Saturday, May 11, 2013

Who Was Jane Hoare?

©Copyright 2013 by David Baeckelandt
No Reproduction permitted in any form without my express, written consent.

Receipt written by Mrs. Jane Hoare. Author's collection.
On Valentine’s Day in the year 1729 a woman wrote out the above instruction for her shares in the South Sea Company stock.

Mr. Lockyer
Pray pay Mr. Christopher Arnold my Dividend now due and hereafter to grow due upon all my South Sea Stock that I now have or shall have and I do hereby Impower the said Chris_r Arnold to Accept for me any Stock that is or shall be put to my Name in the Books of the said Company & this shall be your Warrant for the same.
Feb. 14; 1729                                                                                      Jane Hoare

As a collector of antiquated financial documents sometimes I do not know what I have bought until after the fact. Although the date and the text intrigued me, there was no indication of background or origin in the document above. This lone example from one of the first financial bubbles sat neglected and virtually unnoticed at a prominent auction more than a dozen years ago. Yet the reality is that this may very well be the earliest ‘proof’ (outside of archives) written in a woman’s hand, of ownership in a publicly traded stock.

Jane Benson Hoare sometime after 1700. National Trust.

So Who Was Jane Hoare?
While England may have been a significant step behind the Low Countries in terms of property rights for the average woman, the moneyed elite were not as restricted.

Moreover, although literacy rates in 1700 were abysmal – less than half of all males and perhaps a third of all women in England could comfortably read a novel – this was a dramatic increase from just two generations prior.[i] It is striking that we first see evidence of active women participants in the London stock market at the same time we see literacy rates for women creeping higher. In fact, a near contemporary, Adam Anderson, writing in 1764 about the South Sea Bubble (circa 1720) had this to say:

“From morning till evening the dealers therein, as well as in South Sea-stock, appeared in continual crowds all over Exchange Alley, so as to choak [sic] up the passage through it….Persons of quality of both sexes were deeply engaged in many of these bubbles, avarice prevailing at this time over all considerations of either dignity or equity; the males coming to taverns and coffee houses to meet their brokers, and the ladies to the shops of milliners and haberdashers for the same ends.”[ii]

So who indeed was the lady mentioned at the start of this article, Jane Hoare? Financiers in the United Kingdom may well recognize the surname “Hoare”. C. Hoare & Co. is the oldest bank in the U.K. (and the fourth oldest in the world). 

The bank’s founder, the goldsmith Richard Hoare, got his start in 1672 when his employer died in a plague that swept through London.[iii]  Richard Hoare’s descendants continued to manage the bank until recently (Alexander S. Hoare, the 11th generation to run the bank, was the last).[iv]

Henry Hoare "The Good". Husband of Jane Hoare
Hoare’s bank was an active player in the markets from its earliest days. The bank catered to an impressive list of clients – including members of the aristocracy and a large number of MPs (Members of Parliament).  Hoare’s was a successful participant in the London stock market in the 1720s, earning returns that would be the envy of hedge funds today.[v]

The frothy stock market behavior of the year 1720 was driven by speculative fever. At least 190 companies came to market in what we today call “IPOs”.[vi] The resultant stock prices raised many stocks.

Purchases of South Sea stock by customers were greater than sales in 1729 at Hoare’s Bank.[vii] Nor was this a reflection of insider trading. As Professors Temin and Voth have statistically demonstrated, “Hoare’s trading record was impressive by almost any standard, and it was not due to chance” or insider access to decision makers.[viii] During the period of the “Bubble” in South Sea stock (February thru September of 1720) the partners not only made money for their clients they made money for the partners. The trading profits for that year were more than the cumulative over the Bank’s previous 20 years.[ix] But all of this was in the future and unknown at the time Jane Hoare came upon the scene.

