The Press Saturday, March 26, 1932. A Great Financier.

Press, Volume LXVIII, Issue 20505, 26 March 1932, Page 14

The Press Saturday, March 26, 1932. A Great Financier.

Mr Montagu Norman's re-election as Governor of the Bank of England for a twelfth term, the other day, was a tribute of one kind, and without parallel. Some years ago Mr Snowden, writing , in the Banker, paid him another, of a different and even more remarkable kind, when he rated Mr Norman's services to Europe above those of any statesman. The credit due to financial genius, especially in times of crisis, has been obscured by the tendency of historians to fix attention on the kings, prelates, and soldiers, and the tendency has been resisted almost entirely in favour of statesmen, such as Peel, the younger Pitt, and "Walpolc, strong and skilful in finance. Very little notice has been taken of the less central but highly influential figures, the merchants and financiers, who often made it possible for history to be made —men like William dc la Pole, the Hull merchant, who armed and furnished England for the triumphs of Crecy and Poitiers; or Jacques Coeur, of Bourges, whose money contributed probably as much as the scheming of Louis XL to the overthrow of the Crown's enemies. Among such powerful agents in national and international affairs, which history has begun to interpret more faithfully, one of the better known and most important is Sir Thomas Gresham, whose emblem, the grasshopper, still distinguishes the Royal Exchange, founded by him more than three hundred years ago. His career falls within a period which offered rich opportunities to enterprising members of the middle classes, newly emancipated from feudal traditions. He came of a good Norfolk family which had migrated to London early in the century, and had built up a considerable fortune. He was a partner in his father's business and a member of the Mercers and" Merchant Adventurers. Like his father, he established splendid estates by purchase and building and strong political connexions by lending money to the nobility. His public career began in 1551, when he was appointed " Royal "Agent" in Antwerp. This was one of the most important posts under the Crown. Antwerp was the great European money-market and the centre of European trade. Here were to be found tho most important financial houses, or their agents, and representatives of all the leading Governments. Gresham's business was to negotiate loans on behalf of the Government, for the Tndors hid early discovered the attractions of living on credit; to keep the Privy Council well primed with information about European politics; and to arrange for the export of munitions of war when necessary. He found the finances in a parlous state. A debt of £260,000 was rapidly mounting at 12 per cent, compound interest. The exchanges stood at 16s 6d for a pound English, and foreigners were battening on -their manipulation. Gresham succeeded in. paying off the old debis, in raising the rate of ex-, change to 225, and in negotiating new loans at a lower rate. When the exchanges were unfavourable, he set aside legislation and obeyed economic law by shipping bullion, which he .had to conceal in bags of pepper or in a cargo of armour. As for news, Gresham had his own methods for coli lecting the "advertisements," which he I sent twice a week to the Council. He lodged in the house of Gaspar Schetz, Charles "vVs agent, who would open his heart to his guest. He busily emj ployed spies. He found " banketts " very helpful in loosening reticent tongues, as when he won the confidence of the convivial Egmont, leader of the revolt against Spain. While, statesmen rose and fell, ' Gresham proved himself too valuable to i be dropped; but he did not serve his sovereign for nothing. ' Though he drew only a wage of 20s a day (for "diet") and frequently complained of its inadequacy, he was greatly advantaged by his inside knowledge of exchange movements in carrying on his own business. Further, like most public servants of his time, he feathered his own nest at the expense-—perhaps not undue—of the Crown. When his accounts were audited after eleven years, it transpired that, in accordance with custom, he had not kept his private accounts strictly' apart. • Over ten thousands pounds appeared to be owed by him to the Crown. This he airily explained away. "On the. other s hand, he pointed ont that, eleven years before, he had lent a smaller sum, never repaid, which, with compound interest at 12 per cent., and 22s 6d as* the rate of exchange, had now reached considerable proportions. -. Upon the Council's demurring, he secured.a duplicate copy of the statement, affixed a footnote purporting to acknowledge his claim, hurried off to the Qcsen, obtained the royal endorsement, and presented it triumphantly to* the dumbfounded Councillors. But the days of Gresham's activities in Antwerp were numbered. When the Netherlands broke into revolt against Philip of Spain, the merchants dispersed, and. Antwerp lost her position- as the J financial centre of Europe. Gresham withdrew, to " England. In 15601 he helped to carry out a great! recoinage of. the silver currency. His most cherished scheme was the erection of a "Bourse." or Exchange, where merchants could meet and do business under cover, instead of congregating in the inclement air of Lombard street. A site was purchased by public subscription, and Gresham undertook to provide the building. In 1570, the Queen came in great state to open it, and conferred on it the title of the a Royal -Exchange." The building was destroyed one hundred years later in the Great Fire of London, but the grasshopper was re-erected on the new building. Another of Gresham's a, university in London, for

which he left money to endow seven lectureships, was fulfilled after three hundred years. Gresham was undoubtedly one of the greatest financiers of his time, and fully deserved his European reputation for economic wisdom. He is outstanding as a shrewd, energetic, and not over-scrupu-lous member of the middle classes, which came into their own in the sixteenth century, and left their imprint on that vigorous, hard-headed, successful age.