In search of virtuous bankers

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Professor Anne Murphy, University of Portsmouth

Many people today would regard the search for virtue in banking to be in vain. The common assumption is that bankers are greedy for profits and far too willing to take risks that, when they go wrong, lead to expensive bail outs using tax-payers’ money while the perpetrators walk away with their bonuses intact.

The eighteenth-century view of financiers was often no better. Financial markets were viewed with suspicion and many believed that bankers operated against the country’s interests by supporting the numerous international wars of the eighteenth century from which they profited.

As my new book, Virtuous Bankers, shows, the Bank of England was not immune from such accusations. Founded in 1694, the Bank of England was still a young institution in the 1700s. At this time, it was a private company answerable to its shareholders. It was still far from fully accepting the kind of responsibilities for support of the economy and banking system that characterise its work now. Although it served government interests, many of its critics thought it was seeking to extract too high a price for that service.

And, just like any working environment today, the eighteenth-century Bank employed its share of incompetent clerks. 

There were men like the supervisor, Mr Vickery, whose management style was harsh and who, consequently, was thoroughly disliked by his co-workers. Some men drank on the job, some were rude to the customers. Mr Bridges was a ‘chattering fellow’ and so unfit for public-facing positions. 

Francis Fonton funded a mistress and his thoroughly dissolute lifestyle by embezzling funds. It was his job as a stock transfer clerk that gave him the skills and access needed for this duplicity. The fact that there were relatively few men who chose this path was probably due less to the Bank’s systems of management and more to the punishment inflicted on those who were caught – the unfortunate Mr Fonton went to the gallows. 

Yet, despite a sprinkling of clerks who were incompetent, immoral or downright criminal, the men who worked for the Bank during the eighteenth-century were proud of their roles. Being a Bank of England clerk was a sought-after position and one in which men stayed for many years working long into their old age. 

They were also proud of their contribution, often referencing their duty to the public and the importance of their service. There is very clear evidence also that the public recognised and appreciated that service and regarded the Bank of England as the guardian of public credit - they knew their funds were safe within the Bank’s walls and that the institution would act in their interests.  

The institution’s directors carefully curated an image of virtue. They had no hesitation in speaking of the Bank as a place of ‘immense importance…not only to the City of London, in points highly essential to the promotion & extension of its Commerce, but to the Nation at large’. And they were right in these assumptions. The Bank at this time managed two-thirds of the public debt, supported the work of the Exchequer and was the primary discounter of bills of exchange, thus keeping the wheels of the economy well-greased, when it saw fit, of course.  

Taking into account all the Bank did – its lapses, failures and risks, along with its capacity for innovation and ability to manage vast amounts of wealth – a report in 1783 came to a clear conclusion: the Bank should ‘necessarily excite care and solicitude in every breast’. There was no question in the minds of its directors that their institution was virtuous and that the British public should show ‘a religious Veneration for [its] glorious fabric [and give] ‘steady and unremitting attention to its sacred Preservation’.