Jane Hoare was in fact born Jane Benson in 1679. Her mother and the mother of her future husband Henry (“the Good” – pictured above) were in fact sisters. Despite the closeness in genealogy, the marriage appears to have been a happy one: 11 children were born to the union (although 6 died young). Two of their sons – also named Richard and Henry – later became partners in the firm.[x]
Exchange Alley in 1746

At the time Jane penned the instructions on the receipt, she had already been a widow for several years (Henry died in 1725 and left her £4000).[xi] At this time and place – 1720s England – widows, for legal as well as economic reasons, were the largest component of women investors in the market.[xii] This qualification is both in terms of average purchase as well as in terms of average activity.[xiii]

Mr. Lockyer, to whom she penned her note, was the Accountant for the South Sea Company (and therefore the person who maintained the South Sea company stock ledgers). Mr. Christopher Arnold, Mrs. Hoare’s agent, was in fact her husband’s former employee/ business partner and had known Mrs. Hoare for more than 20 years. So irregardless of the formal language, the transaction recorded by this receipt was a transaction between three individuals who had known each other for many years. 

Jane Hoare nee Benson was, however, neither a novice nor an anomaly in the stock market in the 1720s  when she inked her Valentine day note. In fact her father-in-law Richard Hoare, had been a Director  of the South Sea Company while her late husband, brother-in-laws, and sons had been both heavy investors in and active “stock-jobbers” (broker-dealers in American parlance) in the actual South Sea Company stock.[xiv]

As professor Ann M. Carlos has shown through recent research, women’s involvement in the London Stock Exchange actually increased between 1720 and 1725 – even as the market expanded.[xv] Moreover, this market activity did not go unrewarded. As Professor Carlos concludes: “Our research shows the same pattern [women making money and men losing money] across the South Sea Bubble of 1720 in Bank of England shares. Women, as a group, had capital gains, while men, as a group, had capital losses.”[xvi]

The frenzy of trading in Exchange Alley in 1720

Jane’s investment decision (to hold and accept dividends) neither supports nor refutes Professor Carlos’ declaration. The end-of-the-month trading data for South Sea stock record (on February 28, 1729) a closing price of £97.375 per share. This was the lowest month-end number since December 31, 1726. Moreover, the February closing price was the lowest of that year (1729). South Sea stock would not subsequently be quoted as lower until August 31, 1733 – 4 and ½ years later.[xvii]

Of course, even if Jane Hoare only owned 1 share (and the text of this document says “shares”) this was not an inconsiderable amount of wealth. At a time when the average laborer could count on annual income of less than £20, a single share at this time represented nearly five years’ gross earnings for most in Britain. Moreover, the dividends were an annuity stream that could enable them to live comfortably for years.[xviii]

Mrs. Jane Hoare was neither the first woman to become involved in the financial markets. Nor did she in fact blaze any particular trail of financial innovation. What we may however give her credit for is the fact that she may hold pride of place as having penned the oldest financial document knowingly recorded in a woman’s own script.

William Hogarth's satirical print of the South Sea Bubble's excesses

My grateful thanks to Linda Cunningham for inspiring this piece and series

[i] Paul J. Hunter, Before Novels: The Cultural Contexts of Eighteenth Century English Fiction, (New York: W.W. Norton & Co., 1990), pp.66-67. Note, Hunter does not state these numbers for 1700 but he does say that they reflect the literacy rates in 1675 and that these were unchanged in 1750. Hunter also states that English speakers were the most literate “in the world” and that the Scots at this time were the most literate in the English isles. New Englanders, however, surpassed even the Scots in literacy according to Hunter. However, I would treat these declarations with caution. Further, For an excellent discussion of the use of marks – simple and sophisticated – and signatures as a mark of literacy – please see Geoffrey Parker, “An educational revolution? The growth of literacy and schooling in early modern Europe”, in Tijdschrift voor geschiednis, 93ste jaargang 2, 1980, pp.210-220..

