XII. Samuel Gurney (1786-1856)

One of the Norman barons who came to England with William the Conqueror in 1066 was Hugh de Gournay; and when William divided the best portions of the land among his leading followers, large grants in Norfolk, Suffolk, and elsewhere were made to the Lord of Gournay. His descendants were men of mark during the ensuing centuries. In the time of Queen Elizabeth, if not before, they began to be merchants, the younger sons generally taking to commerce, while the elder ones settled down as country gentlemen. One of these trading members of the family, a John Gournay or Gurney, who was born in 1655, and who became a Quaker soon after the Quaker doctrines had been first preached by George Fox, became especially eminent in business. He was a manufacturer, a merchant, and a banker in Norwich, and his offspring carried on his callings, especially that of banking, with notable success. It is with his great-great-grandson that we have here to concern ourselves.

Samuel Gurney, the brother of Elizabeth Fry and Joseph John Gurney, two eminent philanthropists, was born at Earlham, near Norwich, on the i8th of October 1786. He was John Gurney s second son and ninth child. At the age of seven he was put to school with the Rev. John Henry Brown, a pupil of the celebrated Dr. Parr, and at fourteen he was apprenticed to the Clothworkers' Company in London, and placed in the counting-house, in St Mildred's Court, Poultry, in which his brother-in-law, Joseph Fry, who was also a partner in the bank of Frys & Chapman, carried on an extensive trade as a tea-merchant "He took to business and liked it," according to the report of his niece, whose first remembrances of him were as an inmate in the St Mildred's Court household.

"In the countinghouse, as well as in domestic life, he was extremely amiable and cheerful, and was beloved by the whole establishment. Although not brought up in conformity to the costume or speech of the Society of Friends, he showed no propensity to follow fashions or gaiety of appearance beyond a suitable neatness of attire."

From the very first, indeed, he seems to have been so thoroughly a man, or rather a boy, of business, as to have cared for no lighter occupations. In 1807, when his sister Hannah married Thomas Fowell Buxton, he went down to the wedding, but, it is recorded, tired of the festivities long before they were over, and was glad to get back to his book-keeping and money-changing.

In the following year, however, Samuel Gurney was married himself, his wife being Elizabeth, the daughter of James Sheppard of Ham House, in Essex, a handsome residence that soon descended to the young couple, and was their place of abode during nearly the whole of their married life. The wealth that came to Samuel Gurney from his father-in-law, as well as that bequeathed to him by his father, who died in 1809, helped him to make rapid progress in the new business in which he had embarked a little while before, on his reaching the age of twenty-one.

The business had begun a few years earlier than that, growing out of a yet earlier connection between Joseph Smith, a wool factor in London, of the firm of Smith & Holt, and the Norwich Bank. Joseph Smith had found the advantage of applying part of his savings as a merchant to the then very slightly-developed trade of bill-discounting, and John Gurney of Norwich, with whom he had been acquainted long before, when both were simply dealers in raw wool and manufactured cloths, also found the advantage of sending up to him some of the surplus money of the Norwich Bank, for investment in the same way, paying to Smith, as his commission, a quarter percent, on the money laid out in each transaction. This arrangement having continued for some time, it occurred to Smith's confidential clerk, Thomas Richardson, by whom most of the bill business had been done, that there was room in London for a separate establishment devoted to trade in bills. He asked his employer to open an establishment of that sort, taking him as managing partner therein. This Joseph Smith refused to do, and Richardson resigned his clerkship in consequence. He found the Norwich Gurneys, however, more favourable to his project, and about the year 1800 the house of Richardson, Overend, & Company was founded, the management being divided between him and John Overend, formerly chief clerk in the bank of Smith, Payne, & Company. Simon Martin, an old clerk in the Norwich Bank, went to London to help to build up the business, and to watch its movements on behalf of the bank, whence most of the money was obtained for investment.

The enterprise throve wonderfully from the first, one great source of its popularity being the change introduced by the new firm. which charged the quarter percent commission against the borrowers of the money, instead of the lenders as heretofore; and in 1807 John Gurney added vastly to its strength by introducing his son Samuel as a partner. About that time Thomas Richardson retired from the business. It was carried on under the name of Overend & Company, even after John Overend's death, until the secret of its connection with the Norwich house could no longer be kept, and it assumed its world-famous title of Overend, Gurney, & Company.

