As we continue our
studies into the beginnings of the relationship between banking and finance to
merchant houses it is becoming clearer that the major players whether British
or American cannot escape the less nor more careful eye.
We have already
discussed Russell and Company, Jardine Matheson & Company, and have shared
a podcast on Augustine Heard and Company. We then come across Russell Sturgis
and Company which,
... Russells’
competitors despaired of the awesome lock on profits this triangle possessed, which
only deepened with the absorption of Russell, Sturgis & Company by Russell
& Company in 1839.”
While further diving
into Baring Brothers and the Birth of Modern Finance we find,
“In spring 1832,
Thomas Ward made a new and important Far Eastern arrangement for the House. He
concluded an agreement with Russell & Company – the largest, oldest and
most prestigious American commission House in China. The agreement gave Russell
the right to draw on Barings. A drawing account added a quantitative advantage
to the American firm in a part of the world where financial resources were
relatively scarce. It also added a qualitative element by bullet-proofing
Russell’s bills throughout the Far East. In return, Russell provided Barings
with access to its thriving businesses in Manila and South Asia; and to the Turkish
opium concession Russell acquired from Perkins & Company in 1830, a firm
with which Barings had long done business.222”
An interesting
connection between a merchant house and a trading house turned bank.[1] Continuing,
Russell Sturgis
and Company as stated above was absorbed by Russell and Company in 1839. Russell
Sturgis after haven established a branch of the family firm in 1834 became a
prominent member of Baring Brothers by 1851.[2] So, Baring Brothers one of
the earliest banks arguably the first if not Berenberg Bank was tied to Russell
and Company, Russell Sturgis, and Jardine, Matheson and Company right around the
time of the end of the monopoly on trade held by the British East India Company.
We
have explored how governments, corporations or merchant and trading houses, churches,
and now the banking and finance community are indeed working together and have
for quite some time. As discussed in an earlier blog post, the connection between
corporations and banks also can lead to corporate heads assisting in the
establishment and even the directorship of banks.
“Heard’s was among the firms of
‘repute and distinction’ convened by Thomas Sutherland to establish The
Hongkong and Shanghai Banking Corporation in 1864: Albert Heard served as a
member of the provisional committee and as a director of the Bank (1865-67).
Later George was also a director and served a term as chairman.”
As we continue down this rabbit hole the discovery
of connections between entities are immense.
Until next time …
What Matters - Sir Thomas Sutherland and the Board of HSBC (google.com)
References
Austin, Peter E. Baring Brothers and the Birth of
Modern Finance. Ed. Robert E. Wright. London: Pickering & Chatto
(Publishers) Limited, 2007. Book.
Gillian Bickley, Peter E Hamilton and George
Cautherley. "Augustine Heard & Company, major American 19th century
China trading house with its headquarters in Hong Kong from 1856." Dictionary
of Hong Kong Biography 1 November 2011: 544. website. 17 3 2023. <https://industrialhistoryhk.org/augustine-heard-company/>.
