G
HIK HOUSE Ob OVKItliNI), 1VH
WHY, AND COMPANY
Its Fointdtm nncj It Pull.
Ttic Gtrrncys hold ft JU' c almost unique in
commercial biography. Nearly all ttic great
merchants ot the world have been men who
have iifccn lrom the ciovd by ttieir ova ea'ei
prise, and, beginning in snail ways, Iiavc mailt!
tor themselves names and reputations ns succev
lul traders and uieu ol wealth und influence;
mid their sons or gtund'-ons have generally
abandoned the coinmcice that has helped iUo u
to d.stinetion. eager to mix with those of run
mid title older than their own, und willing, if
they can, to lorget by what means tlcy have
been enabled to enter the circle of aristocracy.
A goodly number of the titled families of Bng
land owe their origin to old merchants and shop
keepers; but thetr modern representatives have
nothing to do with trade, and look upon it us
thing altogcth'-r beneath them. In the Car
ney, on the other hand, we see the almost soli
tary instance of an ancient nuuily that, in later
times, has not been ashamed to engage in com
merce, and has drawn from it a dignity as great
as any that could come lrom lengthy pedigrees
and the traditions of bygone ages.'
Tticy are descended lrom a Hugh de Gournay,
Ixird ot Gournay and the adjacent Baiony of Lu
Krai, who in 1054 commauded at tho battle of
Mortimer, and in lOiiii accompanied William the
Conqueror to Eng land. To him and his succes
sors were made large grants In .NorfolK, Suffolk,
and else where: and uie Gournay were men of
mark during the ensuing centuries. Oncol his
descendants was Edmund Gournay, Recorder
of rorwicb, in the reign of Edward 111; aud
from ihat time to this Norwich has always been
the residence of some members of the'lamily.
The most notable of his successors, as tar as wc
are concerned, was a Frauds Gournay, or Gur
uay, who was born about the Tear 1500. lie
seems to have been a native of Norwich, and ho
B'arried the daughter of a Norwich merchant;
but the greater part of his life was spent in
London.' In ltlOtj be was made a member of the
Guild ot Merchant Tailors, and for some years
he lived in Broad street ward, in the Parish of
taint Mary Benetinck. working as a merchant.
There was another merchant ol his name, anil
a much more lamous man, living in Loudon at
the same time, though apparently not of th
same family, Sir Kichard Guruey was born at
Croydon in 1577. He ws.s apprenticed to Mr.
Kichard Cu.eby, a silkman in Cbeapside, wuo
so liked him that, at his death, lie bequcatod to
him his shop and a sum ot 0000. Part of thai
money he spent in travertins through Fram e
and Italy, "where," says his old biographer,
"he improved himself, and, by observing the
trade of the respective marts as he passed, laid
the foundation of his tuttire tratlic " Soon
alter his return.it is a ided, being himself of
no great family, he discreetly married "into a
lamily at that time commanding most of the
money, and, by that, most of the nobility,
pentry, and great tradesmen of England."
Thereby he became a gicat merchant and
a very wealthy man. lie was Sheriir of
London in 1G34, and Lord Mayor in
1641. He was a great benefactor to the Cloth
worker's Company, oi which he, was a memb'-r
and warden, aud lie gave freely to all sorts of
city cuaiities. Ho also, being a sturdy Royalist,
lent or gave immense sums ol money to King
Charles I; at one time, on his Majesty's return
from Scotland, spending 1000 in entertaining
him. He was ona of the ereat champions of
Charles' cause in the city, during the commence
ment of the Commonwealth b?i iigglc. InlGiO,
when he was sixty-three years old, it is recorded,
"One night, with thirty or forty lights and a
few attendants, he rusiied suddenly out of the
house on thousands, witli the city sword
drawn, who Immediately retired to their own
houses and crave over their designs." This excess
of loyalty, however, caused his ruin. In KiJU
he was ejected lrom his Mayoralty and lodged
in the Tower. There, for refusing to pay ttic
line of 5000 appointed by Parliament, he was
kept a prisoner for seven years, and there he
died in 101!).
His contemnorary, Francis Gournay. had his
share of trouble. On tne 17th of June, 1022, the
corporation of Lynn lent to him and two part
ners of his a sum of 200, for "setting the poor
to work within the town." According to the
terms of the agreement between them, the
money was to be repaid in three years' time,
and in the meanwhile Gournay was "lo freely
provide, find, and deliver sulJiclent wool and
other material to all those poor people dwelling
within the borough who shall come to be set on
work in spinning of worsted yarn." He was
also to instruct all the poor children who were
pent to him in the spinning of wool; in fact,
lie was to do all he could to establish in
the town a branch of the woollen manufac
ture that for some time putt had forinod
the chief business of Norwich and its neighbor
hood. Therein, however, he failed. Good
churchmen attributed the failure to the circum
stance that his factory was a desecrated church.
A century before, it seems, the corporation of
Lynn had received certain monasteries and eccle
siastical foundations duriug the spoliation under
Hcnry.VllI. One of these, the church of Saint
James, in Lynn, uccordiug to Sir Henry Spel
man, was "perverted to be a town house for t lie
manufacture of stuffs, laces, aud tradesmen's
commodities, whereby they thought greatly to
enrich their corporation and themselves. Great
projects and good stocks, with a contribution
from some country gentlemen, were raised for
this purpose two several times, to my know
ledge. But the success was that it came to
nought, and all the money employed about new
building and transforming the church hath
only increased desolation; lor so it hath
stood during the whole tune almost ot my
memory, till they lately attempted, by the under
taking of Mr. Francis Gournay aud some
artisaua from London, lo revive the enterprise
of their predecessors; but, speeding no better
than they did, have now again, with loss of
their money and expectation, left it to tuture
ruin."
Whotevcr was the came of it, Francis Oour
nay's experiment failed. He was not able to
pay back the money he had borrowed from the
corporation, and lie seems to have been in
Irouble, by reason ot it, to the cud of his life.
J-lis son, Franci6, born In 102H, was a merchant
or shopkeeper at Maldon, in Essex, and appar
ently a man of not much substance. But the
fortunes of the house were revived by old
Francis Gournay'.? grandson, John Gourn'ey, or
Gurney, of Norwich. He was born at Malton
on the 7th of October, l(j55, aud, as soon as ho
was old enough, was apprenticed to Daniel
Oilman, a cordwainer of Norwich. For a
time his business energies were restrained
by the bigotry of his fellow-townsmen.