It won its influence and fame through the skilful way in which its founders contrived to profit by the altered circumstances of modern commerce. In simpler times money meant only gold, silver, and other precise sorts of current coin. But the increase of trade and population, carrying with it a yet greater increase in the demand for money and the uses to which it may be put, has necessitated an entire revolution in the finance of commerce.

Money is now not gold and silver alone, but gold, silver, paper, and anything else that can be regarded as a trust worthy agent in the interchange of commodities and the bartering of capital, labour, and the like. Were we forced now to carry on all our commercial dealings by means of gold and silver, it would only be possible, in spite of the increase of our stores of these metals, to continue a very small portion of our present trade. This, however, no one now attempts to do. The legal currency, whether gold, silver, or bank-notes, is only a sort of pocket-money in comparison with the real currency of trade. It serves for the smaller sort of retail purchases, for payments across the counter, and the like; but the great] merchant has not in his possession all through his lifetime actual money equal in amount to the paper equivalent of money that passes through his hands every day in the week. All his important business is carried on exclusively by means of bills, bonds, cheques, and the other materials included in the terms "commercial debt" and "credit." His ready money is lodged with a banker, as has been the practice since the beginning of the eighteenth century, except that now he draws cheques for so much as he needs for use from time to time, instead of receiving from his banker a number of promissory-notes, to be passed to and fro, while the actual deposit was in the banker's hands, to be used in whatever safe and profitable way he chose. Now, however, the cheques are, in comparatively few cases, exchanged for real money, they being piled up by the bankers, into whose hands they come, and paired off one with another, or in heaps together, while the deposits that they represent are left untouched. In this way the money does double work, being itself available for use by the banker or his agents, while the equivalent cheques are quite as serviceable for all the purposes of trade.

And this is only the simplest instance of the modern principle of credit. In all sorts of ways, every bit of money and everything else that can be taken as a representative of wealth, whether actual or prospective, is turned over and over, each turning being a creation, to all intents and purposes, of so much fresh money. A merchant, for example, buys £1000 worth of goods for export, say to India, China, or Australia. He pays for the same by means of a bill of exchange, accepted as soon as possible, but not payable till two or three months after date. The manufacturer or agent of whom he buys the goods, however, does not wait all that time for his money. In all probability he immediately gets the bill discounted, thereby losing some £15 or £20, but having the sum of £980 or £985 available for appropriation in other ways, and thus for the acquisition of fresh profits. Before the original bill falls due, he has built perhaps twenty fresh transactions on the basis of the first one, and so, in effect, has turned his £1000 into £20,000, less the £300 or £400 that have been deducted by the bill broker as discount.

And the same original transaction has been made the groundwork of a number of other transactions on the part of the merchant who bought the goods. He bought them for £1000, to sell again for, say, £1200, part of the difference being his profit, part being absorbed in freight, insurance, and so forth. He is not likely to be paid for the goods in less than six months' time, and he has to pay for them in two or three months. But long before either of those terms expires, he has raised part of the money on the security of his bill of lading, and so is enabled to enter on other transactions, just as the manufacturer had done. In such ways as these, and they are numberless, a very small amount of actual money goes to the building up, on the one side, of a vast structure of credit, and on the other of a vast structure of commerce.

There was a hazy comprehension of this system long centuries ago. "If you were ignorant of this, that credit is the greatest capital of all towards the acquisition of wealth," said Demosthenes, "you would be utterly ignorant." But the modern theory of credit is very modern indeed, having almost its first exemplification, on a large scale, in the establishment of Overend, Gurney, & Company. This house, as we saw, was established to make a separate business of bill-discounting, much more complete and extensive than the chance trade in bills that had formerly been, and that continued to be, carried on by bankers, merchants, and all sorts of irregular money-lenders. Very soon after the time of Samuel Gurney's supremacy in it, it began to assume gigantic proportions, and it was for some thirty or forty years the greatest discounting house in the world, the parent of all the later and rival establishments that have started up in London and elsewhere.

At first only discounting bills, its founders soon saw the advantage of lending money on all sorts of other securities, and their cellars came to be loaded with a constantly varying heap of dock-warrants, bills of lading, shares in railways and public companies, and the like. To do this, of course, vast funds were necessary, very much in excess of the immense wealth accumulated by the Gurneys in Norwich and elsewhere. Therefore, having proved the value and stability of his business, Samuel Gurney easily persuaded those who had money to invest to place it in his hands, they receiving for the same a fixed and fair return of interest, and he obtaining with it as much extra profit as the fluctuations of the money-market and the increasing needs of trade made possible. He became, in fact, a new sort of merchant, buying credit—that is, borrowing money—on the one hand, and selling credit—that is, lending money—on the other, and deriving from the trade his full share of profits.

