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7 - Wealth and Power: 1910–1914

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Summary

In the years before the First World War the City of London reached its peak of global influence. Located in this one small district of the metropolis of London were some of the most important commercial markets in the world, with the most influential financial institutions in the shape of the Bank of England, Lloyds and the London Stock Exchange, and many of the world's largest banking and insurance companies. In addition, it was from the City of London that international trade, finance and shipping was organized, facilitating the global distribution of money and merchandise. However, most of these varied activities, though widely recognized and admired, only dimly impinged upon the public imagination, being conducted in a dull and routine manner and of a highly technical nature. In contrast, it was events on the Stock Exchange that continued to absorb most public interest, with the rise and fall of prices being attributed to the manipulation of insiders, especially in mining and oil companies. The fortunes of individual companies also attracted attention, especially newly promoted ones, as any sudden bankruptcy, bringing ruin to investors, could be laid at the feet of a financial genius or scheming fraudster. Thus, along with the brokers and jobbers who daily bought and sold shares, it was company promoters and their constant stream of offerings that helped identify the City of London in the public mind. The period also witnessed both a speculative mania, centring on rubber plantation companies, and a run on the Birkbeck Bank in 1910 followed by its collapse in 1911. There was even a scandal in 1912 over accusations of insider trading, involving prominent members of the Liberal government, Sir Herbert Samuel and Sir Rufus Isaacs, and the chairman of the Marconi Company, Godfrey Isaacs, who was the brother of Sir Rufus. Above all, the public were especially fascinated by the personification of the City in the shape of certain flamboyant and newsworthy financiers that appeared to thrive in its precincts, with again many of the most prominent being Jewish or foreign or both, such as Barney Barnato, Ernest Cassel, and Saemy Japhet. This raises the question of which was more important in determining the place of the City in British culture.

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Guilty Money
The City of London in Victorian and Edwardian Culture, 1815–1914
, pp. 191 - 228
Publisher: Pickering & Chatto
First published in: 2014

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