Homo flve-and-twenty years after George
Pox's public preaeLing of the doctrines
ot the Society ol Friends, before 167K, at any
rate, John t.urncy became a couve.it to those
doctrines, lie was one ot the fourteen hundred
ana sixty Quakers imprisoned ou account of
their religious opinions, and tor three vears he
lay in Norwich Jail. After that he was released;
but still considerable diflieulty arose through
ins retural to take the lreetnau's oath renuired
uuiun- iiu count ou auo we i 10 practise as a mer
chant within the city walls. Ar last, however,
an exception was made in nis tavor, und tor
nome thirty years or more he win a famous mid
-very thriving merchant at Norwich, living at a
liouso in Saint Augustine's parish. lie was
chiefly engaged in trade with the silk and wool
dealers of France and the Continent, lie hail
connections in Holland, among others with the
Hopes of Amsterdam, just then entering ou
their wonderful csreer of commercial pros
perity. i,iKe tnciu, ue audea u sort ot bankin
business to his occupation as a merchant.
Ho was also a manufacturer. A brother
of the Sir Thomas Lonibo who established
the celebrated silk-mill at Derby was a Quaker,
ana, jor a time, a icnow-prisoner oi tiuriicv s
Gurney afterwards bought of Sir Thomas borne
property that he Dossessed in Norwich, and
placed thereon a silk-mill, Imitated from that set
up at tier by. in theso way he soon grew rich,
oeing mucn aiaea in tus business oy his wife
Ulzabeth, a daughter of Sir Richards wanton, it
was said, indeed, that Elizabeth Gurney had the
preater uusiness abilities of the two, and that she
was the Teal founder of the commercial greatness
of tbe Norwich Gurneys. Be that as it may, the
Jnbuus8 prospered mightily, nd when Johji
THE DAILY EVENING TELEGHATO. PHILADELPHIA, KRIDAY
Gunny died, in 171, he I
and very t.rof.tal.lo connc
.'t a goodlv tortntie
;;ioi.s to nis sols,
John and Jonph.
These KOim were partner in bo'h tin; manu
facturing and mercantile concern, pro.een.ing
both with constdernbl" success. John Gurney.
the younger, who was born on :ho lot.iot July,
10811, and died on th: 23d of January, 1740, vas
a famous man in bis day. He was an intimate
iriend ol both the Walpolc, and by them uiacil
to entT I'arlinment; but he preferred to devote
himself t bis business, Bnd take r11 his relaxa
tion at home. In 1720 he was examined oeiore
the 1 louse of Lords concerning the intended
pr bibition of Indian ealicops. whien had lately
come to be lreciy Imported into England. He
drew a dismal picture of the evils cons"
qtirnt to the woollen trade from this in
novation. Worcester and Glouccter, Bris
tol aud York, ne said, were being
ruined throuch the preference that was
beingshown to cotton over woollen clothing.
In York, "the poverty ot the nianiilactiircrs was
bo great th.it they were obliged to eat unwhole
some diet, which had occasioned a aistetnoer
among them." In Norwich, he represented,
there was the greatest distress ot all. Thou
sands of work. people were tlnown out ot em
ployment; aud the paupers were so numerou",
tbat on many of the houses twenty-four shil
lings wire assessed tor every pound of rent for
poor-rates. These arruments, nml the argu
n.enTs ot other monopolists, prevailed. A law
wr.s pinde m 1721 '"to preserve and encourage
the woollen and silk mnnufacttnes," whereby
all cotton clothing was torb'.dien, with a Hue ot
5 tor each oilei.se upon th wearer, and 20 ou
the seller; and John Gurney was hcucetortli
known as "the famous advocate of the weavers."
Joseph Gurney, lour years younge than his
brother, survived him by ten years, inheriting
the entire manufacturing business, and
leaving most of the mercantile work to
be conducted by his nephews. In 1747
he was rich enough to buy the oil
Hall at Keswick, which, with subsequent addi
tions and improvement, was made a splendid
possesion lor his descendants. His two elder
sons, John and Samuel, succeeded him as manufacturer-.
They introduced into Norwich the
Irish olan of makinir homespun yarns, besides
employing great numbers of native Irish, and
were in their lime accounted great, benefactors
both to the eastern counties of England and to
the northern districts of England. Samuel
Gurney lett only a daughter, and Kiehard's
three sons soon retired from the manufacturing
business; Hiehard nud Joseph to settle down as
country gcntlciiicn; John, nfier some prosperous
woik as a woolstapler and spumer of worsted
yarn, to beoiue a partner with his cousin,
Baitlett Curacy, in the management of the
Norwich Bank. This bank had been founded
by John and Henry Gurney, sons of the John
Gurney who had defended the woollen mono
poly before the House of Lords iu 1720.
Succeeding their lather as merchants, they
followed the example of many other wealtay
traders, and added an irregular banking busi
ness to ttieir ordinary trade. Finding tins a
great sourc ; of fin t her wealth, the y at last de
voted themselves exclusively to banking, and to
that end converted the old douse in Saint Au
gustine's parish into the original Norwich Bank,
in 1770. From them the business descended in
1779, to Bartlett Gurney, Henry Gurney's son,
and by hiin it was translerred to its present
quarters, and enlarged by the admission of other
partners, the principal being the younger John
Gurney already named, and he, after Bartlett
Gurney's death, in lHOiJ, w as its chief proprietor
and manager.
Himself a good, and uselnl man, he was the
father of a famous lamily. One of his daughters
was Elizubeth Fry, another married Sir Tnomas
Fowcli Buxton, and a third was Piiscilla Gur
uey. His two most notable sous were Joseph
John Gurney, the philanthropist, and Samuel
Gurney, the'millionaire.
Sninuel, the one w hose history most concerns
us, was bom at Norwich on the 18th Ot Octo
ber, 1780.
