ABSTRACT
One of the enduring fascinations of British economic history in the years between 1870 and 1914 is the pre-eminence of London as a centre of international finance. In recent years, several scholars have produced books and articles which point to the complexity and variety of functions undertaken by City enterprises, and the rich diversity of institutional arrangements which existed throughout the Square Mile. Of particular interest is the work of Stanley Chapman and Ranald Michie. Chapman's work on investment groups identifies 29 networks of merchants, financiers and entrepreneurs through which capital was channelled into productive uses overseas. These investment groups were entrepreneurial or family concerns ‘whose name and reputation was used to float a variety of subsidiary trading, mining or financial enterprises, invariably overseas and often widely dispersed’. He cites as an example, the Matheson group, which, through Matheson & Co. in London and Jardine-Matheson & Co. in Hong Kong, promoted large scale ventures in mining, financial services, textiles, shipping and railways, as far distant as Spain, China, the United States, South Africa and Russia. Not all of Chapman's investment groups were entirely British, but they ‘all had a base (office) in Britain and conducted a large part of their trade or financial operations (or both) through London’. The City, according to Chapman, was not merely a mechanism for the transfer of funds from a multitude of savers to governments and firms at home and abroad; it was also a place where entrepreneur-ship flourished, and opportunity seeking was the natural concern of merchant banks, company promoters, speculators, exploration companies, investment trusts, merchant houses, and investment groups. 1 To this list might be added the solicitors, accountants, consulting engineers, stock brokers, and commodity brokers who frequently engaged in company promotion. Michie takes up this theme in his work on venture capital and the London Stock Exchange, emphatically rejecting the idea, lately revived by Kennedy, that City conservatism and prejudice lay at the heart of British economic difficulties in the late nineteenth century. 2
