The goldsmiths of 17th century London are among those who can be said to have invented modern banking. Though goldsmiths by trade, they played the part of bankers too, taking in deposits and loaning them out at interest to the public. Nonetheless, banks remained rare in Britain before 1750. That was soon to change however, because the Industrial Revolution about to begin in Britain was a boon to finance. Rather curiously, one religious minority, the Quakers, was responsible for an outsized portion of this growth. For over two centuries, many of the most successful British banks had Quaker origins. Barclays and Lloyds, two of the largest banks in Britain today, are among those whose founders belonged to this financially savvy religious sect.
Quakers
In the late 18th century, banking was a booming business in Britain. The Industrial Revolution underway magnified the need for credit. Thus, whereas in pre-industrial times there were perhaps just a dozen banks in Britain outside London, by 1800, there were well over three hundred. Roughly up to a quarter of these banks were founded by Quakers; a very large number considering this religious minority’s rather miniscule proportion of the population. As religious nonconformists in Anglican Britain, the Quakers were banned from many professions, and from holding public offices, until the early 19th century; this sent the ambitious among them into careers in business.
Some of their theological teachings and religious practices may have made the Quakers particularly good bankers. For one, Quakers worship in silence. Their religious services feature no liturgy or sermons and Quakers were often said to mimic these features of their religious congregations in their personalities; perhaps helping them be entrusted with secrets, a natural consequence of being bankers. Quakers were also warned of the deceitfulness of riches by their ministers and accordingly would distance themselves from dodgy business dealings, earning them a reputation for trust and prudence.
Barclays and Backhouses
Perhaps the largest and most well-known bank with Quaker roots is Barclays. The firm was founded in London in 1690 by Thomas Gould and John Freame, a Quaker goldsmith. Freame married Gould’s sister and two of their daughters, Priscilla and Sarah, married into a Scottish Quaker family, the Barclays. Priscilla Freame married David Barclay, a linen manufacturer and her younger sister Sarah married Barclay’s son from a past marriage, James. The business was known as Freame & Gould until James Barclay, John Freame’s son-in-law, joined the firm in 1736. The bank picked up two more Barclays when John and David Barclay, sons of David Barclay the elder and Priscilla, also joined the firm.
Many of these Quaker financiers had interesting lives beyond their business careers. Take the younger David Barclay for example, he counted the American Founding Father Benjamin Franklin among his friends. Barclay even tried to intercede on behalf of the Americans in his lobbying of the British Prime Minister just before the American Revolution. David and his brother John were also abolitionists who freed slaves they acquired in borrower defaults. He traveled personally to Jamaica and saw to it that 32 slaves acquired there were freed and settled on the North American mainland.
Alongside the Barclays, another Quaker banking family in Britain were the Backhouses. Backhouse’s Bank, or officially James & Jonathan Backhouse and Co., was founded in Darlington in the north of England in 1774 by a Quaker linen manufacturer, James Backhouse, and his sons Jonathan and James. Like other banks of this period, the firm was an offshoot of their manufacturing interests, originally created so they could advance credit to their customers. However, the bank grew very quickly; it was opening branches across the northeast of England within two decades of founding.
The Backhouses have their own curious tales to tell. One of the most notable involves a dispute with Lord Darlington, a local earl. In 1819, the Backhouses were set to finance the Stockton and Darlington Railway, the first to use steam locomotives. However, the railway would have passed through one of the Earl’s hunting estates and he was furious. To exact his revenge, the Earl stockpiled as many of the firm’s banknotes as possible to present them for redemption into gold all at once. The hope was that the bank would be unable to redeem the notes and be ruined. Jonathan Backhouse learned of the scheme however and went to London to obtain enough gold. Laden with gold, his cart lost a wheel on the way back, but the banker was able to balance the gold on the return trip so that the cart could continue on three wheels; the bank was saved. At the end of the 19th century, the firm merged with Barclays, combining the two banks’ eventful histories.
The Gurneys
Still another of the 19th century’s most successful British banks, Gurney’s Bank, had Quaker origins. Gurney’s Bank was founded in Norwich in 1770 by two brothers, John and Henry Gurney. Like the Freames, Barclays, and Backhouses, the Gurneys were already successful businessmen before going into banking, having been brewers and wool merchants. Their bank played a significant role in the Panic of 1825, one of the first banking crises in British history. In an era before the Bank of England acted as a lender of last resort, the Gurneys rescued many other failing banks; they thus became known as “the bankers’ bankers”.