Great help came to his money-making and to his commercial influence from the panic of 1825. That panic arose partly from the excessive speculation which then existed in joint-stock companies at home, as well as in continental mines, American cotton, and other branches of foreign commerce. Several London banks failed, and at least eighty country banks fell to the ground, the Bank of England itself being only saved by the accidental finding of two million one-pound notes that had been packed away and lost sight of some time before. Even Joseph John Gurney, much more of a philanthropist than a banker, suffered from the pressure.

"Business has been productive of trial to me," he wrote in characteristic way in his journal, "and has led me to reflect on the equity of God, who measures out His salutary chastisement, even in this world, to the rich as well as the poor. I can certainly testify that some of the greatest pains and most burdensome cares which I have had to endure have arisen out of being what is usually called a 'monied man.'"

His brother, however, was much more mixed up in the turmoil.

"Knowing intimately, as he did, the sufferings which awaited those who could no longer command credit or obtain supplies from other quarters," said one of Samuel Gurney's old friends, "his anxiety was felt more on others' account than his own,"—the fact being, that his own financial dealings were so sound that he had no fear for himself, and only had to settle how to make most money with most secondary advantage to those he dealt with."

"His desire," it is added, "was to act fairly and justly to his fellow-creatures, as well as to himself; and thus did he move onwards, cautiously and step by step through those troublous times, lest he should lead any into error by his judgment. It was a remarkable sight to witness him plunge day by day into the vortex of City business, and return thence to his own domestic hearth without any trace of a mammon-loving spirit."

We can well believe that the honest Quaker was reasonably free from the "mammon-loving spirit;" but he knew well how to seek and secure his own advancement, and this he did very notably, by lending to many houses money enough to enable them to tide through their difficulties, and so bringing to himself much favour and much new custom during the following years. From this time forth he came to be known as a bankers' banker, taking the place, for many, of the Bank of England. Hundreds of private banks fell into the way of sending him, from time to time, their surplus cash, finding that they were as sure of getting it back whenever they wanted it as if they had lodged it in the bank of England, and that in the meanwhile they were getting higher interest for it than the Bank would have granted. "We do not feel the slightest dependence upon the Bank of England," said one of the number, Mr Robert Carr Glynn, in 1832, "nor do we feel the slightest obligation to it in any way."

Of that sort was the business by which Samuel Gurney grew rich himself, and helped others to become rich. While he was young and vigorous, he made money-getting his one grand pursuit. It is said of him that when once an elder friend warned him against too close attention to the things of this world, he replied that he could not help himself—he could not live without his business. During the last ten or twelve years of his life, however, he left nearly all the management in the hands of others, and found his occupation in enjoyment of his princely fortune and application to various charitable and philanthropic undertakings. Charitable he had been all through his life.

"Many are the solid remembrances of the more prominent features of Mr Gurney's charities," says his very friendly biographer; "but besides those deeds more generally known to the public, there were many lesser streams of silent benevolence still flowing from the fountain of love to God and man, which spread refreshment around. To many members of his large family his kindly aid was given, and it might be said that not only there, but elsewhere, he was wonderfully gifted both with the will and with the power to help. Besides his efficiency in action, his very presence seemed to impart strength, courage, and calm in any emergency, whilst his practical wisdom, his clear and decisive mind, and noble spirit of charity, led many to bring cases of difficulty before him, knowing from experience how sure and effective was his aid. It may be truly said of Samuel Gurney that he loved to do good service, whether by advice or money—by his sound judgment or well-apportioned aid. He really took trouble to serve his fellow-creatures, and a narration of his mere almsgiving, extensive as it was, would give a very limited idea of the good he effected during the journey of life."

Through the time of his greatest wealth, he is reported to have spent £10,000 a-year in charities, and one year, it is said, the amount exceeded £16,000. Many are the records of his kindly disposition, shown in little ways and great.

