Female Financial Firsts 6: Chinese Creditors

One reason for Egypt’s prominence was its location. As part of the Mediterranean  littoral it linked the trade routes between Europe and Cathay – as China was known from Roman times well into the Age of Exploration (1400-1800). Babylonia too, following its decline, evolved from a transit point on the Silk Road between China and Rome into an integral part of Greater China. Suggesting that some innovations begun in Sumeria (see my earlier posts) may have spread east.

As many are now aware, Chinese civilization is nearly as ancient as that of the Sumerians. China’s oldest documented regime, the Xia Dynasty, dates to the 20^th century BC. Unfortunately, due to wars and book burnings, few financial Chinese records have survived from earlier than the 19^th century – 200 years ago. Those records that have come to light owe more to happenstance or isolation than to any plan of preservation.

The earliest known Chinese records of financial transactions were discovered accidentally. At the start of China’s Cultural Revolution (1966-1976), 15 paper sheets used as packing for an ancient, paper coffin, were unearthed. The 54 pawnshop transactions recorded on this graveyard material date from the Tang Dynasty (618-907). As one might expect, these documents shed light on the active and strong presence of Chinese women in financial transactions.

Appropriately two women historians have studied this phenomenon in detail. Their conclusions suggest an unanticipated connection between God and Mammon. “The rise and spread of pawnshops coincides with the introduction of Buddhism to China, and indeed the first pawnshops were located in Chinese monasteries.”[i]

The pawnshop then, as now, operated as a quick source of financing for working people. In need of cash, individuals could offer a possession – sometimes literally the shirt off their back – in exchange for ready cash. The pawned possession could be redeemed within a set period of time for a sum that usually imputed a double digit return for the pawnshop.

Women from the Tang Dynasty circa 700 AD

Professors Valerie Hansen and Ana Mata-Fink, who have studied the documents, made this discovery: “of the twenty-nine borrowers whose names are recorded, nineteen are distinctly male names and ten female names….The women have surnames but no given names. Instead they are referred to by their position within the family: ‘woman’ (niang), ‘old woman’ (po), or ‘younger sister’ (mei).”[ii] These transactions can be dated to the late 7^th century, sometime between the years 662 and 689 A.D.

Fortunately, and thanks to these documents, we know something of these women and these, the earliest known financial transactions involving women in China. Transactions on a single day – the 18^th day of the first lunar month of an indeterminate year 

-          “Woman Yin”, in exchange for “one old yellow cloth shirt”, received 100 coins on the 18^th of the first month of the lunar year. She redeemed her shirt five days later.

-      -           He Qiniang, who lived in the Alley behind Guanyin Monastery, in exchange for an unknown pawned item received 120 coins – which she redeemed on first day of the following month.

-      -          That same day, thirty-six year old Yang Erniang, who lived in “North Alley”, deposited an old white silk scarf (patterned with small, damasked diamonds) and received 20 coins. The seventh day of the following month she redeemed her scarf.[iii]

All these transactions took place in Chang’an (長安), at that time the capitol city of China (today known  as Xi'an 西安).

As we shall see in other locales, there was a further connection between worship and wealth in this development. “As in Europe, pawnshops were a forerunner to banks, and borrowers could, through repeated transactions, obtain large loans against relatively small amounts of collateral….The origins of Chinese pawnshops lay in Buddhist monasteries, and they remind us that the innovation of making a loan against a pledge was not unique to the Western world.”[iv]

Endnotes

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[i] Valerie Hansen and Ana Mata-Fink, “How Business Was Conducted on the Chinese Silk Road During the Tang Dynasty, 618-907,” p. 58, 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).

[ii] Valerie Hansen and Ana Mata-Fink, “How Business Was Conducted on the Chinese Silk Road During the Tang Dynasty, 618-907,” p. 56, 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).