He was John Gurney's second son and ninth
child. At the aye of seven iie w as put to school
with the celebiated Doctor Parr, and at four
teen he was apprenticed to the Cloih workers'
Company in London, and placed in the counting-house,
in Saint Mildred's court. Poultry, in
which his brother-in-law, Joseph Fry, as part
ner in the firm of Frys tV Chapman, carried
on an extensive trade as a ten. merchant, with
some irregular employment as a banker. "He
took to business and liked it." according to the
report ot the niece, whose tirst remembrances
of him were as an inmate in the Saint Mildred's
Court household. "In the counting-house, as
well as in domestic life, he was extremely
imiable and cheerful, and was bloved bv the
whole establishment. Although not brought
up in conformity to the costume or speech of
the Society of Friends, he showed no propensity
to follow fashions or gayety ot appearance.
beyond a suitable neatness of attire." From
the very first. Indeed, he seems to have been so
thoroughly a man, or rather a boy, ot business.
as to have caicd ior.no lighter occupations, in
tU7, w lien his sister itanriaii married Thomas
rowell Buxton, he went dowu to the wedding.
but. it is recorded, tired ot the festivities long
before they were over, and was glad to get back,
to his book-keeping and nioney'-changing.
In the loUowing year, however, faamuel Gur
ney was married uimselt, his w lie being Eliza
beth, tne (iawghter of James Slieppard, of Ham
House, in Essex, a handsome residence that soon
descended to the young couple, aud was their
plate ut abode during nearly the whole of their
iuarneu nte. I he wealth that came to Samuel
Gurney trom his fathei -in-law, as well as that
bequeathed to him by his lather, who died m
lhOti, helped him to made rapid progress in the
new business in which he had embarked u little
while before, on his reaching the a"c of twenty-
one.
The business had bccrtui a lew vears earlier
than that, crowing out of a yet earlier con mic
tion between Joseph Smiiu, a woollactorin Lon
don, and the Norwich.Bank. Joseph Smith had
found the advantage of e.pplyiu nart of his
savings as a merchant to the then verv sliehtlv
developed trade ot bill-discouiilincr. aud John
Guiney, of Norwich, with whom be had been
acquainted long betore, when both were simply
tieaiers in raw wool and manufactured cloths.
also lound the advantage ol sending up to him
some of the surplus monev of the Norwich
Bank, for investment iu the same way,
paying to Smith a quarter per cent, on the monev
laid out iu each transaction as his commis
sion. This arrangement haviuer continued tor
some time, it occurred to Smith's confidential
clerk, JohnOverend. bv whom most, ot' t lie nill
business had been done, that there was room in
jjoiHion ior a separate estaDlishment devoted to
trade in bills. He asked his master to open an
establishment of that sort, taking him as man
au'mg partner therein. This Joseph Smith re
fused to do, ami Overeud resigned hU clerkship
in consequent'", lleloun l the Norwich Gumeys,
however, more lavorable to his project, and
about the year lsuo the hou-e of Uichardsou,
overend k Company was founded, the chict
nianiiQcmeut being 'in his hands, and for a
few years iu thoc ot Thomas Hichardson, for
merly chief clerk in the bank of Smith, Wright
& Gray, nlterwards Esdaile & Co. Simon Mar
tin, an old clerk, aud atttrwards a partner iu
the Norwich Bank, went up to London to help
build up the business and to watch its move
ments on behalf of the Bank, whence most of
tbe money was obtained for investment. The
enterprise throve wonderfully lrom tne first,
one great source of its popularity being the
changes introduced by the new firm, which
charged the quarter per cent, commission
against the borrowers ol the money,
iiibtead of the lenders, as heretofore:; and iu 1807
John Gurney added vastly to its strength by
introducing his son Samuel as a partner. About
that time Thomas Hichardson retired from the
business, and it was carried on under the name
of Overend & Company, even after John
Overend's death, until the secret of its connec
tion with tho Norwich house couid no longer be
kept, and it assumed its world-famous title of
Overeud, Gurney V Company.
Its prosperity was in some measure the cause,
but in much greater measure the cousequence,
of the new views on banking and trade in
money that came into force in the early part
of tbe nineteenth century, Bankimr, which
had existed in some other couutries tor a long
time betore, came into fashion in England about
the middle ol the seventeenth century, soon to
, lead, to the foundation of the BanK of England,
nntl William Patcr-oii's eif,gestion, in loot. It
l tn n.ed lately proved very ueipml to Britiah
eomniPicein loriti the rate of iuere.'ttor
boitowcd money, sircuiheniuft i.ll sorts of
financial operations, r.nd iu other ways Giving
encouragement to all the branches of tra-ie and
inttitTV. The Bank ot Engbind, however, was
lrom the first, and is to this day, only a private
buns on a IniC scale, endOAeil wi'.u special
privileces on account ot it loans to the Gov
ernment, amounting, at its foundation, to
l,200,t:t)0. and now to upwards ot illl.Ou.l.OOO.
Its hrst chiiitcr ottered no obstacle to the esta
bl"hnient ot other like iiisir.ntions, and no law
could ever be passed preventing private indi
viduals from following the banker's trade: but
iu lid'J the Governors ot the Bank obtained an
act t'oibiddiim the tormation of anv banks of
issue ut der more than tix proprietors, and so
secured for themselves a prsetir.il monopoly In
joint-stock hanking. Their company was allowed
"to Issue paper money to the extcni of lis loins
to the State, put no pit er monev not covered by
Government securities whs allowed, and the
quantity issued could not be forced on people
against their will. During the eighteenth cen
tury a grpat number of other banks were lormed,
both in London and in the country. In 1750,
theie were In Fnglnnd hardly a doxen lankers
out of London; in 1793 theie were more than
tour hundred. Scotlaud also, untouched by the
law in lavor of t lie Bank of England, had three
iomt-storic banks, with branches in various
pints, besides a great number ot private esta
blishments. The.-:e banks, growing out ot the
commercial prosperityof thecoumry, helped tbe
tide ol speculation which, if it might, have been
fortunat" in times of pence, led to terrible lail
ures ou the revival of a European war, mid
the disaster consequent thereupon. In 174
there were in circulation six millions of bank
notes, that is, ot the paper vouchers iriven by
banners for the money deposited with them,
which in those days took the place for ordinary
trading puiposes of the modern cheques. In
17U2 the number had risen to nearly eleven mil
lions and a ball. Next year war whs declare !
between England and France, and in the panic
that ensued at least oue-tourth of the Enerlisn
country banks stopped payment, most of the
others being grievously shaken. The London
hanks also Miffcred considerably, the suil'ering
being everywhere attributed in great measure
to the rest rtctive policy of the directors of the
Bank of Enuiami, who, in spite ot the advice of
the Government aud the prayers of thousands
ot merchants aud manufacturers, sought to
strengthen their own position bv issuing as
little money as they possibly coul l tor the assist
ance of their neighbors. For this their best
excuse was in the met that their resources had
been, and continued to be yet more and more,
iiii.teriaiiy crippled by tile im. cense drains
ii.hm' ni. on tnein by Government on account
o! :L,e expenses of Its continental wars.
