This article was first published in the December 2011 issue of BBC History Magazine
Bankers, it’s safe to say, are not universally loved right now. Widely castigated for their involvement in the financial crisis and then further deplored for continuing to accept bonuses, their stock can rarely have been lower. A 2011 global survey found that only 43 per cent of respondents trusted bankers, while in the UK that number was a mere 27 per cent.
Vitriol has been directed towards the banking industry from politicians, the press and the public at large. One tabloid journalist recommended putting errant bankers in the stocks. Another suggested a tour of duty in Helmand.
So how can Britain’s reviled bankers seek to restore their battered reputations? Ian Hislop believes they could take inspiration from some of their 19th-century predecessors. In his new documentary When Bankers Were Good, Hislop profiles a handful of financiers who, having compiled vast wads of cash, decided to give something back – quite a lot in fact.
When Angela Burdett-Coutts died in 1906, almost 30,000 people came to pay their respects. Seventy years earlier she had become heir to the Coutts banking fortune and decided to put her money to good use. She went on to support a wide variety of charitable causes, assisting the church, the poor, the hungry and even – as president of the British Goat Society – domestic animals. By the time she passed away it was estimated that she had given away over £3m – that’s the equivalent of £240m today.
Another philanthropic banker singled out by Hislop is George Peabody (1795–1869) who spent £500,000 on decent affordable housing for London’s poor. Nathaniel Rothschild (1840–1915) also funded cheap dwellings as part of his extensive charitable work, much of which was in support of Jewish immigrants to the country. Then there was Samuel Gurney (1786–1856), part of a Norwich-based banking family, whose philanthropic activities included support for the prison reform work of his sister Elizabeth Fry.
“The extent of what these people gave away is mind-blowing,” says Hislop. “I went to the Peabody Trust and saw these old documents and you just think ‘god, he’s given £100,000 there’ and ‘look, there’s another £200,000!’ If you consider the increase in property prices it is almost incalculable what George Peabody gave.”
The motivation for some of these philanthropic bankers, according to Hislop, was their religious faith. “The Gurneys were Quakers and for them this was almost a duty. They weren’t quite sure they should even have got rich in the first place, so getting rid of their money was part and parcel of their Low Church zeal.” Similarly with Rothschild, charity was not an option. “Under his Jewish religion it was an obligation, something you had to do. Albeit he did it on a very large scale.”
Faith was not the driving force in every case, however. “George Peabody is difficult to gauge because he was not a religious man and had a reputation as a bit of a Scrooge,” Hislop explains. “I say in the programme that I really hope he was visited by ghosts in nightshirts. It’s very difficult to know what the real reason was.”
Of course not all 19th-century bankers were as virtuous as George Peabody or Angela Burdett-Coutts. Then as now there were unscrupulous financiers who made off with people’s savings at a time when regulations were far lighter than today. “People speculated, there were runs on the banks and banks did collapse,” says Hislop. “Andrew Wilson described it as a casino where people wore top hats.”
As Hislop points out, 19th-century fiction contained its fair share of villainous bankers, some based on real characters. One of the best known is Mr Merdle, a wealthy scoundrel from Charles Dickens’s 1857 classic Little Dorrit. In Dickens’s words, Merdle was “immensely rich; a man of prodigious enterprise, a Midas without the ears, who turned all he touched to gold”. Unfortunately, his riches were built on air and when his insolvency was about to emerge Merdle took his own life with a mother of pearl penknife. The resulting financial mayhem brought his posthumous reputation so low that his former supporters “would have done better to worship the Devil point-blank”.
Merdle is said to have been modelled on John Sadleir, an Irish banker, notorious for his financial swindles. In February 1856, unable to cope with mounting debts, Sadleir took his own life by drinking prussic acid. The Glasgow Herald reported that the poison “was enough to have destroyed fifty men”. In the aftermath of Sadleir’s suicide his relatives and associates were left to face his furious creditors.
There were undoubtedly bad eggs in the Victorian banking world, but Hislop feels that the culture of banking still had an element of trust that is missing today. “I suppose it was because they all started off as family banks and as people who you actually knew,” explains Hislop. “When I interviewed a bloke from the Financial Services Authority he was saying that that is one of the problems with modern banking. There’s a bloke in braces sitting in a dealing room 2,000 miles away who doesn’t feel a huge responsibility about a transaction that he is making.”
Hislop worries that today’s bankers live in an era where “greed is good” and where higher taxation discourages them from personal giving. All the same, as the likes of Bill Gates and Warren Buffett in the US have shown, large-scale philanthropy is still possible in the modern world. And Hislop is in little doubt that similar gestures on the part of Britain’s bankers “would certainly improve their reputation”.
Back in 1906 The Times wrote that the life of Angela Burdett-Coutts “stands next to that of Queen Victoria herself in the Victorian era. It would not be possible here and now to enumerate her countless services to humanity.” What would a 21st-century banker give to receive an obituary like that?
Ian Hislop is a writer and broadcaster who has edited Private Eye for 25 years. He is also a longstanding panellist on the BBC news quiz Have I Got News for You. Hislop’s When Bankers Were Good will be broadcast on BBC Two in November.