschild; and later in the United States with Warburg, Schiff,
Goldman, and Soros.

Kurgan-van Hentenryk divides Jewish banking activity into four phases:
the _Hofjuden_ period, the nineteenth century through the First World
War, the interwar/Nazi period, and the post-1945 years.  At all times,
she says, Jewish private banking based itself on trade -- whether in
commodities, capital, or most recently in ideas and services.  It is a
fascinating journey in many respects.  The author emphasizes that,
particularly before the 1850s, much of the Jewish private banking
story took place in Austria and the German states (Vienna,
Frankfurt-am-Main, Cologne, Hamburg, Berlin), from which it ramified
to other parts of Europe, the United States, and Europe’s colonial
possessions.

It is the story of financial diaspora.  It is also the story of
risk-taking in the face of adversity.  Much of Kurgan-van Hentenryk’s
essay discusses Jewish participation in projects many non-Jewish
private bankers spurned: railroads and early industrial finance.  In
this regard, Jewish private bankers, as described, were integral to
the early development and promotion of joint-stock banks that
culminated in the creation of the Crédit Mobilier in France, and the
so-called D-banks in Germany.  Kurgan-van Hentenryk illustrates the
quick changes to finance during the middle decades of the nineteenth
century with the new “mixed” banking or joint-stock instruments.
Joint-stock banks were, after all, as key to the finance of the 1871
Franco-Prussian War indemnity as private banks (Barings, Rothschild)
had been to the Napoleonic indemnity of 1815.  The shift of
instruments so profound over just a few decades seems worthy of the
phrase “Big Bang.”

What did not change was a certain anti-Semitism that persisted on the
Continent, of course, well into the twentieth century.  It was a
prejudice, according to Kurgan-van Hentenryk, not easily mitigated by
wealth, accomplishment, or education.  In this regard, she describes a
defensive and fascinating kind of clannish behavior, the important
role of women for family ties, and a historical pattern of strict
endogamy with a goal to deepen networks, and to conserve and increase
wealth among families.  Weaving through her account is the presence of
the Rothschilds, and it is unclear if the general fortunes of Jewish
bankers were hurt or helped by the blossoming of the Rothschild house
after 1815.  In this excellent account, the differences, if any,
between Sephardic, Ashkenazi, and even Hasidim Jews in their
associations, networks, or business successes are also unclear.  After
musing on the influence of Jewish financiers in politics, Kurgan-van
Hentenryk ends with a question –what path is next for Jewish private
bankers: integration or some sort of innovation?  Whatever the path,
she implies adaptability and survival for Jewish bankers, private or
not.

Following this account, Martin Körner turns our attention to
Protestant financiers, who he says operated “from Lisbon to St.
Petersburg” by the eighteenth century.  Though a minority, the place
of Protestant bankers was historically much less clear for Körner than
Jews are for Kurgan-van Hentenryk, even in the wake of the
Reformation.

Körner describes solidarity among Protestant bankers in the sixteenth
century, and the financial networks that started to form -- first in
several parts of Switzerland, later between various European
Protestant groups in the German states and between Huguenot factions
in France.  This said, Körner devotes most space to the growth of
Swiss (Calvinist) financial power, particularly in relation to France.
 He recounts in highly technical terms the money transfer routes of
Protestant bankers who used Geneva as a financial hub, and, like
several essays in this collection, Körner’s account is useful for
explaining the mechanics of government loan finance.  But the chapter
remains in large measure a description of Swiss Protestant bankers’
influence on the French crown.  Starting with the reign of Louis XIII,
Körner depicts the start of a sort of Huguenot haute banque which only
grew in influence with the French court as demand for capital
increased under the ambitious Louis XIV.  What is fascinating to see
here is Catholic monarchs who elevated Protestant bankers to positions
of social and political power in Catholic countries in periods of
inter-denominational pressure.  This is particularly arresting when
the pattern survived in France even after the 1685 revocation of the
Edict of Nantes.

