Abstract

"The Fox and the Hedgehog: Abraham Goldsmid and competition for contracting British government loans during the Napoleonic Wars"

Jiwon Han, The Graduate Center, City University of New York (jhan1@gradcenter.cuny.edu)

During the Napoleonic wars, the British government issued an immense amount of loans to finance its war expenditures. One of the most prominent brokers for the loans was Abraham Goldsmid, a Jewish immigrant from the Netherlands. Goldsmid's financial acumen earned him a great reputation and a substantial fortune and he held an influential position in the financial world along with Francis Baring. However, his business and position were never stable. Loan contracting business was subject to the wartime volatility of the market and challenges from competitors. There were mixed reactions to Goldsmid’s prominence; while some lauded his contribution to the public interest by offering advantageous terms, some criticized his dominance in the business as monopoly and some attacked him out of anti-Semitism. When Goldsmid died in 1810, an anonymous author published a pamphlet with the penname “Erinaceus (hedgehog).” Reminding the readers of Aesop’s tale “the Fox and the Hedgehog,” the author argued that the death of Goldsmid would not be beneficial for the public, as a monopoly comprised of many actors will replace a monopoly of a few and be less likely to breakdown. Indeed, a more diffuse set of brokers on the Stock Exchange came to hold the center of Britain’s money market. In this presentation, I aim to show the instability in the British money markets and their developments during the Napoleonic Wars and reevaluate Goldsmid as one of the contributors to the developments of the markets, along with the Stock Exchange. I will also argue that the fall of Goldsmid marked a turning point in the nature of the British financial market; wartime exigencies and the government’s financial needs enabled a few great loan brokers to excel, but when they were gone and the war ended, the money market became more institutionalized and broadened to embrace more diffused set of clients, brokers and investors.