Abstract: Scottish-American Business Networks: The Development of the Dundee Investment Trust Industry, c.1873-1914

Claire E. Swan

Abstract

Scottish entrepreneurs were important financial intermediaries in the export of British capital to the United States throughout the nineteenth century. From 1837 a host of joint-stock companies were formed to promote the investment of capital into the development of the American West. It has been estimated that Dundee, with an average annual income of £1.5 million in the 1880s, had invested £5 million in the United States by 1890. This was said to be about ten times the value of the town's real estate and equaled the savings of the town for twenty years. Although the finances of Dundee were more limited than those of Edinburgh or Glasgow, the city excelled in transatlantic enterprise and from 1873-1914 it was home to twelve American investment trust companies earning an international reputation as the center for Scottish foreign investment. This paper will address the widely accepted criticism that Dundee disproportionately contributed its textile profits to foreign investment rather than to improve the town and its jute industry. Instead, local merchants and manufacturers chose to diversify their activities in America by financing ventures such as the American railroads, cattle ranching, mining, and mortgage lending.