It is indeed interesting to see Körner explain how Huguenots fled
France during her wars of religion and set up shop as merchants and
bankers in all the economic centers of Europe.  The difficulty here is
that, except for Paris, these other “economic centers of Europe” are,
in the main, given short attention.  And while this essay has clear
strengths, it leaves significant areas tantalizingly unaddressed.
Lutherans, Anglicans, Anabaptists, and Methodists are unmentioned, as
well as the regions in which they operated.  Did they form networks?
Even if this essay’s focus were only Swiss/Calvinist–French relations,
one large weakness would remain.  Körner does not provide a reason why
Catholic monarchs and princes did not employ Catholics bankers.  It is
true that Catholics at times accepted Protestants to avoid the
services of Jews, as Körner mentions, but were Catholic bankers
inadequate to solve the financial exigencies that befell France, for
example, after her Religious Wars?  Were the financial troubles of the
pre-Revolutionary decades so unusual that His Most Catholic Majesty
Louis XVI could only summon the services of the talented and
Protestant Jacques Necker?  Körner is frustratingly mute.

If Ferguson (Rothschild), Orbell (Barings), and Perkins (Brown et al.)
treat the overarching development of the private bank, the volume’s
editors, Youssef Cassis and Philip Cottrell, treat its crisis in two
substantial contributions.

In his masterful “Private Banks and the Onset of the Corporate
Economy,” Cassis describes the emergence of a “new bank” between 1835
and 1865 which he says represented a seismic change in savings and
financial participation by the populations of Europe.  This
joint-stock, deposit, and investment banking vehicle presaged the
onset of unprecedentedly large capital accumulations demanded by a
rapidly-industrializing European society in the half-century before
the First World War.

Cassis’ essay is a description of slow change across time, not decline
and quick fall.  It first reviews what a private bank was -- its
character, purpose, legal form, and pedigree.  Cassis then describes
the great advantage of the private bank in the long term: not the
servicing of small and medium-sized businesses in its various domestic
locales, but the financing of international trade and the issuance of
foreign loans -- that is, the exclusive world of the haute banque.
Though a French term, Cassis touches this idea of the haute banque
from Paris and Brussels to Berlin and Vienna, and the discussion is a
good complement to Plessis’ chapter.  However, if there is an emphasis
here, it is Britain where one can see the effect of joint-stock
banking on private bankers most clearly.  The decline of the private
banker, says Cassis, was no steeper than in Britain, “yet nowhere did
private bankers flourish more than in the City of London.”  Here he
presents the central paradox of the nineteenth century related to
joint-stock ascendancy: while private bankers lost ground as domestic
deposit institutions throughout Britain as a whole, they redoubled
their commitment to international activities which strengthened
financiers in the City, particularly in short-term acceptances.

Philip Cottrell drives home Cassis’ case of Britain with his study of
the actual mechanisms that changed finance in the City of London: by
legislation of 1826, the arrival of limited liability laws and the
explosion of domestic limited joint-stock banking in the early 1860s,
measures he calls collectively “London’s First ‘Big Bang.’” In
addition, Cottrell surveys the competition to private banks,
particularly in the international sphere after the growth of
joint-stock banks.  Written about so well by Geoffrey Jones, these
limited-liability laws followed by the 1862 Companies Act greatly
expanded overseas corporate banks and colonial banking, and even
spurred the formation of myriad varieties of finance companies.  “The
‘Big Bang’ largely sounded the death knell of personal private
enterprise within most of London’s financial markets,” writes
Cottrell.  “Private banking persisted in the City, but its days were
numbered.”  As Cottrell and Cassis comment, the decline would take
time, and David Kynaston also contributes to this discussion of
decline (see below).  Cassis and Cottrell (among others in this
collection) voice the central irony that private bankers themselves
sowed the seeds of their own destruction by sometimes creating
joint-stock banks as vehicles to finance industrial projects that, in
the end, despite the private bankers’ best efforts at control,
ultimately replaced them, certainly domestically.

 Dieter Ziegler gives us a look at Germany.  Specifically, he asserts
that Alexander Gerschenkron’s explanation for the first capital driver
of nineteenth-century German industrialization should be private
banks, not universal banks.  Here we have a specific substantiation of
Kurgan-van Hentenryk’s account (“Jewish Private Banks”) of the origins
of the D-banks.  We also have a substantiation of both Jewish and
private inputs to railroad and industrial finance before the full
onset of joint-stock banking, which was resisted with few exceptions
(e.g., Bavaria) throughout the German states, including Prussia.
Inspired by the Credit Mobilier after 1852, nevertheless, Ziegler
finds that innovative consortiums assembled by private bankers in the
German states and Hapsburg empire “proved to be the decisive factor
for the nascent universal banks” that financed the earliest railroad
projects (e.g. 1836, from Vienna to Bochnia in Galicia).

