the world of private banking
the world of private banking
the world of private banking
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CHAPTER 4<br />
London’s First ‘Big Bang’? Institutional<br />
Change in <strong>the</strong> City, 1855–83<br />
Philip L. Cottrell<br />
There is a peculiar fascination to some people in making money on <strong>the</strong> Stock<br />
Exchange. I know hundreds who would ra<strong>the</strong>r make £50 on <strong>the</strong> Stock Exchange<br />
than £250 by <strong>the</strong> exercise <strong>of</strong> <strong>the</strong>ir pr<strong>of</strong>ession; here is a nameless fascination, and<br />
in <strong>the</strong> year 1871 <strong>the</strong> favourite form <strong>of</strong> making money on <strong>the</strong> Stock Exchange was<br />
by applying for shares, selling <strong>the</strong>m at whatever premium <strong>the</strong>y were at, and that<br />
money was considered made, and was considered – I say considered – honourably<br />
made. I reveal no secrets because I am incapable, but you would be amazed to see<br />
as applicants <strong>the</strong> names, <strong>the</strong> excellent names <strong>of</strong> most honourable men, and women<br />
too, for <strong>the</strong> ladies were not backward in <strong>the</strong> year 1871, her grace did not object<br />
to write to ask me whe<strong>the</strong>r she could have 50 shares in this or that company, my<br />
lady dropped me a polite line, sometimes with a card for a conversazione, to ask<br />
if she could get 20 shares in such and such a company. Public writers – clergymen<br />
– I hope <strong>the</strong> bar will forgive me for saying so – barristers also were not deficient<br />
in applications to me, and not merely to me but to any body connected with<br />
public companies, for allotments when shares were at a premium.<br />
A. Grant, Twycross v. Grant and O<strong>the</strong>rs: Speech <strong>of</strong> Albert Grant<br />
(London, 1876), p. 126.<br />
With its contemporary ring, applying <strong>the</strong> description ‘Big Bang’ to mid-nineteenth<br />
century organizational changes in <strong>the</strong> English financial sector, above all to <strong>the</strong><br />
London markets, might rightly be queried. Fur<strong>the</strong>rmore, <strong>the</strong> depiction itself might<br />
be ambiguous. ‘Bangers’ for many past generations <strong>of</strong> English schoolboys meant<br />
<strong>the</strong> almost lethal, small fireworks, such as ‘Imps’, available for Guy Fawkes<br />
Night celebrations. Their detonations could be ear-splitting while consuming<br />
precious pocket money in a matter <strong>of</strong> seconds, with nothing to show afterwards.<br />
Some particular London institutions, 25 years after ‘Big Bang’, might draw up<br />
somewhat comparable balance sheets for <strong>the</strong>ir participations in that financial<br />
explosion. Since <strong>the</strong> phrase was coined during <strong>the</strong> early 1980s, o<strong>the</strong>rs could argue<br />
that <strong>the</strong> analogy was being drawn with developments in <strong>the</strong> science <strong>of</strong> cosmology<br />
– a <strong>the</strong>ory about <strong>the</strong> origins <strong>of</strong> <strong>the</strong> universe. ‘Big Bang’ has been put forward as<br />
<strong>the</strong> seminal explosion that initiated <strong>the</strong> expanding universe, yet it has also been<br />
hypo<strong>the</strong>sized that expansion will ultimately be exhausted, causing inward collapse.<br />
Putting aside <strong>the</strong> danger <strong>of</strong> mixing metaphors, possibly more appropriate is not a<br />
‘Bang’ but a ‘Bonfire’ which consumed restrictive practices in <strong>the</strong> 1980s. This