[ii] Adam Anderson & William Combe, An historical and chronological deduction of the origin of commerce from the earliest accounts, containing an history of the great commercial interests of the British empire: to which is prefixed an introduction, exhibiting a view of the ancient and modern state of Europe, and of the foreign and colonial commerce, shipping, manufactures, fisheries, &c. of Great Britain and Ireland and their influence on the landed interest, Volume 3 (Google eBook), (London, J.White, 1801), p.102. Reprint of the 1764 1st edition. Accessed March 29, 2013. Please not that it was not only the South Sea stock at this time that was caught up in the “bubbles” of the era. Numerous stocks for extracting beaver pelts and naval stores from America (or establishing colonies there), various practical infrastructure and agricultural (or sericulture) schemes also experienced rapid stock price gyrations. But other schemes ranged from the plain (“XXXVII Trading in Flanders Lace”) to the bizarre (“XXXVI Trading in Human Hair”) to the ambitious (“XLII For Better Curing Venereal Disease” or “LIII For Lending Money on Stocks, Annuities, etc.”) to the truly nutty (“XLIII A Subscription Advertized, and Actually Opened, For an Undertaking, Which Shall, in Due Time Be Revealed”or “LXIII Foor a Wheel For a Perpetual Motion”). –  Ditto, p.111

[iii] “At the end of the seventeenth century, the goldsmiths [of London] had become embryonic bankers learning the skills of lending money to a multiple of the reserves deposited with them.” See Antoin E. Murphy, “John Law: Innovating Theorist and Policymaker,” p. 230, in Origins of Value: The Financial Innovations That Created Modern Capital Markets, William N. Goetzmann and K. Geert Rouwenhorst, Eds., (New York: Oxford University Press, 2005).
[iv] Several excellent books are worth consulting for this story. The best, in my opinion, is Hoare’s Bank, ______
[v] “Hoare’s earned large returns on most of its holdings. Hoare’s realized a return of 75 percent per month in the Royal African Company in the early summer [of 1720]. In late April, the bank made a profit of 43 percent in 17 days in Ram’s Insurance. Hoare’s owned substantial holdings of Bank of England stock before the bubble began and bought more at various times in 1719 and in early 1720. The bank sold in April and again in August, earning an internal rate of return equivalent to 51 percent per annum.” p.1661 Peter Temin and Hans-Joachim Voth, “Riding the South Sea Bubble” in American Economic Review, Vol. 94, No.5, (2004) pp.1654-1668.
[vi] Niall Ferguson, The Ascent of Money: A Financial History of the World, (New York: Penguin, 2009), p.157
[vii] pp. 570-571 in Anne Laurence, “The emergence of a private clientele for banks in the early eighteenth century: Hoare’s Bank and some women customers” in Economic History Review, 61, 3 (2008), pp. 565–586.
[viii] p.1662 Peter Temin and Hans-Joachim Voth, “Riding the South Sea Bubble” in American Economic Review, Vol. 94, No.5, (2004) pp.1654-1668.
[ix] “On November 27, 1721, it was time for the partners at Hoare’s bank to collect their profits. Henry Hoare, the senior partner, had £21,000 transferred to his private account; Benjamin Hoare, the junior partner, transferred £7,000. These were not the normal distributions to bank partners at the end of an annual accounting period; the partners were reducing their involvement in trading stock and distributing profits. Proprietary trading during the South Sea bubble had been phenomenally successful—the partners probably earned as much in 1720 –1721 by
buying and selling stock as they had over the 20 previous years. Possibly no other single economic activity contributed as much to the partners’ prosperity during the bank’s early years” p.1666 Peter Temin and Hans-Joachim Voth, “Riding the South Sea Bubble” in American Economic Review, Vol. 94, No.5, (2004) pp.1654-1668.
[x] E-mail correspondence between the author and Ms. Pamela Hunter, Curator of the C.Hoare & Co. archives, September 7, 2012
[xi] Victoria Hutchings, Messrs Hoare Bankers: A History of the Hoare Banking Dynasty, (London: Constable, 2005), pp. 46-47
[xii] “‘’Over 1720, there were 6,844 total transactions with an average book value per transaction of £871.30. The book value of transactions was higher in the first half of the year than the second; £924 relative to £770. Narrowing our focus to those cases in which women were either the seller or the buyer, we find that, overall, women comprised 13 percent of the market by value of transactions. In terms of the number of transactions, women are listed as sellers in 649 separate transactions and as buyers in 550. Thus, when measured by the total number of transactions, women comprised 10 percent of all sales and 8 percent of all purchases across the Bubble.
In Figures 2a and 2b we show the weekly transaction activity by women. Of course, individuals could and did have multiple transactions. While there were nearly 7,000 separate transactions, there were only 2,233 unique sellers of Bank of England stock and 2,304 unique buyers. Of these unique sellers, 406 or 18 percent of the total were women; of the buyers, 366 or 16.3 percent of the total were women. Overall there were 577 unique women. “ p.209 in Ann M. Carlos and Larry Neal (2004). “Women investors in early capital markets, 1720–1725” in Financial History Review, 11, pp 197-224. doi:10.1017/S0968565004000137 
[xiii]Widows and spinsters were the main actors in the market [in England in 1720]. The average widow had a book value of sales of £674, while a spinster had a book value of £628. On the buying side, the average widow had a book value of purchases of £785, while spinsters had only £540.” Ann M. Carlos and Larry Neal (2004). “Women investors in early capital markets, 1720–1725” in Financial History Review, 11, pp 197-224. doi:10.1017/S0968565004000137  p.212
[xiv] “Richard Hoare was a director of the original South Sea Company. The Hoare family themselves were active in the stock market, and Richard’s sons, Henry and Benjamin, invested heavily in the South Sea Company, making some £28,000 from trading during the South Sea Bubble.” Anne Laurence, “The emergence of a private clientele for banks in the early eighteenth century: Hoare’s Bank and some women customers” in Economic History Review, 61, 3 (2008), pp. 565–586 – p.567

