Hadar Hoter-ishay

2023 Detroit, MI, United States

Abstract: The proposed paper will explore how prominent British merchant bankers have used the young Mexican Republic’s sovereign debt crisis to favor their mercantile affairs throughout the mid-nineteenth century. Due to political instabilities, Mexico suffered from a decades-long “era of chaos,” including rapidly changing governments and long-lasting insolvency. As a result, Mexico’s British creditors, known by the name agiotistas, the moneylenders, had to reinvent their affairs in Mexico. Thus, they turned Mexico’s foreign debt from a financial means to accumulate profits from dividend payments into a negotiation tool and pressure leverage to increase imports into the country and lower trade costs. In the mid-nineteenth century, British merchant bankers were specialized governmental financiers and importers of various goods. When Mexico deteriorated into a sovereign debt crisis, the difficulties of one business field supported the other. Thus, instead of collecting interest and loan repayments, the creditors used their access to Mexican policymakers to band over the protectionist policies aimed at nourishing the local industry. The creditors thus pressured governments to significantly lower tariffs, gain personal tax rebates, and lift specified import bans, thus penetrating the Mexican market through negotiations. Based on archival materials, including the creditors’ house correspondences and private communications, the paper will explore merchant bankers’ flexibility while doing business in Mexico. The paper will thus shed new light on the role sovereign debt has played in the nineteenth-century Mexican economy, not only as a burden upon the public budget but as a tool to tackle protectionist policies in the hands of private entrepreneurs. Moreover, it will present the dynamic nature and strategies of British merchant bankers through their conduct as importers and creditors of the rapidly changing Mexican governments, thus portraying the entrepreneurs as active agents of globalization.

2025 Atlanta, Georgia

Abstract: The paper examines Baring Brothers & Co.'s involvement in Mexico during the turbulent period from 1825 to 1861, often referred to as the “Mexican era of chaos” in literature. The Barings, one of the world's most prestigious merchant banking firms, served as Mexico’s financial agent in the London Stock Exchange despite the country’s default in 1827. Not only did they keep the official representation of Mexico after the default, but they continued to do so for the next decade while violating the professional logic of maintaining their good name as first-class financial intermediaries. Based on materials from the Baring Archive, Britain's National Archives, and the Mexican State Archive, the paper investigates the Barings’ motivations for continuing their financial involvement with Mexico despite its status as a denied borrower in London. It argues that the Barings were willing to experience reputational damage in Britain for the sake of commercial benefits in Mexico. These were realized through utilizing Mexican sovereign debt and dependency on domestic loans to gain significant discounts on import duties amidst severe protectionist policies via frequent use of the guías contracts with the government. By exposing the Barings’ strategies and interests, the paper shows the reciprocal connections between sovereign lending and trade in 19th-century Mexico, a duality embodied in the practice of merchant banking. Hence, it showcases the relevance of financial intermediaries to the stimulation of trade amidst the early decades of the first wave of globalization. Moreover, the paper highlights the relevance of Mexican domestic debt to the sustenance of commercial activity throughout the century despite political turmoil and protectionist policies. Finally, the paper analyzes the implications of the guìas domestic loans for Mexico's accumulation of customs duties revenues, damaging its ability to initiate industrialization in the local textile manufacturing industry.

2026 London

Abstract: The paper examines the dual role of high finance and commerce in the activities of Hope & Co. of Amsterdam and Baring Brothers & Co. of London, the main European financial agents of the Russian Empire from the late 18th century. While commerce and sovereign finance are often studied separately, merchant bankers’ involvement in both areas calls for a more integrated perspective. Through the case of Hope and Baring in Russia, the paper highlights the reciprocity and mutual support between trade and finance. It argues that Hope and Baring’s sustained engagement in Russian sovereign lending depended on their ability to combine financial intermediation with commercial enterprise, enabling them to manage the risks of underwriting large foreign loans amid political instability, currency devaluation, and wartime disruptions. These were non-specialized merchant bankers in the literal sense, using commodity exchanges to support and expand sovereign loan operations. Drawing on correspondence, negotiation memoranda, ledgers, and loan records, the paper shows the commercial applications of Russian bonds, serving as liquid, transferable assets employed as collateral and as a means of settlement in trade. The firms’ financial and commercial activities were structurally interdependent: profits from trade financed bond operations, while bond collateral sustained new commercial ventures. This interplay is shown in initiatives such as the large-scale importation of silver into Russia to secure metallic payments on debts, revealing how merchant bankers converted financial obligations into tangible flows of goods and specie. Finally, the paper examines the mechanisms of intermediation between Hope and Baring and the Russian government, from designated agents like Robert Voûte and Hieronymus Sillem to local firms such as Bergien & Co. and Stieglitz & Co. Their activities show how merchant banking united diplomacy, finance, and commerce into a single transnational system that blurred the boundaries between the state apparatus and private enterprise.