How The City Developed, Part Ten: The Victorians

The Victorian years saw a period of massive expansion, both in terms of Empire consolidation and industrialisation as the railway revolution led to revolutions in much more.

People could now travel between cities, moving goods and services rapidly by steam train to ports and across continents.

The world was becoming connected and the invention of steam power, railways, lighting, paper, telephone and telegraph, only served to move the world forward rapidly towards something not that far distant to the one we enjoy today.

The industrialisation of the world had its origins in Britain, and Britain enjoyed unprecedented wealth and expansion under the watchful eye of Queen Victoria as a result.

And Victorian influence can be seen in almost every corner of the world from India to America, Australia to China, Africa to Argentina.

The Victoria Memorial Hall, Kolkata, India

During this time, bankers came to the fore as wealthy industrialists, with names such as Rothschild and Peabody being some of the most famous.

Notably, many of these wealthy bankers felt a deep sense of morality about their money.

Their moral compass was firmly influenced by religion and many gave back as much as they received to ensure that poverty, health, schooling and more were invested in effectively to raise the standards of living for all.

Many bank industrialists were Quakers for example, who hated avarice – greed – so they consciously worked to “use their wealth to better the world” rather than themselves (something that SWIFT’s innotribe is also working towards today).

Leaders of such philanthropy were the Gurneys of Norfolk, a staunchly Quaker family who ran a successful operation through the nineteenth century across the East Anglia region and, at the end of the century, merged with others to form what is now known as Barclays Bank.

Another leading philanthropist was George Peabody, an American entrepreneur who moved to London in 1837 and set up the bank George Peabody & Co. in London.  As he reached success in finance and business, he gave more and more of his wealth to ensure there was decent housing for the poor and is known to have donated at least $8 million, around $600 million in today’s value, during his lifetime.

Even now, there are around 50,000 people housed in 20,000 properties across London, thanks to his benefaction.

Nathan Rothschild, known as Natty, also gave away a lot of his wealth to fund philanthropic ventures as did Angela Burdett-Coutts.

There were many examples of such philanthropic finance, summarised in a recent documentary on the BBC about “when bankers were good”, presented by the satirist Ian Hislop ...

Of course, there are plenty of other examples of bad banking in Britain during the Victorian years, such as the Royal British Bank scandal of 1856, and the collapse of Overend and Gurney in 1866 and Barings in 1890, which led to the Bank of England gaining more prominence in its role as lender of last resort – but the general leadership of finance and industry working hand-in-hand to build a better world for all was a lesson that unfortunately has been forgotten in recent years.

Probably, as a result of the recent crisis, this lesson will be learned again.

Meanwhile, the influence of Victorian Britain and its practices meant that the foundations of the City of London, its banks and operations, became the model of influence for all financial trade practices worldwide.

This is the tenth in a series about how the City of London developed its financial prowess and system.  

Previous entries include:

• Part One: The Romans
• Part Two: The Vikings
• Part Three: Medieval Times
• Part Four: The Tudors
• Part Five: The Stuarts
• Part Six: The Bank of England
• Part Seven: Lloyd's of London
• Part Eight: The London Stock Exchange
• Part Nine: The 1700s
• Part Ten: The Victorians
• Part Eleven: World Wars
• Part Twelve: After World War II
• Part Thirteen: The Big Bang
• Part Fourteen: Crisis