In ;iek.ber, 17!)."),' the directors, brought
an. u.st to bankruptcy, informed Pitt that tney
conui not, hold out much loneer. Other nic-
sacis followed, and at last, in February, 1717,
tbe bank was authorized by the Privy Council
to relused cash payment lor it- noies, or the
issue of any coin in sums larcer than twenty
Simmies, lu the lollowmg a: ay an act was
passed enforcing Unit resolution, and sanctioning
an almost unlimited issue of notes, blieridau
declared it "a mice to cell that a bank who-e
promise to pay on demand was paid by another
promise to pay at some undeiiiied period," and
Sir William Pulteney introduced a bid "for the
erection ot a new bauk iu cas? the Bank of Eng
land aid not pay in specie on or before tho2lta of
June, 17f8.'' Buithis opposition was in effectual,
ana the Bank. Restriction act remained iu loice
tor Iwo-and-twcnty years, without any serious
attempt at overturning the monopoly of tho
Bank of Knelnnd. k
Great advantage sprang from this Restriction
ncttnrouah its encouragement of sound una en
lnrhtened'views as to the value of paper mou' y
and the nature ot credit; but, while it lasted, it
also brought serious mischief by its deprecia
tion of the bank note in value, to "the extent, at
one time, of from twenty-live 10 thirty per cent.
Almost the greatest of the many great benefits
conferred on commerce by Mr Robert Peel was
his act ot 1810, abolishing the restrictions on
?old and silver currency and the lorccd issue of
paper money. The directors of the Bank of
Ensrliind were still allowed to issue as many
notes as they choe, but they were compelled
to exchange theni lor gold on demand, and thus
were vntually prohibited lrom giving out more
than the public felt it safe to'take at the full
price ot their equivalent iu bullion. This was a
national avowal of the principle that monev,
that is, the circulating medium, Is not pold and
silver alone, but gold, silver, paper, and any
thing elfe which can be regarded as a trust
worthy ngent in the interchange ot commodities,
and the bartering of capital, labor, and the like.
This was the principle which pave vitality to
such concerns as the one ot which Samuel Gur
ney was lor a long time the head, and which,
not a little through his help, has been a great
source of exiension to modem commerce.
"Credit," said Daniel Webster, "has done more a
thousand vuios to enrich nations than all tbe
mines of all the world." Were we forced now
to Cfirry on all our commercial dentines by
means of crold and silver, it would only be possi
ble, in tpite of the increase of our stores ot
these metals, to continue a very small portion
ol our present trade. This, however, no oue
now attempts to do. The legal currency,
w hciher gold, silver, or bank notes, is only a sort
of pocket money iu comparison with the
real currency of trade. It serves tor tbe
smaller sort ot retail purchases, for
payments across the counter and the
like; but the great merchant has not in his pos
fcession all through his lifetime actual money
equal in amount to the paper equivalent of
money that passes through his hands every
day ol the week. All his important business
is carried on exclusively by means of bills,
bonds, cheques, aud the other materials included
in the terms "commercial debt" and "credit."
His ready money is lodged with a banker, as
has been the practice since the beariuuiiig ot
the eighteenth century, except that now he
draws cheques ior so much as he needs tor use
lioni time to time, instead ot receiving from his
banker a number ot promissory notes, to be
passed to and tro, while the actual deposit was
in the banker's hands, to be used in whatever
safo and piotitable way be chose. Now, bow
ever, the cheques are iu comparatively lew
cases exchanged ior real money, they being
piled up by tho bunkers into w hoso hands Ihey
come, and paired oil", one with another, or iu
heaps together, while the deposits that they
rt present are left untouched. In this way the
money does double work, being itself available
ior use by the bunker or his agents, while the
equivalent checks are quite as serviceable tor
all the purposes of trade. And this is only the
simplest instance of the modern principle of
credit. Iu all sorts of ways, every bit of money
and everything else that can be tar.eu as a repre
sentative of wealth, whether actual or pros
pective, is turned over und over, each turuimr
being a cieatiou, to all intents and purposes, of
so much tresh money. A merchant, lor example,
buys a thousand pounds' worth ot goods for ex
port, say to India, China, or Australia. Ho pays
lor the Mime by means of a lull ot exchange,
accerted as soon as possible, but not payable
till two or three months alter dale. The manu-
lactmer or agent ot whom he buys the goods,
however, does not wait all that time lor his
money. In all probability ho immediately
gets the bill discounted, thereby lo-iug
some il.) or 20, but having the sum of
Jtt80 or 1985 available for appropriation in
other ways, und thus for the acquisition of
fresh profits. Before the original bill falls due
he has built perhaps twenty fresh transactions
on the basis of the that one, and so, in cll'eet,
has turned his 1000 into 20,000, less tho M)0
or 400 that have been deducted by the bill
broker as discount. Aud tho same original
transaction has been made the groundwork ot a
number of other transactions ou the pait of the
merchant who bought the goods. He bought
them tor 1000. to sell aiain for. mu ipinu
part of the dillerence being his proht, part OeiiiR
absorbed in freight, insurance, and so forth.
Ho is not likely to be paid for the goods in less
man six luouinH-iime, ana he bus to pay for
thein in two or three mouths. But long before
either of those terms expires he has raised part
oi mo iiiumiy uu me security ot his blil of
lading, ana so is enabled to enter on other
transactions, just an the manufacturer had
done. Or be sends out bis bilj to some
or depulv in the district ,0 wlljrh
consume,!, and that, beinir .....
cepteti. is available ior navm.nt ti
already conti acted m tht part or for luiaici' ,at3
iraumilision noiue, or i some third plac , ur
iic in any way that is lound desirable, lu - ich
ways as and they mo numberless a verv
unall amount of actual money kocb to the b Hid
ing up, on the one nidf, ot a va-t b ruct.utL of
cretin, and, on the other, el a vast struct uru of
commerce.