[iii] Valerie Hansen and Ana Mata-Fink, “How Business Was Conducted on the Chinese Silk Road During the Tang Dynasty, 618-907,” p. 60, 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] Valerie Hansen and Ana Mata-Fink, “How Business Was Conducted on the Chinese Silk Road During the Tang Dynasty, 618-907,” p. 59, 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).

Copyright 2013 by David Baeckelandt. All rights reserved. Please do not plagiarize. No reproduction in any form permitted without my express, written permission. Thank you!

Female Financial Firsts 5: Cleopatra's Coins

Statue of Cleopatra at the Royal Ontario Museum

While Roman rights offered great opportunity for financial freedom, it was a non-Roman who captures the next claim to a Female Financial First.

Historian William Monter in his excellent The Rise of Female Kings of Europe, 1300-1800, claims that before the year 1300 there were approximately two dozen women sovereigns of important monarchies around the world.[i]  Unfortunately, thanks to the ravages of time, the extant documentary records are incomplete. Yet what has survived is incontrovertible because it is metal.

"This hard evidence is first and foremost numismatic. For over two thousand years the issuing of coins has been a universally recognized method for both male and female sovereigns to proclaim their official status."[ii] 

Cleopatra's silhouette is the first woman ruler's likeness on a coin

Among these madam monarchs, perhaps the best recognized (and least matronly?) was the woman vilified by the Romans, made famous by Shakespeare, and (much later) immortalized by Elizabeth Taylor[iii]: the monarch known today as Cleopatra (69-30 BC). The great Roman poet Lucan, who was a close, personal friend of the Emperor Nero (at least until Nero ordered him to commit suicide) devoted his entire final tenth chapter of his “History of the Civil Wars” to the story of Caesar and Cleopatra, and the tumultuous times of the previous century.  Her legacy was such that Lucan openly wondered “Whether a woman, not of Roman blood, Should hold the world in awe.”[iv]

While Cleopatra’s story may not justify subsequent centuries’ fascination, she did contribute a financial first. More properly addressed as Cleopatra VII, she was “the first woman ruler to put both her image and titles on numerous coins struck both in Egypt and in several parts of the Eastern Mediterranean”.[v]

Hailed a “great beauty” by contemporaries[vi], Cleopatra was also an energetic ruler. Ascending to the throne at the age of 18, she somehow managed to bear children from two of the most powerful Roman generals of her time: Mark Antony and Julius Caesar. Love and politics rarely mix well and these matches proved fatal for Cleopatra, who met a difficult and untimely end (suicide at the age of 39).

Cleopatra was the last in a line of ruling Pharaohs. As such her story slips easily into European history (even though, by geography, she belongs equally to Africa and perhaps even to Asia). Still, if we look beyond our Mediterranean littoral, strong documentary evidence exists of women involved in financial firsts well before the last of the Pharaohs. It is to the East that we will turn next.

Endnotes

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[i] William Monter, The Rise of Female Kings of Europe, 1300-1800, claims (New Haven: Yale University Press, 2012), p.2. Wikipedia has an excellent excerpt on this subject: “Women had a high status in ancient Egypt and enjoyed the legal right to own, inherit, or will property. A woman becoming pharaoh was rare, however; only Sobekneferu, Neferneferuaten, Cleopatra VII and possibly Khentkaus I and Nitocris^[18] preceded her in known records as ruling solely in their own name. The existence of this last ruler is disputed and is likely a mis-translation of a male king. Twosret, a female king and the last pharaoh of the nineteenth dynasty, may have been the only woman to succeed her among the indigenous rulers. In Egyptian history, there was no word for a "queen regnant" as in contemporary history, "king" being the Ancient Egyptian title regardless of gender, and by the time of her reign, pharaoh had become the name for the ruler. Hatshepsut is not unique, however, in taking the title of king. Sobekneferu, ruling six dynasties prior to Hatshepsut, also did so when she ruled Egypt. Hatshepsut had been well trained in her duties as the daughter of the pharaoh. During her father's reign she held the powerful office of God's Wife. She had taken a strong role as queen to her husband and was well experienced in the administration of her kingdom by the time she became pharaoh. There is no indication of challenges to her leadership and, until her death, her co-regent remained in a secondary role, quite amicably heading her powerful army—which would have given him the power necessary to overthrow a usurper of his rightful place, if that had been the case.” http://en.wikipedia.org/wiki/Hatshepsut

[ii] William Monter, The Rise of Female Kings of Europe, 1300-1800, claims (New Haven: Yale University Press, 2012), p.2

[iii] See a description of Elizabeth Taylor’s career defining role as Cleopatra here

http://en.wikipedia.org/wiki/Cleopatra_(1963_film) .