"One afternoon," says one of his clerks, "as Mr Gurney was leaving Lombard Street, I saw him take up a large hamper of game to carry to his carriage. I immediately came forward and took it from him. He looked pleased, and in his powerful and hearty voice exclaimed, 'Dost thou know H_____ 's in Leadenhall Market?' I replied in the affirmative. 'Then go there and order thyself a right down good turkey, and put it down to my account.'"

A more important instance of his generosity is in the circumstance that when, on one occasion, a forgery had been committed to the injury of his Lombard Street house, and the culprit lay i n prison with clear proof of guilt, Gurney refused to prosecute him, and so obtained his release. At another time, we are told:

"One of the silversmiths in the City, and a man of high esteem for his uprightness, was accused of forgery. The excitement as to the probable result of this inquiry was intense, and the opinions of men differed widely. On the morning of the decisive day," says the merchant who tells the story, "I chanced to hear that my friend Gurney was prepared to stand by the prisoner in the dock. I immediately proceeded to Lombard Street, where I found him occupied with the vast interests of his business, and asked him hastily whether common report were true. Upon which he said, 'After a most anxious investigation of the matter, I am firmly convinced of that man's innocence. I deem it my duty to express this conviction publicly, and will join him in the felon's dock.'' And most assuredly he went; nor could any one easily forget the intense sensation produced in the crowd of spectators when, on the prisoner being conducted to his place, the stately figure of Samuel Gurney presented itself to the public gaze by the side of the innocent silversmith."

THE TOWER OF LONDON.

In mitigation of the laws regarding forgery, in company with his brother-in-law, Thomas Fowell Buxton, Samuel Gurney first showed himself to the world as a philanthropist. He also took a lively interest in all plans for improving and increasing refuges and reformatories. He was for many years, after the death of William Allen, treasurer to the British and Foreign School Society, and to other like institutions he was always a good friend. Visiting Ireland in 1849, he astonished the inhabitants by the liberality with which he drained his purse to relieve them, as far as he could, amid their sufferings from the potato famine. At Ballina he found the town so full of paupers that there were none able to pay poor-rates, and the workhouse was consequently bankrupt. "I found an execution put into it," he said in one of his letters, "and all the stock furniture is to be sold off this week, when the poor will have to lie on straw, and the guardians must feed them as well as they can." He bought up the whole of the furniture for £200 in order that, being his property, it might be saved from the creditors.

In 1848 Gurney gave £1000 to the Government of Liberia, and he always took great interest in the prosperity of the little colony of freed slaves. Nor was he, like some anti-slavery worthies, careful only for the freedom of the blacks. In 1852 he sent a petition to the King of Prussia, on behalf of his dissenting subjects, praying that full religious liberty might be accorded them. The King answered that he did not mean to do anything that could distress "his good friend Gurney,"

Gurney was not a bigot. Some one having written to him, in 1855, complaining of the way in which Fox and Penn had been spoken of by Lord Macaulay, in his History of England he answered thus:—

"It if a little mortifying that Macaulay should so have held up our honourable predecessors; not that they were perfect, or were ever held up as such, as far as I know; but they were extraordinary men, wonderfully elucidating and maintaining the truth. I am not prepared, however, to say that Fox was clear of eccentricities, and that, at times, he was not, to a certain extent, under such influence on his conduct; but, taking him for all in all, he was wonderfully gifted and enlightened. It will probably be considered by Friends whether there should be an answer somewhat official to these attacks on our two worthies. I rather lean to it, although it would be impossible to reach wherever Macaulay's book may go; yet, if well done, it might have a beneficial effect upon the public mind, and upon our young people. There is, however, one consolation. 'The truth as it is in Jesus,'—the truth as maintained by Friends—is unchangeable, and remains the same, however feeble, or even faulty, its supporters may have been and are."

That letter was written from Nice, whither Samuel Gurney had gone after the death of his wife, hoping to improve the health that had been greatly shattered by his loss, and the anxiety that preceded it. But in that he was mistaken. Growing worse in the spring of 1856, he hurried homewards, hoping to end his days in his own country, and among his own kindred. He reached Paris, but could go no further. There he died, on the 5th of June, 1856, seventy years old, and one of the richest and most envied men in Europe.

The house of Overend, Gurney, & Company, which he made so famous, lasted only ten years longer. On Samuel Gurney's retirement, Mr David Barclay Chapman became the chief manager of the business. He retired in turn, late in 1857, and then the direction fell into less skilful hands. The establishment became a Limited Liability Company in August 1865, and failed in May 1866.