Perhaps even more so than the Barclays and Backhouses, the Gurneys were quite an illustrious family. Take just one of the family’s members, Samuel Gurney, as an example. Born in 1786, Samuel Gurney was the man behind the bank’s actions during the Panic of 1825 and was also a notable philanthropist. His siblings included the prison reformer Elizabeth Fry, who for years was depicted on Britain’s £5 banknote, and the notable Quaker minister Joseph John Gurney, among others. Samuel Gurney’s own son became a Member of Parliament.
Quakers were often discouraged from marrying outside the sect and as such it shouldn’t be too surprising that the family trees of these banking households would overlap eventually. For example, Samuel Gurney’s grandmother was a member of the Barclay family, a daughter of David Barclay the elder and Priscilla Freame. By the middle of the 19th century, Samuel Gurney was perhaps Britain’s preeminent banker and had the pedigree to match; but soon after his death, part of that legacy would fall apart. Ten years after his death in 1856, one of the firms he had controlled, Overend, Gurney & Company, had failed.
Though the original Gurney’s Bank survived this failure, like Backhouse’s Bank, it merged with Barclays at the end of the 19th century. The 1896 bank merger was described by The Economist at the time as “the largest of its kind that has yet taken place”. The combined bank was capitalized with £1 million each from the Barclays and the Gurneys. However, Barclays was the larger bank by deposits and the combined bank took the larger firm’s name.
Nonetheless, the Gurneys were known for their generosity and, like the Barclays, for their activism in areas like the abolition of slavery. Before moving on though, there is still one more member of these illustrious families to mention, Priscilla Wakefield. She was Samuel Gurney’s aunt and David Barclay’s granddaughter and was a prolific writer, publishing works covering everything from botany to feminism, children’s literature to economics. Priscilla Wakefield founded a school for girls and was even something of a banker in her own right, establishing a so-called “frugality bank” for the poor.
Lloyds Bank
Despite the rich histories of the firms already covered, to end here would be to ignore another notable bank with Quaker founders, Lloyds Bank. Like the Backhouses and Gurneys, the Lloyds were from outside London. They hailed from Birmingham, where Lloyds Bank was founded in 1765 by John Taylor and Sampson Lloyd. Similar to the other firms, Lloyds’ founders had been in other businesses before starting a bank. Sampson Lloyd, the Quaker of the founding pair, had owned an iron foundry before becoming a financier and as it happens, he was also the younger David Barclay’s father in law (see the simplified family tree below).
Today among the largest British banks, Lloyds was run out of a single branch in Birmingham for almost a century. The city was an appropriate cradle for a bank as it was a booming industrial city in the 19th century. To be sure, like Barclays, Lloyds was also enlarged by amalgamations over its 250-year history. Regardless though, the Quakers’ reputation for trustworthiness and prudence, or at very least their entrepreneurial vocational callings, surely had something to do with the success of their founding families as well.
Lesson
Like other nonconformist sects, the Quakers were a disadvantaged group in Britain for well over a century. Rather than diminish their success in business, this fact may have helped launch it. It could not have hurt that their religious teachings and practices emphasized trust and prudence. These factors likely helped make the Quakers particularly good bankers. It must also say something of their spirit that individual families produced men and women as dedicated to interests outside of business as David Barclay, Elizabeth Fry, and Priscilla Wakefield. The accomplishments of these banking families did more than change British finance and did more than change Britain alone.
Further Reading
1. Hannah, Leslie. “Barclays History.” Barclays.
2. “Our History – Lloyds Bank (Est. 1765).” Our Heritage, Lloyds Banking Group.
3. “Quaker Bankers in Britain.” Quakers in the World, QuakersInTheWorld Web Portal (QITW), 2010.
4. Ronson, Jane. “Quaker Bankers and Their Archives at Barclays Group.” Archives Hub Blog, 1 Aug. 2018.
5. “When Bankers Were Good.” Presented by Ian Hislop, British Broadcasting Corporation, 23 Nov. 2011.