Ihcte was a hazy compreh'-asion of th's sys
tem lonir centuries auo. "It you were luuoant
of this, that credit is tho greatest capita of alt
towards the acquisition ot wealth, '' o'-id i)eui-
henes, "you would be utterly unoranu n it
the modern iheory of cr-dit is very modern in
deed, having almost its u r t exempiinc.uion, ou
a tin tie scale, in the establishment ot uveienu,
Guiney, fc Company. Thi.i house, as we siw,
was established to make a business ot bili-diu-
coiiiitnig, much mole complete and extensive
than the chance trade in bills that had formerly
been, and that continued to be. carried on by
bankeis, merchants, and all sorts of irteu'tilar
money-lenders, very soon niter the tune ot
S.imucl Gurney's supremacy in it.it began to
assume, gicantic proportions, and it was, for
some thirty or foriy years, tbe greatest discount
ing house iu ino world, the parent ot an tne later
and rival establishments that have started up in
London and ebewhere. At first only discount
unr tills, its founders soon saw the advantage of
lending money on all sorts of other securities,
ninl then cellars came to lie loaded with it enn
'Inntly varying heap of doci-wurrauts, bills of
hiding, shares in railways and public com
panies, and the like. To do this, of
course vast lunds were necessary, very
much in excess of the immense wealth
accumulated by the Gurneys in NorAh'h
nt.d elsewhere. Therefore, having proved the
value und stability of his business, bainuel (ur
ney easily persuaded tlio.-:e who ha l money to
invent to ulace it in his hands, they receiving
fur i ho same a fixed and lair return of interest,
and he obtaining with it as much extra profit
as the iKictuations cf the money market and tho
ini-rcfifing needs of trade made possible. He
became, iu fact, a new sort ot merchant, buying
credit that is, borrowing money on the one
hand, and selling credit that is, lending money
on the other, and deriving ironi the trade his
full share ot piohts.
(ireat help came to his tnoney-makincr and to
his commercial influence trom the panic of
1825. That panic arcse partly from the finan
cial disorganization consequent on the enforce
ment ol Sir Robert Peel's act ot Is 19, very good
in itself, but promotive of much trouble until it
hiiii brought matters into a healthy condition,
lis more immediate cause, however, was the
excessive speculation in joint stock companies
at home as well as in continental mines
American cotton, and other branches ol
toreiiru comincice. Several London bunks
failed, anil tit least eiehty country banks tell to
the ground, the Bank of England itself being
only saved by the accidental finding of two mil
lion one-pound notes that had been packed
away aud lost 'gbt ot some time before. Even
Joseph John Gurney, much more of a philan
thropist ihan a banker, suffered lrom the pres
sure. "Business lias been productive of trial to
me," he w rote iu characteristic way in his jour
nal, "and has led me to relied on the equity of
God, who measures out Ilis balutary ehasiisc-
ment, even in tins world, to the rich a3 well as
the poor. I can certainly testify, that some of
the greatest p:uus and most burdensome cares
winch 1 have bad to enaure have arisen out ot
being what is usually called a 'money d iniui."'
His brother, however, was much mixed up in
the tin moil. "Knowing intimately as he did the
sufferings which awaited those who could no
longer command credit or obtain supplies trom
other quarters," said oue of Samuel Gurney's old
mends, "his anxiety was felt more on others7
account tlir.n on his own," the fact being that
his own financial dealings were so sound that he
had no tear of liiiusi -If, and only had to settle
how to make most money with most secondary
ulvautagLS to those ne dealt with. "His desire,"
it is added, "yvasto act fairly and iustlv with his
fellow-creaturcp, as well as to himself; and
thus did he move ou wards cautiously, and
step by step, tlnougu those troublous
times, lest he should lead any into
error by his judgment. It was a remarkable
sight to yyitness hiin plunge day by day into the
vortex ot City business, and return thence to
ins own domestic hearth without any trace of a
ninniuion-loving spirit.'" We can well believe
that the honest Quaker was reasonably tree
from the ''mammon-loving spiri',," but he knew
well how to seek and secure his own advance
ment, and this he did very notably, by lending
to many houses money enough to enable them
to ride thiough their nilliculties, and so bringing
to himself much fresh favor and much new cus
tom during the following years. From this
time forth he came to be known as a banker's
banker, taking the place, for many, of the
Bank of England. Hundreds of private banks
tell into the w ay ot sending him, lrom time to
time, their surplus cash, 'finding that ihey
were as sure of getting it back whenever they
wanted it, as if they had lodged it in the
Batik ot England, and that in the mean
while they were getting higher interest tor it
than the Bank would have 'granted. "We do
not feel the slightest dependence upon the Bank
of England," said one ot the number, Mr.
Roberi Carr Glyn, betore the Bank Charter Com
mittee in 18X2, "nor do we ieel the slightest
obligation to it in any way."
Samuel Gurney was thus the cause of an
injury to the Bank of England tor w hich he was
not easily forgiven. And iu other ways tho old
Bonk piivllcges wereb'Mng assailed during these
years. In ls2G an act was passed sanctioning
the establishment of joint-stock banks through
out tbe country, except m Loudon, and within
a distance ot sixty-five mi.es thereof. "The
present system of law as to banks," said Lord
Llveroool, in supporting the measure, "must
now be altered in one way or another. Ifc is the
most absurd, the most inefficient legislation; it
has not one recommeudation to stand upou.