[xv]  “[In England] during [the year] 1720, women’s activity constituted 13 per cent of transactions [on the London Exchange] measured by value, 10 per cent of total sales and 8 per cent of total purchases. While individual women lost and made money from their market activity, women s net position over the [South Sea] Bubble was positive… By September 1720, women made up 20 per cent of Bank [of England] shareholders holding 10 per cent of the capital stock. By September 1725, women held nearly 15 per cent of a much larger capital stock.“ Ann M. Carlos and Larry Neal, “Women investors in early capital markets, 1720 1725”, Financial History Review, 2004, vol. 11, issue 02, pages 197-224 – Abstract , Accessed April 6, 2013

[xvi] Ann M. Carlos, “Markets and History”, University of Colorado newsletter, Fall 2009, p.3 , Accessed April 6, 2013
[xvii] Larry Neal, The Rise of Financial Capitalism: International Capital Markets in the Age of Reason, (New York: Cambridge University Press, 1990) 2002 Digital Print Version, pp. 236-237. Note: Neal list month end prices from September 29, 1711 until December 31, 1789. The Appendix with these and other prices is found on pp.231-257. 
[xviii]But what might the ownership of shares have meant for women more directly? Bank of England shares were a wealth asset. Again, from Erickson’s work on the probate records, she estimates the median wealth for an agrarian gentleman in the 14 counties in the seventeenth century to be £329. For a yeoman, the median wealth was £195, while the annual salary of an agricultural laborer in 1720 was at most £19 per year. Thus any woman who owned, for example, £400 of shares, and there were many, was wealthy. Shares also provided an income stream through the semiannual dividend payment. Again, £400 book value generated roughly £36 income per year. Even women who held £200 book value of shares or more were wealthy, while the income from £100 book value of shares or less could have had an impact on annual earnings. For those women who held as little at £9 book value of shares, such small holdings provided a safety net in the event of adversity. Bank shares were very liquid and the price was transparent. Even the smallest holding of £9 in this period had a market price of at least 150, which would have generated £13:10:0 if sold, which was two-thirds the annual wage of an agricultural laborer.” P.224 in Ann M. Carlos and Larry Neal (2004). “Women investors in early capital markets, 1720–1725” in Financial History Review, 11, pp 197-224. doi:10.1017/S0968565004000137.

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