ABSTRACT
Through an analysis of the business correspondence between Alexander Baring and his father Sir Francis, this chapter investigates how market operators evaluated the risks of investing in new markets such as the U.S. securities market during the early republican era. How did foreign investors judge the new securities market? What were the main risks inherent to this new market? What were the main techniques used to evaluate this new market? The rich correspondence between these two members of one of the most powerful and well-connected business firms provides an insightful view of the merchant world operating in the Atlantic space at the time of the French Revolution. Alexander Baring informed his father and partners of the outlook of the economy of the new republic as well as the republic’s main traits. These elaborate descriptions of the young U.S. society and of its great potential convinced the partners to run the risk of investing in the newly founded securities market. In showing the importance of what he called “double-sided embeddedness” in Baring’s decision to invest in this new market, Valmori highlights the importance of trust in overcoming perceptions of risk as well as the multifarious facets of merchant knowledge.