The piescnt system is one of the fullest liberty
as to vs luit is rotten and bad, but of the
most complete restriction as to all that is
good. By it a cobbler, or a cheesemonger,
may issue" his notes, without any proof of his
amply to meet tlitui, :.nd unrestricted by any
check whaieyer; while, on the other hand,
more than six persons, however respectable,
are not permitted to become partners iu a bank
wilh whose notes the whole business ot the
country might oe transacted. Altogether the
w I. ole system is so absurd, both in theory und
pi notice, that it would not appear to deserve
the slightest support if it was attentively con
sidered, even lor a single moment." it would
certainly have been altered long before, but tor
the influence of the Bank ot England directors,
caper to have as much ol a monopoly as possible
iu their own hands. This bill, permitting joiut
stock bunks at a distance, however, was passed
in H-2G, and a lew yeais later the wt.nderltil dis
covery was made that joint-slock banks were
leeal even iu London, aud had been so trom tho
beginning. James William Gdbint, having
be.LUn hie as a banker's clerk in li;t, and alter
twelve years so spent, having gained fresh ex
perience and iuliuence iu Ireland, pointed out
that the act of 17U0, while forbidding jomt
fctock banks ot isue, offered no obstacle to joint
stock bunks of deposit. The consequence was
the immediate tormation of the London and
Westminster Bank iu 183:1. Lelore that .bank
wa fairly established, however, Parliament had
complied with the demands ot tho tree traders
in money, and passed a bill intended to give
legal countenance to the institutious against
which it was lound that there was no legal pro
hibition. Therein it was "declared and enacted
that any body politic or corporate, or society,
or partnership, uliliough consisting of more than
six pilous, might curry or. the trade or busi
ness of banking in London or within 6ixty-tive
miles thereof." That w as a lull concession ot the
eratid point at issue. Other matters of dispute
nrose, and tcr the llrsn tour years of its history
the London and Westminster Bank was iu
constant altercation aud - litigation. But
at last common sense prevailed, and
the London and Westminster Bank not only
entered itself upon a career of wonderful pros
perity, but also became the parent of a numbyr
ot other joint-stock banks, destined in due time,
we may fairly believe, altogether to supersede
the older private banks.
It was really to atone for that apparent ln
' frirfrement of the Bunls'i monopoly, thoug
partner, atcn;
tne boi.cs ure
SEPTEMBER 28, 18G6.
OHttf,.. , - , Ml.
y i,...,.!i,i-?ir?t."'n . th ciw"--"Vt,,l .
p,ftt,u- ilnelnui ions in'iiV currency, of'
nature of thue which have, nl dillerent fmiVl
occasioned hazurd to (bo liauk aim embarrass
ment to the courti-v." that ih Bank Chanel
Act r,f 1844 was inseji. Sir Robert Peel rnteted
hctiiti'y into the work, thinking thai thus he
would complete thi tinuncial reform began by
his act ol 181'J, nun tn some of the 'veolthlcMt
bank directors he had very cloquont and per
suusive guides. Part ot the new charter was un
questionably beue'-iciiil. By it the Bank was
separated into two distinct ctabh.hmen'.s, one
only tor i-suing nn,K notes, in other tor
transacting ordinary business. The bankluu
cepartmtnt Is only a hinre joint-stock hank, and
deals with the public lust iu the s;iinC way as do
the Locdou und Weetinir.ster, or Couiti1 or
Child's banks. The issue department, unb-atlixed
bv Government, receives fill the bullion intended
to be held in reserve, und promulgates au exuot
equivalent for it in bank notes, isi 'tiug also
purer money, for which there Is no corre.-ponding
bullion, to the extent of iM.GoO.OOO on the
security of Government debts and oihur securi
ties produced by Government. Whether the
Bank Charter has on the whole been helpful to
tne progress of commerce need uot hero be dis
cussed. It has been, beyond all question, very
helpful to the Benk and to (he many wealthy
rr en whose wealth has brought them into con
net tion with it.
Among these, though as wealthy as any,
Samuel Gurney was not reckoned. Ills house
was too much in rivalry with one blanch ot
the Bank of Fncland's business tor him
to have more connection with it than wasueces
sary. He took no prominent part, therefore,
either iu favor or in disapproval of the recon
struction of the Bank Charter in 1814. But he
was us zealous us any ot the men in otlicc in
Tlnci'.diicedlo street iu his opposition to the
movement in tavor of joint-stock undertakings.
It may be that in thi he was somewhat in
fluenced by his anticipations of the rivalry that
would come through ihetn to the vost business
that he had formed. The only rivals that ap
pealed during his lifetime, however, were pri
vate speculatur-. Of these, the tir-t was Riclnud
Sanderson, oiigiuully a clerk of his own. Alter
letiin eg the mystery of "-'uccesstul money lend
ing iu the house ot Ovtrend, Gurney iV Com
pany, Sanderson started in husiness (or himself,
lie 'married a daughter of Lord Canterbury's
and became n member of Parliament, thus ad
vancing bis socialjposition, but perhaps damag
ing us ..e.nui.i i-.nl prospects. He failed in
1847; loon i"ie' ihe btis".ness in partnership
with a Mr t' .nun, and therein prospered tor
a low ear'. ' .1., i again iu 157. .More lini
tornily sucee"t"! wnsanothcr ami younger bill
broker, a Sir. Alexander, who had for some time
been a clerk in the bankiut house of Ro'oarts.
t urtis k Company, lu 1850, tho year of Samuel
Guiney's death, it was estimate! that Overend,
Gurney .V Company held deposi s amounting to
18,i;i,o,ouu, winie Alexander v company were in
possession of documents valued at 4,tOO,()00,
ind t-aiuiersoii y saudcinaii 01 iJ.oiiu.uuu worth
ot pupir; the wealth ot the three bou-es toge
ther being no less than 15,,')(i0,000.
During many years Dciore that, Samuel t.ur
ncy had had very little to do with the business,
us chiet management neing then in the hands ot
3Ir. David Barclay Chapman. While he was
young and vigorous, Gui ncy made money-getting
Ins one giand business. It is said ol him
that when once an cider friend warned hiin
against loo close attention to the things of thi!
world, he replied that he could not help him
self; he could not live without his business.
During tbe last ten or twelve years of hi3 life,
how ever, he loft nearly all the mauagcineiit in
the bands ot others, and lound his occupation
in enjoyment ot his princely lortune and appli
cation to vanous chiuituble and philauthropic
undertakings. Charitable he had been all
tnrough his life. ".Many are the solid remem
brances 01 the more prominent features of Mr.
