Messrs. Hoare Bankers: A History of the Hoare Banking Dynasty
Constable and Robinson
C. Hoare & Co, which trades from an Italianate building in London’s Fleet Street, is the oldest private bank in the world. Founded by Richard Hoare in 1672 as a goldsmith, deposit-taker, and pawnbroker, Hoare’s shed its craft origins, made money in the South Sea Bubble in 1719-20, and took to lending to spendthrift aristocrats on the security of land and then, with the rise of the public debt, to government.
Though never large, or for long periods, all that profitable, it has survived at the same address to the 11th generation of the Hoare family.
Why does one family firm survive and another fail? A former curator of the museum at No. 37, Fleet Street, Victoria Hutchings shows how the Hoares fell prey to the usual ills that beset British family companies such as idle descendants, black sheep, women, horses, fieldsports, mayoral chains, church politics, gardening, Chancery suits, composing Italian-English dictionaries in banking hours, new Zealand sheep stations, ocean-going yachts, penal taxation, rebellion (1745), and enemy action (1941).
The Hoares poured their money into country estates, including what some consider the very finest of all landscape gardens in the English state, Stourhead in Wiltshire.
Henry Hoare ‘the Magnificent’, who laid out the gardens at Stourhead in the years after 1743, believed that the ‘fruits of industry and application to business’ were ‘temples, grottoes, bridges, rocks, exotick pines (greenhouse pineapples), and ice in summer.’
Yet, for Hutchins, those very grottoes and pineapples were also the bank’s capital and advertised, in the days before credit ratings and public accounts, that the bank’s partners were men of substance.
In modern times, Eisuki Ono, banker father of Yoko, commented after lunching at British banker’s country house: ‘Have seen Scroder orchids. No need to see balance sheet.’
In their business life, the Hoares somehow avoided the overambition, bad liability management, balance sheet envy, and rogue trading that, in the end, cost the independent of every private bank that ever was in England and Scotland.
Hoare’s never made great profits, except perhaps in the mid years of the 18th century, when Henry the Magnificent was pouring the modern equivalent of millions into Stourhead and other properties every year.
The partners were sticklers for security and ran high cash balances relative to their deposits and rarely lent to trade or industry.
They could be blunt with their toffee-nosed clients. Henry the Magnificent once wrote to Lord Weymouth, who had borrowed £64,000, in language almost without parallel for the age: ‘Indeed my Lord there is no such thing as carrying on business at this rate; punctuality is the soul of it and it must be insisted on.’
The family valued the bank, would not tolerate unsuitable partners, did much of their business with – and married – one another.
The partners lived well and so did their staff.
In 1828, No. 37 was rebuilt when the partner delegated to sleep in the building had to do without his wife and found ‘the comforts of the married state considerably abridged’.
The banks survived a rocky period under the hapless Henry junior in the late 19th century, considered throwing in the towel in the Depresision of the 1930s, and was saved by the clerks and maids from burning during the German air raid of May 10, 1941. In 1946, the Stourhead garden was passed in good financial and horticultural order to the National Trust.
The bank is still quite small with 230 employees and a balance sheet – I guess, since Hutchings doesn’t say – of perhaps £1,000 million. It has 10,000 customer accounts, one of which was opened in 1675.
Hoare’s remains, as the economist JM Keynes put it in 1938, ‘uncomplicated by branches, unseduced by amalgamation, undisturbed by any process of change, unshaken by financial crises of two and a half centuries, being put to no hazard by excessive ambitions or too much guessing’.
In fact, Hoare’s does now have a branch in Lowndes Street, Knightsbridge, for the carriage trade, but in the electronic age, bank branches are often a waste of money. Hoare’s by standing still, can wait for banking fashions to come round. Even the prevailing American model, in which private clients are stuffed with financial products arising in other parts of a diversified operation, will itself fall out of fashion.
Hutchings’ photograph of the present partnership shows five men and two women who still fit the type of private banker as it was understood in the 19th century: ‘of serious manners, plan apparel, the steadiest of conduct, and a rigid observer of formalities.’ They look as if they would like to have your business but not need to have it.