[iv] See the online English translation of Book X of Lucan’s “History of the Civil Wars” here: http://omacl.org/Pharsalia/book10.html   (quote from lines 79-80). Accessed May 16, 2013

[v] William Monter, The Rise of Female Kings of Europe, 1300-1800, claims (New Haven: Yale University Press, 2012), p.6

[vi] There is great debate about how Cleopatra looked. By contemporaries she was hailed as a great beauty. The poet Lucan, who theoretically was able to consult contemporary records, wrote (about 61 AD – 100 years after her death) that Cleopatra was “so fair haired that Caesar said he had never seen hair so red in the Rhine country [i.e., Germany]”. Joann Fletcher, Cleopatra the Great: The Woman Behind the Legend, (New York: Harper Collins, 2008), p.106. A more recent examination of this pressing issue can be found here; http://www.dailymail.co.uk/sciencetech/article-1095043/Sorry-Liz-THIS-real-face-Cleopatra.html

Copyright 2013 by David Baeckelandt. All rights reserved. No reproduction in any form or format permitted without my express, written permission. Sorry! 

Female Financial Firsts 4: Roman Rights

A famous French scholar had this to say about women and finance in Ancient Rome. "One of the most curious characteristics of that age was that the women appear as much engaged in business and as interested in speculations as the men. Money is their first care. They work their estates,  invest their funds, lend and borrow.”  The author goes on to explain that the famous Roman orator Cicero, no less, both borrowed from and loaned to women.[i]

The Romans, as the polymath UC Berkeley Professor Ulrike Malmendier points out, were the first to develop what we today call the corporation. The Latin term was “Societas Publicanorum”. If the concept of a publicly-traded company “marks the height of the evolution of business organizations,” as Professor Malmendier states, then Roman business had made remarkable strides just a few hundred years after the origin of the Oracle at Delphi. Moreover, according to Professor Malmendier, Romans also created the innovation of “paretes” – publicly traded shares in corporations.[ii]

Frustratingly, while she underscored the unique contribution to financial history of these Roman financial innovations, nowhere does Professor Malmendier describe a woman’s involvement. But since in citing her examples she quotes Cicero, and since Cicero himself cites female involvement in the business world it is difficult to believe that no woman participated in the “speculations as the men” in the paretes  of the Societas Publicanorum.

Much of my reasoning here is based on a simple fact. During much of this period although Greek culture (which did not explicitly permit gender equality) was pre-eminent, by 100 B.C. Rome was the financial capital of the European world. And it was Roman might and rights enabled free trade to flourish.

On the ‘rights’ side of that successful equation were generous rights to women. Some of these rights vanished with Rome’s empire. For example, women could own property and although not able to vote, they were not subject to taxes on their wealth. Naturally, fathers, husbands, brothers and sons sought to exploit this legal loophole. So much so that “by 169 B.C. so much property had passed into the hands of women that the law forbade a man to will as much as half his property to women.”[iii]

This law was later abolished. When Rome fell in 476 AD many of the Greco-Roman contributions in arts, the sciences, and, of course, finance were lost. Fortunately, and at almost the same time, a new Female Financial First was being created in Rome’s backyard – a satellite civilization on the Mediterranean littoral 2000 years ago that absorbed Greco-Roman influences: Cleopatra’s Egypt.