(inrney's charities," savs his friendly biographer;
"but besides those deeds more generally known
to the public, there were ninny lesser streams
ol silent benevolence still flowing from tbe
louutain of love to God and man, which spread
refreshment around. We have nlrcaay alluded
to his kindly aid to many members of his
large family connection, but it might be said
that not only there, but elsewhere, be was won
derfully gifted, not only with the will, but
Willi the power to help. Besides his efficiency
in paction, his very pie&ence seemed to impart
strength, courage, and calm in any emergency,
whilst his practical wisdom, his clear and deci
sive mind and noble spirit ot charity, led many
to brii.g cases ot difficulty beiore him, knowing
from experience how sure, ell'ective was his aid.
It may be truly said of Samuel Gui ncy that he
loved to do srood service, whether by advice or
money by his sound Judgment or well-apportioned
aidl He really took trouble to servo his
lellow-crcatures, aud u narration of his mere
alnis-piving, extensive as it wu, would give a
very limited idea of the good he eil'ected during
the journey of life." Dunug many years of his
life Be 13 reported to have spent 10,000 a year
i clunitits, and iu one year it is said the amount
ex. c - e. -10,000.
.1 , . itne records of bis kindly disposition,
si,-; i;iT in "-ue ways and great.
v .0 aVternoou," says one of his clerks,
'an fill- Gurney was leaving Lombard street,
I saw him takiug up a large hamper ot
guiuo to carry to his carriage. I imme
diately came lorward and took it from him
He looked pleased, and in his powerlul and
hearty voice exclaimed, 'Dost th.iu know
H 'a in Leadenhall Market?' I replied in
tho affirmative. 'Then go there aud order thy
self a tight down good turkey, and put it down
to my account."
A more important instance of his generosity
is in the circumstance that when, on one occa
sion, a lorgery had been committed to the injury
of his Lombard street house, and the culprit lay
iu prison with clear in oof of guilt, Gurucy re
lused to prosecute liim and so obtained his
lelease. At another time, we are told, "one of
the hist silversmiths in the city, aud a man of
high esteem lor It is uprightness, was accused ol
lorgery. The excitement as to the probable
result of this inquiry was intense, aud the
opinions of men differed widely. On the
morning of the decisive day," says the
merchant who tells the story, "I chanced
to hear that my friend Gurney was prepared
to stand by the prisoner in the dock. I imme
diately proceeded to Lombard street, where I
lound I1.111 occupied with the vast interests ot
his btifciness, and asked hiin hastily whether
common report w eie true. Upon w hich he said,
'Alter a most anxious investigation ol the mat
ter, 1 am firmly convinced ot that man's inno
cence. I deem it my duty to express this con
viction publicly, and will join hiin in tho felon's
aock.' And most assuredly he went; nor could
any one easily forget the intense sensation pro
duced in the crowd of spectators when, on tho
prisoner being conducted to hiB place, the stately
lhture of Samuel Gurney prcrented itself to the
public pae ly the side 01 the innocent silver
smith." In mitigation of the laws regarding forgery,
in company witu ins orotuei-iu-iafv, rnomas
Powell Buxton, Samuel Gumey first showed
hiinsilf to ihe world as a philanthropist. He
also took a lively iuteiest iu all plans for im
proving and increasing re luces and reformato
ries. He was lor many years, alter the deatn of
Win. Alien, Treasurer to tbe British anil Foreign
School Society, and to other like institutions he
was always a good friend. Visiting Irehnd iu
184'.', he u'stonished the Inhabitants by the libe
rality with which he drained his purse to relievo
them, when he could, amid their suilerlngs from
tho potato lamine. At f.allma he lound the
towb so lull of paupers that there vere none
able to pay the poor rates, and the workhouse
was consequently bankrupt. "I found an exe
cution put into it," ho said in one of his letters,
"aud all the stock furniture is to bo sold oif this
week, when the poor people will have to lie on
straw, and the guardians must iced them as we.il
as they cun." lie bought up the whole of tho
furniture for 200, in order that, being his pro
perty, it might be saved from the creditors.
In 1848 Gurney gave 1000 to the Government
of Liberia, and he always took great iuterest in
the prosperity of the little colony of freed slaves.
Nor was he, like some nuti slavery worthies,
careful only lor the treedom of the blacks. In
1H5'4 he sent a petition to the Kiug of Prussia,
on behalf ot his dissenting subjects, praying
tbat lull religious liberty might be accorded
them. The King answered that be did not
.hat coull ilistn-ss
"his
vtf,-'tf rtienrt Gurue .. ' -,,
Gvtuev was not n l :;ot. bon.c
i It... in Illlt.ll.lllllfl.
ovv having
ot the way
winifii ni mui 111 1---- , - .
In which Fox nt.d p. nn n mi uecu sot kum j
lord Mneatilav, la his "iii-tory ot England,
hn answered thus: "It it a little tnottityint?
that Jlacaulay should s i have held up our
honorable predcecs-ors; not that tney were
perfect, or were ever held up as such, as tar ns
I know; but ttipy were extiaor luiary men,
wonderfully elucidating and maintaining the
truth. 1 mil not prepared, however, to fay that
Fox was clear ot eccentricities, and that at
tiii'CS he was no, to a c.Mtain cxten', under
6.UCI1 influence ou his conduct; but, uklug him' .
for nil in all, ho was wonderiully gifted
ard enlightened. It will probably be con
sidered by Fi lends whether there should
be an answer somewhat official to theso
attacks en 0l- two worthies. I rather lean to
it, although it would be Impossible 10 reach
wht revet Jlivc.mil.iv, book nniv go: vet. if well
done, it tniiiht nave a bcncfiiclal etl'ect upon the I
public mind, and upou oul. young people. There '
is, however, one consolation; 'The trath, as it
is in Jesus,' the truth as maintained by
Friends is unchangeably Bll(i remains the Batue,
however feeble, or evru tnulty, its supporters
may have been and are." That letter was writ
ten from Nice, whiiher SaiuuclGurncy had gone
very soon after the deal li ot hi wile, hoping to
imurove the health that bad been greatly shat
tered by bis loss and the anxiety that preceded 1
it. But In that he was mi.-tdken. Growihg
worse in tho spring of 18.'G. he hurried homo
waids, hoping to end his days in bis own coun
try, aud among his kindred. lie reached Paris,
but could go no further. There he dicit, on the
5th ot June, 18C6, seventy years of age, an 1 one
of the richest and most envied men in Europe.