Of course, one of the facts of banking is that joint-stock banks began
to trump private bank capital in Europe and the United States after
1850.  Nevertheless, Ziegler is concerned with timing.  Gerschenkron
neglected to show that the first successful joint-stock banks were
founded by experienced private bankers.  Thus the start of
Gerschenkron’s leading sector take-off had a private bank
“spark-plug.”  By the mid-1850s when the first stock credit banks were
founded, the basic railway net connecting almost all important
Zollverein States was already built.

Ziegler says that historians should tweak Gerschenkron to include the
input of private bankers in the German industrial story.  What of
Italy?  Do we need to adjust Gerschenkron?  Luciano Segreto thinks so.
 In his “Private Bankers and Italian Industrialization,” Segreto
describes a pre-unification Italy with few consequential financial
institutions, a peninsular quilt of regions and cities through which a
few private bankers threaded their way often as Protestants or Jews,
and who had the strongest financial contacts with interests outside
Italy itself.  He finds no competence or inclination to cooperate on
anything like an Italian Zollverein.

At times, Segreto gives the impression of impatience with the
historical circumstances he describes before the birth of the Kingdom
of Italy.  In the pre-unification period, for example, Segreto
describes attempts to form Italian financial organs based on
sericulture or shipbuilding in the manner of Belgium’s Société
Générale, or the later Crédit Mobilier and Credit Anstalt.  He
laments, however, that these enterprises were “too advanced for the
times and above all for the socio-economic context in which [they]
operated, [which were before unification] still loath to make a
coherent commitment to industrial development.”

Many things changed in the 1870s.  Suddenly, there were national
projects and private bankers who had once individually identified only
with particular states or with foreign interests were called on to
underwrite large projects with a nationwide scope such as railroads --
so that bankers from Genoa, Turin, Livorno, and Florence were brought
together for a common purpose.  Cooperation also occurred on a
regional basis with no banking center more active than Milan, now free
from Austrian surveillance.  Segreto points out that, by the 1880s,
Milanese commercial banks had joined forces with banks in Turin and
Genoa.  The assembly of an Italian credit system led to a national
banking system and Segreto parallels the fever of bank establishment
with that of antebellum American or Meiji Japan.  In this expansive
environment, Segreto implies, private bankers with political ties were
active in such sectors as foodstuffs, petroleum, textiles, mining,
transport, and real estate but they were, in Segreto’s words, “flanked
by the large commercial banks.”

Unfortunately parts of this essay are quite difficult and vague,
making it unclear until the last section what exactly private bankers’
roles were in post-unification Italy.  Moreover, Segreto presents
mixed banks as a feature of Italy by 1914.  But it is far from clear
how we got here.  Whatever the path, however, the destination emerges
from Segreto’s essay.  He asserts that private bankers played a
particular role after 1890 -- something Segreto calls “functional
‘re-specialization.’”  After several decades in which “all operators
in the sector” (I assume financial) were kind of industrial-financial
generalists, Segreto finds that private bankers switched to the role
of facilitator and smooth point of contact between industry and the
mixed bank.  He sees  the private banker as the subtle deal-closer in
a mixed bank venue, and substantiates his assertion with a persuasive
chart that  lists private banker involvement in 31 major industrial
enterprises in Italy from 1884 to 1913.  Segreto also reports the
decline of private banker ranks in the years after the First World
War.  He implies that the less-than-subtle events of the 1920s and
1930s had something to do with this.

J.P. Morgan’s motto may have been to “write nothing” (ecrit rien).
When carried out, this makes business history research difficult.
However, written archives do exist and readers will find four sections
(five authors) on archives of various family businesses and banks in
this collection -- two British, one Continental, and the Rothschilds
that straddled both.  These essays break up _The World of Private
Banking_ nicely and provide updates, insights, and personnel connected
to research collections.  They also tease researchers with leads to
plug holes in the financial history literature.