Endnotes

---

[i] Gaston Boissier, Cicero and His Friends: A Study of Roman Society in the Time of Caesar, (Londoin, A.D. Innes & Co, 1897) Questia online edition  http://www.questia.com/read/10552570/cicero-and-his-friends-a-study-of-roman-society-in  Accessed May 14, 2013

[ii]  See Ulrike Malmendier, “Roman Shares,” pp.31-42, 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).

[iii] Sydney Homer and Richard Sylla, A History of Interest Rates, (New York: John Wiley & Sons, 2011), p.46

Copyright 2013 by David Baeckelandt. Sorry folks but all rights reserved. No reproduction in any form without my express, written permission. 

Female Financial Firsts 3: The Keys to Banks

A supplicant seeks an answer from the Oracle at Delphi

Greek Priestesses and the Keys to Banks

The superpower of the ancient world was Persia, a successor to Babylonia. Persia’s greatness stood unchecked until the Battle of Marathon in 490 BC. For several hundred years Greece ascended to the pinnacle of “soft” power and influence in the Ancient World (aka, the Golden Age of Greece). The Battle of Marathon also gave us one of our most enduring symbols of the financial sector: what today we call the “treasury”.[i]

Immediately following the victory, the Athenians built a “Treasury” for the city below Apollo’s Temple.[ii] Crafted of cut marble from the remnants of Marathon, it was intended to be sturdy, inviolable and burglar-proof. This treasury became the repository of valuables, wealth and functioned in many ways in the same way that a bank does today. In fact, recreations of this first treasury – pictured below – look remarkably like our classic bank building.[iii] The similarities are not accidental.

The Treasury at Delphi

The most prominent of all the Greek temples was the temple to Apollo at Delphi. The prominence of this temple was in part due to the future-telling prowess of the priestesses who, because they were deemed married to the Greek god Apollo, “were subject to the extraordinary requirement of perpetual celibacy.”[iv]

But these women were more than vestal virgins. Delphi’s pre-eminence derived from the perception that women prophesied the future there. Modern scientists (including Professor Richard Neer of the University of Chicago) have determined that in fact Apollo’s temple was built over a fissure in the earth, from which gaseous hydrocarbons rose. The “Pythia” (as the priestesses were called) propped themselves up on a three-legged stool over the fissure, inhaling the pneuma. Within a short time, the Pythia “would go into ecstatic union with Apollo, the god of phrophecy….In short, the high priestess got high.”[v]

At Delphi, “temples functioned as virtual [and actual] treasuries, filled as they were with precious offerings.”[vi]  As professors Homer & Sylla conclude. “The shrine at Delphi, the greatest of them all, is sometimes described as the great banker of the Greek world.”[vii]

Like their earlier, Babylonian predecessors, priestesses at Delphi guarded the wealth of their fellow citizens. While Athen’s Delphic Treasury may have been the first and most prominent, it was not the only temple. A modern archaeological website suggests that there are twelve excavated treasuries at Delphi.[viii]

More than 2,000 years ago these treasuries were under the protection and integral to temples. These temples were devoted to a specific god or goddess and controlled by Greek priestesses. It was only the Greek priestesses who – literally – possessed a key to the treasury in the temple.[ix] These keys were metal and locked and unlocked the temple treasury doors.

In short, treasuries, the modern day bank building – and the literal keys to the treasures within – owe a great deal to the Greek priestesses of Delphi.

Collier's painting of the Oracle at Delphi

Endnotes

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[i] http://www.coastal.edu/ashes2art/delphi2/sanctuary/athenian_treasury.html  Accessed May 2, 2013

[ii] Ralph T. Neer, “Delphi, Olympia, and the Art of Politics,” pp.225-264 in H.A. Schapiro, Ed., The Cambridge Companion to Archaic Greece, (New York: Cambridge University Press, 2007), p.249

[iii] “Prior to 1930, most American banks were designed in the classical style. To attract depositors, owners and trustees favored traditional architectural imagery – large, often free-standing, stone structures in the classical style that signaled financial stability and integrity. These structures, whether located in small towns or large cities, projected a strong civic presence and many became centerpieces in their communities.” http://home2.nyc.gov/html/lpc/downloads/pdf/reports/jamaicasavings.pdf

