In 1896, twenty private banking firms joined together to form Barclay and Company Limited in what the banking press at the time referred to as a merger of the 'well-known Quaker firms'.
Although very few of the people involved in the amalgamation were still practising Quakers, they were quite happy to preserve the Quakerly image of frugality, prudence and trustworthiness. So, why was Quakerism so prevalent amongst the Barclays founders, and what difference did it make to their lives and business?
1896 amalgamation: 20 private banks
|Barclay, Bevan, Tritton and Co, London
||Goslings and Sharpe, London
|Jonathan Backhouse and Co, Darlington
||Molineux, Whitfield and Co, Lewes
|Gurney and Co, Norwich
||Sparrow, Tuffnell and Co, Essex
|Gurneys and Co, King’s Lynn
||Sharples, Tuke, Lucas and Seebohm, Hitchin
|Gurneys and Co, Fakenham
||J Mortlock and Co, Cambridge
|Gurneys and Co, Halesworth
||Fordham, Gibson and Co, Royston
|Gurneys and Co, Great Yarmouth
||Gibson, Tuke and Gibson, Saffron Walden
|Gurney and Co, Wisbech
||Bassett, Son and Harris, Leighton Buzzard
|Gurneys, Alexanders and Co, Ipswich
||Woodall, Hebden and Co, Scarborough
|Gurneys and Co, Colchester
||Veasey, Desborough and Co, Huntingdon
Who were the Quakers?
The Quakers are more properly known as the Society of Friends. They were founded during the 1650s by George Fox, and believe that there is something of God in everyone, and that therefore everyone is created equal. They do not believe in war, or in taking oaths, and do not have a clergy, or a prescribed form of worship. They generally believe in living a simple life, which is often reflected in their speech and dress.
With their persistent refusal to conform to the standard practices of the day, the Quakers were seen as a threat by the Establishment, and were severely persecuted. Their meetings were banned and their determination to continue in spite of this saw 6,000 Quakers imprisoned between 1662 and 1670. Additionally, the Quakers refused to pay their Tithe (a tax payable to the Church) and often faced severe financial punishments as a result.
Their own beliefs, coupled with their exclusion from mainstream establishments meant that many professions and occupations were not open to Quakers. For example, their pacifism ruled out a military career, and their refusal to take oaths made them ineligible for the Law. As a result, many Quakers simply established their own business, relying on their own hard work and moral code to become trusted and respected figures within their communities.
The Barclay Connection
Barclays’ business can be traced back to two Quakers, John Freame and Thomas Gould, who established themselves as goldsmith bankers in Lombard Street in the City of London in 1690. Their business flourished, helped in no small part by its Quaker connections. They financed Quaker traders in the new colonies in America and the Caribbean, they helped to finance the Pennsylvania Land Company, and they were actively involved in Quaker-dominated companies like the London Lead Company and the Welsh Copper Company. The latter produced silver as a by-product, which Freame and Gould then sold to the Royal Mint. They were also the closest thing the Quakers had to an official banker, holding the Society of Friends' central funds (known as the national stock). In 1695, this amounted to £1,100.
Beyond his bank, John Freame was a very well-respected and influential character. He served as clerk to the Yearly Meeting (the Quakers' annual gathering attended by local representatives from all over the country), and published a book called 'Scripture Instruction' which was used in Quaker schools. He also campaigned for greater toleration for the Quakers, achieving the right to make an affirmation rather than swear an oath, and the right to be prosecuted before magistrates rather than in the church courts.
In 1728, Freame's son, Joseph, became a partner in the Bank, and John Freame began a gradual process of retirement. James Barclay joined the firm in 1733, having married Freame's daughter, Sarah. James was the son of David Barclay by his first wife, Ann. Following the death of Ann, David Barclay married Freame's elder daughter Priscilla in 1723. This rather complicated state of affairs meant that James Barclay's stepmother was also his sister-in-law, but is quite typical of the way the Quakers ran their lives and businesses. Family, religious and business ties were inextricably linked.
James Barclay had a strong business and Quaker background. His grandfather, Robert Barclay, was known as 'the Apologist' because he wrote a book explaining the Quakers' beliefs, entitled, 'Apology for the True Christian Divinity.'
Although David Barclay senior did not become a partner in the Bank, his sons, by his second wife (and, therefore, John Freame's grandsons), David Barclay the younger and John Barclay did. By this time, the partners were amassing fortunes which may have seemed at odds with the Quaker principles of simple and plain living, but it is important to remember that a Quaker who went bankrupt was disowned by the Society.
While the fear of bankruptcy may have spurred the Barclays on to ever greater profitability, they still had not lost sight of other Quaker virtues. David Barclay the younger, who became a partner in the Bank in 1776, was a very active Quaker. A keen supporter of the emancipation campaigner William Wilberforce, he used his influence to persuade other Quakers to take a stronger stand for the abolition of slavery. Later, David Barclay found himself the owner of a slave plantation in Jamaica in settlement of a debt. His decision to free the slaves and transport them to Philadelphia cost him £3,000.
Barclay was also well-respected in the wider community. A close friend of Benjamin Franklin, he attempted to mediate between the rebellious colonists in America and the British Government in 1774 and 1775. He must have suspected the worst, however, because he had been redirecting his own business interests away from North America for some time. It would appear that even the span of the Atlantic Ocean could not disrupt Quaker business connections, with the large number of Friends who settled in America making sure that their British cousins were kept well informed.