Except perhaps for John Orbell’s chapter on the well-established
Barings, the archive chapters remind the reader that the nature of
archives is fluid.  Even with the oft-studied House of Rothschild,
Melanie Aspey points out that a large portion of records of the Vienna
branch were retrieved from Moscow less than a decade ago.  Aspey’s
partner on the Rothschild archive chapter, Victor Gray, corroborates
Niall Ferguson’s comment that the papers remain split among the
French, Austrian, English, German and the Italian (Naples) branches.
Of these, London is most complete.  But according to Gray, we may
never know what we are truly missing since all the Houses of
Rothschild were subject to what all private banks are subject:
periodic purging by family members.
Still, millions of letters need cataloguing due to volume, difficulty
of categorization, and language -- of which six are used in the
Rothschild papers.  Language is a barrier also to what Victor Gray
sees as the treasure trove of the House: the Judeo-German
(_Judendeutsch_) correspondence in German using Hebrew letters.  These
are Rothschild family and business letters used to skirt competitors
and to survive as Jews in the police state of Metternich.  As of 1998,
only one in seven of these letters was translated.  Additionally,
there are hundreds of thousands of international letters from
Rothschild correspondents and agents which are starting only now to
get scholarly attention, but remain largely unexplored.  John Orbell
mentions something similar about Barings’ London Wall accounting
records which (I can attest) are vast, complete, yet seldom used; and
await the eyes a scholar of a certain temperament.

As Gray and Aspey’s archive discussion complements Ferguson’s
Rothschild chapter, so Gabriele Teichmann’s discussion of the papers
of Salomon Oppenheim Jr. & Company complements Ziegler’s chapter on
private bankers and German industrialization.   For that matter, one
could sensibly pair it with Kurgan-van Hentenryk’s “Jewish Private
Banks.”

Teichmann’s chapter is useful as an advertisement for an archive of
intrinsic importance.  Oppenheim was an institution active in the many
industrial sectors of a country which, upon unification, proved the
most potent in twentieth-century Europe: Germany.  In her discussion
of archive resources and the Oppenheim family, Teichmann highlights
Cologne, a pivotal city for the history of the industrial Rhineland,
and hence for the history of twentieth century Europe.  And it is not
without irony that this contributor to German vitality was a Jew.

The last part of Teichmann’s account called “Social Studies” explores
family related topics of the Oppenheims.  This is the exclusive focus
of Fiona Maccoll’s “Banking and Family Archives” in this fourth of
four archives chapters.  Here, Maccoll reinforces the idea of family
as a cardinal difference between private and other bank types.
Initially, I found Maccoll too prolix with step-by-step family data --
that is to say, who said what, to whom, and when.  This task is for
the researcher to discover and present.  However, the archivist can be
the handmaiden in this endeavor, and Maccoll does this.  Her chapter
steers the reader to archival materials that involve people, family,
and relationships.  Seemingly banal, the idea of family was one of the
distinguishing entrance criteria for private bankers until its
twilight in the late twentieth century.  And it is the potential for
personal information relevant to operations that is so seductive about
the Rothschild _Judendeutsch_ letters, according to Gray and Aspey.
For Maccoll, though, family papers provide data on private banking
operations -- sometimes indirect, sometimes oblique -- that simply
does not exist in other banking venues.

Some material in these chapters will not be as useful to those
familiar to archives as to those newer to the field.  Still, the range
presented here from French (Gray and Aspey) to German (Teichmann) to
British (Maccoll and Orbell) has something for everyone, regardless of
experience.  Finally, the internet has transformed so many things, and
private bank archives are no exception. Gray addresses these issues at
some length in regard to the Rothschild archives.

I suppose it could be said that a banker spends half his life making
money, the other half giving it away.  Pat Thane touches on the issue
of “giving it away” in her chapter “Private Banking and Philanthropy:
the City of London, 1880s-1920s.”  It is one of the half dozen essays
one should read here if pressed for time, not for its superiority per
se, but because it bears on a dimension of money-making not touched
elsewhere in the collection.  Thane’s chronological focus is tight,
her themes limited for the most part to the British Royals and Jewish
philanthropy, and her essay is effective as it stands.  Readers may
grow impatient with Thane’s dependence on Frank Prochaska’s work for
her Edwardian discussion.  And though there is rich coverage of Baron
and Baroness de Hirsch, the Bischoffsheims, and Ernest Cassel, some
will likely find the account less than satisfying with Schroeder’s the
sole House outside the Jewish sphere.  What of Barings, Hambro, and
Coutts, or the Quaker legacy?  To say nothing of moving the chronology
to the earlier decades of the nineteenth century?  These queries
aside, I suspect that the ambition of the essay was deliberately and
ruthlessly limited, and, for what it does, it does quite well.  My
complaints are meant to inspire others to complete the task that Thane
has begun.  She has whetted appetites terrifically.