[iv] Joan Breton Connelly, Portrait of a Priestess: Women and Ritual in Ancient Greece, (Princeton: Princeton University Press, 2007), p.73

[v] William J. Broad, The Oracle: Ancient Delphi and the Science Behind Its Lost Secrets, (New York: Penguin, 2006), p.238

[vi] Joan Breton Connelly, Portrait of a Priestess: Women and Ritual in Ancient Greece, (Princeton: Princeton University Press, 2007), p.93

[vii] Sydney Homer and Richard Sylla, A History of Interest Rates, (New York: John Wiley & Sons, 2011), p.37

[viii] http://www.stoa.org/metis/cgi-bin/qtvr?site=delphi  Accessed May 4, 2013 This is a fantastic website for trolling thru the archaeological site at Delphi and comparing the ruins to artists’ renditions in their original state.

[ix] Men sometimes held the temple key in extant carvings but “images of men carrying temple keys are rare.”Joan Breton Connelly, Portrait of a Priestess: Women and Ritual in Ancient Greece, (Princeton: Princeton University Press, 2007), p.93

Copyright 2013 by David Baeckelandt. All rights reserved. No reproduction in any form without my prior, written consent. That means you!

Female Financial Firsts 2: Sumerian Shekels

Long before Jane Hoare’s Valentine’s Day stock transaction (see my earlier piece here), women were making and establishing “firsts” in finance. Female firsts were not the exclusive domain of European women. Women from America, Asia, and Africa also led financial innovations. This post, while brief, will be the second in the series but the first chronologically in my series.

The Great Ziggurat at Ur

Babylonian Bankers

Historians often trace the beginnings of Western Civilization to a place firmly in Asia: Babylonia in the 25^th century BC. Since Babylonia is thus considered the cradle of Western Civilization it may not be surprising that women were active in financial transactions there and at that time.[i] In fact, Columbia University Professor of Ancient and Near East History Marc Van De Mieroop, a scholar of the period, broadly asserts that “loans with interest are thus first attested [to] in Babylonia.”[ii]

Four thousand years before the present, women were at the forefront in this, the very first series of financial transactions. The few records that have survived to the present hint at modern-sounding banking functions such as accepting deposits, making loans, and transferring credit between merchants.

Dr. Van De Mierop demonstrates that the earliest examples of interest bearing loans were found in ancient Sumer – the ancient kingdom from which Babylonia emerged. Sumerians, “men, and some women, with access to disposable wealth handed out small loans, made advances for people who could not pay their rental fees, and in various other ways became creditors.”[iii]

More importantly, these provisions included explicit recognition of women’s rights. As financial historians Sydney Homer and Dick Sylla put it: “The wife’s signature was often required in a loan contract. Women’s property rights were protected by the Code.”[iv]

Mesopotamian-area temples, both Babylonian and Assyrian, were at the apex of these developments – in part because they became extremely wealthy as tithes of grain and coin poured. In fact it appears that temples dominated finance.[v] 

An ancient Ziggurat in Iraq from a 2005 photo

Of these a significant number were dedicated to goddesses.[vi]

In what may be the earliest reference to a woman borrowing – and repaying – money, scholar Rivkah Harris at the University of Chicago offered this (undated) detail:

“Amatum, a woman, had borrowed a relatively large sum of money from [the temple of] Isarpadda, an otherwise unknown god. She [repaid] the money to Isarpadda and his agent Irra-gaser….It was probably Irragaser along with Isarpadda who gave the original loan to Amatum.”[vii]

Not all loans were of coins – barley appears to be the borrowed item as well.[viii] Interest was sometimes stated and sometimes not. Payment could often be made in kind.[ix] One woman was required to sacrifice two rams in lieu of interest payments.[x]

However, borrowing goods and repaying via sacrifice sounds quite different from a modern loan. It is refreshing then to learn that financial borrowing did occur in ancient times and the earliest examples extant includes one where a woman acts as lender. 