We need not trace the history ot bis family
any lurthcr; but the history ot the bouse which
became famous all the world over, chiefly
through his enterprise and ability, may be fol
lowed right to Ihe end. Samuel Gurney hod
not mucn to do with the busiuess wf Overend.
Guruey & Co. lor some time urevious to his
death. On I119 withdrawal trom it. the chief
management was dunug uinny years with Mr.
David Barclay Chapman, w lio 'retired, in his
turn, Pt the end of 1867, having tirst led tbe
establishment safely through the panic of that
year. Ihen the business toll into h ss skilfuL
hand', und the disastrouo failure of last May
was ihe consequence.
The circumstances of that failure are well
wonh careful noting, helping us, us they do, to
an iiiidcrstantlingof the entire series 01 finan
cial troubles to which it led the way or served
as a stepping-stone. Th ditlicuitics began 1
last year, or even sooner, convincing proof
to those who cured to be convinced
of the weak condition of the business 1
being in its exchange from private bawls
into the let 111 of a limited liabilUv company.
Those dilnciilties had. iu part, resulted from tho
great error, per-istcutly avoided by old Samuel
Gurney, 01 combining commercial speculation,
with legitimate financial operations A matt
who simply lends money of his own can never
tail, so long as he makes proiits enough to pay
his working expenses. If he borrows money to
leud iipain at a profit, the principal part of all
bankers' business now-a-davs, he is still quito
sale, provided he takes care to deal oiny with
customers who can be relied upon, and who are,
I lodged to return the funds 1-ni to them within
reasonable time. But it he borrows money on.
the pretense of lending it for short terms and to
trusty bortowcrs, and then locks it up in
mining undertakings, railway companies, or
other commercial speculations, wheuea it
cannot possibly be drawn out at a short
notice if necessary, he has only himself to
thank when he gets into trouble. This seems,
to have been the grievous fault of Overend,
Gurney & Co., beiore it was reorganized, under
the Limited Liability act, In August. 1805. It
was continued at.er that change; ai.d tne great
discounting house lound itself worse oti' tliaa
ever in the spring.
lis ombairte-sincnts were shared by other
banking establishments; the high rates of ia
terest ollered by the trading or "mining couipa
nics lor all money lent to them being teiupta
lions too great for resistance. Nearly all tho
banks that tailed during the summer of 1806
owed their failure, in pair, to this source of
weakness. The Birmingham and the Preston
Banks, last in the order ot failure, had been,
crippled for years through their having made. .
large advances to speculators iu the Iron and
cotton trades. The Agra aud Masterman's Bank,
with a much larger held of operations, had erred
in the Fame way, risking its safety through con
nection with the great cotton houses ot Bombay
and other parts of India. The house of Overend,
Gurney & Co., as we saw, was chielly involved
witn railway ana iron contractors.
This seems to have been an immediate catiso
ot the disasters. Ou the uth of May, three suit
brought against the Mid-Wales Railway Com
pany by Overend, Guiney & Company and two
other discounting houses were decided in the
tfourt ot Common Picas. The suits wete for
bills of exchange amounting to 00,000. drawn
by the three houses named and accepted by the
Railway Company, bur dishonored by it ou their
tailing due. The Court decided that the Kail
way Company had no power to accept such oills.
and that Ihey, and all others like them, wero
nieic waste paper. By these transactions tncm
selves Overenu, Gurney & Company did not
lose much; but they were known to hold
immense quantities of the same sort of paper;
and, if nil this was good for nothing, the eita
blishment was in a very dangerous position.
That, at any rate, was the general opinion
among city nieu on tbe morning ot the 10th of
May. The result was a rush on the Lombard
street house, which ended in the closing ot its
doors beiore theduy was out, and next morning all
England was startled by the news that it had
tailed, with liabilities exceeding 10,000,000.
That news led immediately to the breaking of
tbe Bank ot London for about 4,000,000, the
Consolidated Bank for nearly as much, and
several other establishments for lesser sums;
the crowning though not the final event of the
panic boina the failure ot the Agra ana Master
man's Bank tor upwards of 15,000,000. To
say that the total losses occasioned by the panic
amounted to 00,000,000 would be certuinly
within the mark.
But they were not all losses; and tho finan
cial blunders to which wc have referred wero
not the only causes of tho catastrophe. Two
very different sorts of people have made profit
out of the tioubles of their neighbors. Of the
one toil are the great capitalists who have had
money to lend a: the exorbitant rate of ten per
cent., or at a higher interest still; the
body of rich men whose most suc
cesslul possession is the Baak of England,,
endowed wiih very considerable privileges
aud opportunities of money-making in return,
tor its services to the State. The other and
much less respectable clas continues a body of
men knowu vaguely as stock-jobbers, whoso
wits are their principal capital, and who have
lately lound congenial employment for those
w its in what are called "bearing operations."
In Stock Exchange jargon, "bulls" nie The job
bers who speculate for u rise in the prioi of
shares, that is, who buy when shares are. low,
with the intention of selling them agaiu when
they have risen in price: "bears" are tho'P who
make their profits out ot a lull lu the vubio of
shares. The inferior and less honest stock
jobbers were "bulls" last year aud ever since
the mania for limited liability companies that
began in 1858, mak.iig it their business to bolster
up the companies whose shares they resllv or
nominally held, till they could bo disposed of at
n satisfactory profit during the lust eight or
ten months they have been "bears," setting;
themselves to bear down or depreciate ail sorts
ot establishments, in orde;1 that they may make
money out of the fall.
This Ihey do by straining to the utmost the
Stock Exchange iulc which provides that stocks
ond shares, though thev may be bought or sold
any day, shall only be delivered or transferred
at stated periods generally once a fortnight tor
ordinary commercial shares, and once a month
lor Consols and the llkp. "To tho nn,,..-; ,..i 11
as the author of a clever lit'le book o:i "Tho V
Fronts ol Panics" ha said, "it may be mue -cs- I
scry to txnlaiu that this felling of suai-1, on iha
Mock Exchange does not leqr.iro thut the sel r
should have In his possession what h sells. Tim
sale is always mad lor delivery at a t'n 1 1 s r-.- day
and even at that time it is very rave for the
shares themselves to be delivered, bit', merely
ir.mn m .my third
.1
t ;