David Kynaston closes this collection with thoughts on the years in
the City after private banking’s “moment” has passed: its denouement
from 1914 to 1986.  He depicts a vocation aware of its decline -- a
“closed world, in which family, wealth and social connections counted
for more than industry or ability.”  He describes a world anchored to
a past ideal, a pre-1914 order of Old Etonians, ill-suited to compete
in a time that was starting to see nothing irregular or wrong with the
rise of a clerk to bank president.  One example of Kynaston’s idea of
nebulous decline  is Edmund de Rothschild’s 1998 memoir, _A Gilt-Edged
Life_.  Here, Kynaston describes a floating comfortable life; a scion
of a rather laconic, somewhat frivolous dying breed -- reminiscent of
the exhaustion of Thomas Mann’s _Buddenbrooks_ -- without the animal
spirits needed to survive in the rough and tumble world of the later
twentieth century.    Kynaston  illustrates this sense of floating
among private banking families with other convincing anecdotes of the
1950s, 1960s, and 1970s.  The second “Big Bang”  (see Cottrell for the
first) made this intangible sense of  drift and decline abruptly
concrete for the private City banker in 1986, as the Houses of Lazard,
Warburg,  Hill Samuel, and others -- once financial whales -- became
minnows, and new whales arose with names like Citibank, Chase
Manhattan, and Banker’s Trust.  My own work on Barings illustrates
this well.  Its conservative principles allowed the partnership to
weather the Panic of 1837 brilliantly.  Unfortunately, Barings’
culture learned the wrong lessons from these successes, and it failed
to adapt and innovate in later years.  Indeed, the first time Sir
Peter Baring had heard of the “clerk” Nicholas Leeson, it was too
late.  Certainly in its classic form, Kynaston artfully declares the
demise of private banking in the City, for only after death can one
call for obituaries, which he does.  In the main, the private banks
are gone.  Long live the private banks, Kynaston says -- in house
histories!

One need not read this book chapter by chapter in order.  I recommend
the reader start anywhere in the book and fan out.  I have followed
this free course in my remarks above.

In closing, one of the virtues of this collection is the overlapping
explanations by several authors of the same terms of trade and
finance.  Multiple mentions of acceptances, bills of exchange, country
banks, merchant banking in different contexts, as well as key dates in
the financial history of the period that this volume represents
provide a review for the expert, a primer for the novice.

Technically, I appreciated the publisher’s choice to choose footnotes
over less convenient endnotes.  Wherever located though, the citations
and bibliography present a fantastic tour of current and classical
literature on finance and banking with lacunae only of Peter Temin,
W.W. Rostow, John McCusker, and Peter Rousseau.

This is not easy material.  However, the level of writing in this
volume is high, no doubt made higher by skilled editing.  The uses of
this collection are many, not least as a tonic for the current
American fashion to present globalization as something new.  On most
every page, one finds accounts of men and organizations working in the
business of international affairs, indeed global since the start of
the nineteenth century.  Part research guide, part family history and
part financial/trade primer, this collection is, finally, part
museum-piece -- for the world of the private banker is largely gone.
Nonetheless, like good museums, this book repays a visit, has much to
teach about the present, and presents important things knowledgably
and with style.


Peter E. Austin is a historian at St. Edward’s University in Austin.
He is the author of _Baring Brothers and the Birth of Modern Finance_
(Pickering & Chatto, 2007).  He is currently at work on a book on the
1960s.

Copyright (c) 2010 by EH.Net. All rights reserved. This work may be
copied for non-profit educational uses if proper credit is given to
the author and the list. For other permission, please contact the
EH.Net Administrator ([log in to unmask]). Published by EH.Net (June
2010). All EH.Net reviews are archived at
http://www.eh.net/BookReview.
-------------- FOOTER TO EH.NET BOOK REVIEW  --------------
EH.Net-Review mailing list
[log in to unmask]
http://eh.net/mailman/listinfo/eh.net-review