While banks in London were thriving, banking in the rest of England was only just beginning. One of the earliest 'country banks' in Barclays’ history is that established in 1744 by Samuel Alexander in Needham Market in Suffolk. Alexander was a Quaker merchant with interests in the iron and corn trade. In what was to become a regular pattern in rural areas and market towns all over England, Alexander was perceived by his customers to be a trustworthy, reliable and relatively wealthy man, so they felt happy entrusting their money to his care. His faith undoubtedly played an important part in forming this opinion, and also meant that he had access to the Friends' business network, and was able to call upon the Barclays to act as his London agent.
Alexander's went on to merge with Gurney’s, the biggest country bank to take part in the 1896 amalgamation. The Gurney business began with the Norwich and Norfolk Bank, opened by Quaker brothers, John and Henry Gurney on 13 May 1775. They had made their money as worsted, linen and yarn merchants. As banking became more profitable than cloth, their business expanded and they established partnerships in Great Yarmouth, Kings Lynn, Wisbech, Fakenham, Ipswich, Colchester and Halesworth. By 1838, the Gurneys were described as
exercising an influence and a power inferior to that of no banking establishment in Great Britain - that of the Bank of England alone excepted.
Like many successful Quakers, some of the Gurneys found it difficult to reconcile their faith with their wealth. Joseph John Gurney chose to become a ‘plain Friend,’ dedicating his life to his bank, his religion and good causes. Like his sister, Elizabeth Fry, he campaigned for prison reform. He also campaigned against slavery, and in 1837 went on a three year ministering tour of the West Indies and America, giving away one third of his share of the bank's profits for the duration. He was a renowned Quaker author, and his 1824 work, 'Observations on the Religious Peculiarities of the Society of Friends' was reprinted several times. His attitude is exemplified by his statement;
I suppose my leading outward object in life may be said to be the Bank. While I am a banker the Bank must be attended to. It is obviously the religious duty of a trustee to so large an amount to be diligent in watching his trust.
The Gurney name is also famous for its involvement in Overend, Gurney and Company, a firm of London bill brokers which failed spectacularly in 1866, prompting a financial crisis. Although members of the Gurney family were implicated and affected by the failure, the Gurneys’ East Anglian banks came through remarkably unscathed, due mainly to quick thinking and shrewd judgement by their Barclay cousins. By injecting new capital and new partners into the Norwich bank, they effectively distanced it from the bill broking business just one month before it crashed. While the very public failure of one Quaker business was highly regrettable, it had clearly been beyond saving, and ruthless action had been needed to prevent other businesses going down with Overend, Gurney and Company.
In The North East
Like the Gurneys, James Backhouse and his son Jonathan were Quakers who made their money in cloth - they manufactured linen and worsted. Based in Darlington, their bank had begun as a sideline, but it developed to such an extent that it became a properly constituted partnership in 1774. Jonathan's son, Jonathan Backhouse junior joined the firm, and in 1811 married Hannah Chapman Gurney, a cousin of Joseph John Gurney and Elizabeth Fry. A highly respected and influential figure in a region that was about to undergo a period of massive industrialisation, Jonathan Backhouse was instrumental in the financing and planning of the Stockton and Darlington Railway, and served as its first treasurer until 1833. At that time, he retired from both the bank and his other commitments, to devote the last nine years of his life to full-time ministry in the Society of Friends.
On a number of occasions during the nineteenth century, the Backhouse bank seems to have been on the verge of collapse due, not to mismanagement by the Backhouses, but to malicious rumours spread by those who wished them ill. On one occasion, for example, they clashed with the Earl of Darlington over the new railway, and he tried to induce a run on the bank. It is a testament to their standing within the community that they were able to withstand such attempts, often with the very public support of a great many local people.
However, the following tale from the beginning of the nineteenth century shows that Quakers were still regarded with suspicion by some:
A commercial traveller, having dined freely at the King's Head in Barnard Castle, was boasting to the company of his own importance and wealth and exhibiting, in proof, a sheaf of bank notes taken on his journey. Jonathan Backhouse, attired in the usual dress of the Society of Friends, and unknown to the rest of the company, was in the room quietly reading his newspaper, when he was lambasted by the wealthy traveller, and held up to ridicule as a man out of harmony with the spirit of the time and place. The traveller, displaying his handful of notes, offered to bet the Quaker £5 that he could not produce as much money as he was exhibiting. Mr Backhouse, after a great deal of banter, said he did not bet, but to show his indifference to money offered to put a £5 note in the fire if the man would do the same. Mr Backhouse took out a £5 note and put it in the fire. The man, not wishing to be bested, did the same. Backhouse offered to repeat the process, but the man, considerably cowed, declined. Backhouse quietly thanked him for having burned a Backhouse bank note, for which he had received £5, while the note he had burned himself had cost him nothing but the paper.
Friends and Relations
The Barclays, Gurneys and Backhouses formed the nucleus around which the 1896 amalgamation that formed Barclay and Company Limited took place. Although, by that point, only the Backhouses were still practising Quakers, the business and family links that had been established over the course of the previous 200 years provided the business with strong and trusted foundations.