Sumerian Shekel

Professors Homer and Sylla show that among the very first recorded loans was a temple priestess lending to a local man in about the year 2000 B.C.:

“’Two shekels of silver have been borrowed by Mas-Schamach, the son of A., from the sun-priestess Amat-Schamach, daughter of W. He will pay the Sun-God’s interest [20-25%?]. At the time of harvest he will pay back the sum and the interest upon it.’”[xi]

As far as is known, this is one of the earliest recorded financial transactions in history.

If one can get past terms like ‘priestesses’ and ‘shekels’, the above transaction – perhaps the very first known to humans involving women – has all the elements of a modern loan (interest, parties, term, etc.). Over time this transaction and others like it evolved into proto-banking activities.

Commerce is dependent on good governance. Sumeria was fortunate in this regard. Well before the onset of a modern legal system, Hammurabi’s Code – the first known codified legal system – made provisions for financial agreements.[xii]

Like the spread of Hamurabi’s Code, mirror banking practices were likely adopted by neighboring societies because of the logical necessity. Within years of the priestess’ 2 shekel deal, loans like it could be found nearly everywhere in the Mideast – except for, curiously enough, Egypt.[xiii]

Babylonian tablets such as these captured the terms of their loans

My next post will discuss Greek contributions to Female Financial Firsts. 


Copyright 2013 by David Baeckelandt. All rights reserved. No reproduction in any form without my express, written consent.

Endnotes

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[i] Just before press time I became aware of Aaron Jacob Skaist’s The Old Babylonian Loan Contract: Its History and Geography , (Tel Aviv: Bar-Ilan University Press, 1994) http://www.amazon.com/The-old-Babylonian-loan-contract/dp/9652261610 . There may in fact be other important references but I will have to add more at another time.

[ii] Marc Van De Mieroop, “The Invention of Interest: Sumerian Loans,” p. 30, 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).

[iii] Marc Van De Mieroop, “The Invention of Interest: Sumerian Loans,” p. 20, 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] Sydney Homer and Richard Sylla, A History of Interest Rates, (New York: John Wiley & Sons, 2011), p.27

[v] Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.127

[vi]“Goddesses, too, are mentioned in temple loans: Inanna Kititum and Istar in Neribtum (Ish 134, 144 and A 7728 respectively), Gula along with Ninlil in Ur (UET 5 311), Ninegal and Inanna of Zabalam in Larsa (the former BIN 7 160, the latter BIN 7 164 and 165). In one Sippar temple loan the goddess Aja appears alongside her consort Samas (VAS 8 128).” Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.128

[vii] Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.130

[viii] Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.130

[ix] Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.132

[x] Rivkah Harris, “Old Babylonian Temple Loans”, pp. 126-137 in Journal of Cuneiform Studies, Vol 14 (1960), p.132

[xi] Sydney Homer and Richard Sylla, A History of Interest Rates, (New York: John Wiley & Sons, 2011), p.29

[xii]  See the well-written blog post on lending and Hamurabi’s involvement here; http://blog.prosper.com/2008/06/30/history-of-peer-to-peer-lending/  Accessed May 11, 2013

[xiii] Marc Van De Mieroop, “The Invention of Interest: Sumerian Loans,” p. 30, 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).

Who Was Jane Hoare?

©Copyright 2013 by David Baeckelandt debendevan@hotmail.com

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 11^th 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

Endnotes

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

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[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 1^st 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 http://econpapers.repec.org/article/cupfihrev/v_3a11_3ay_3a2004_3ai_3a02_3ap_3a197-224_5f00.htm , Accessed April 6, 2013

[xvi] Ann M. Carlos, “Markets and History”, University of Colorado newsletter, Fall 2009, p.3 http://www.colorado.edu/econ/news/Newsletters/fall09-newsletter.pdf , 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.