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1792 - 1886
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The Origins of the Firm
Charles Stanley & Co. Limited can trace its origins in direct line back to the ferment of the Industrial Revolution.
Mechanisation advanced across the landscape, and great new cities were springing up in the shadows of the mokestacks. The Walker brothers, Samuel, Joshua and Joseph, had acquired the process of refining steel as early as 1748. By the 1780s the revolution was at full momentum. And against this grimy background cultural life was advancing
in parallel. One of the features of the age was the literary club. No self-respecting new metropolis was complete without its regular meetings of leading gentlemen to discuss philosophy, literature and the advance of science.
Sheffield, one of the greatest of the new industrial centres, brought its leading citizens together at The Monthly Club. Our story concerns five of its members: the three Walker brothers, Methodists, and the greatest Ironmaster in the north; Vincent Eyre, a Catholic, Agent of the Duke of Norfolk, the principal landowner in the area; and William Stanley, an Anglican, a local businessman described as a “gentleman well-known and much respected at Rotherham”. For some ten years they met regularly at The Monthly Club; in the spirit of the
new age their religious differences proved no bar to their friendship and collaboration.
The Walkers had a long history of industrial ventures and commercial enterprise. Vincent Eyre was Town Collector of Sheffield from 1790 to 1793 and was responsible for laying out much of the present-day residential and commercial districts. Less is known of William Stanley, but records suggest a number of previous ventures with the Walkers.
The explosive growth of industry demanded increasing quantities of capital to feed it. Initially the revolution had been financed from landed wealth; now it needed to recycle the profits it generated. New institutions were called for, and Roebuck’s, the first bank in Sheffield, was established in 1770. A spate of new banks followed, Broadbents in the same year, Shores in 1774, Haslehursts in 1783. All these early attempts eventually failed. More solid backing as
required if a bank were to succeed. And thus it was that the five wealthy members of The Monthly Club decided to go into partnership as bankers. Premises were chosen, at No 1 Fargate, near Norfolk Row. A partnership deed was drawn up, capital was subscribed, and on 2nd January 1792 Walkers, Eyre and Stanley Bank opened its doors for business.
The Early Years
From the outset the Stanleys were the ‘working’ partners. William Stanley retired almost at once, in 1795, to be succeeded by his son Richard. Successive partnership deeds show Richard contributing part of his share of capital by working in the bank.
The early years were testing times. A series of economic crises forced the closure of one bank after another. Walkers, Eyre and Stanley Bank was, according to contemporary reports, managed with the utmost prudence. As business expanded the bank moved, in 1809, to Church Street, next to Cutlers’ Hall. This was the site of Roebuck’s Bank, Sheffield’s first bank, which had recently failed and there, on this very site, the bank has remained ever since.
By 1812, we find Richard Stanley as the ‘Chief Acting Partner’, a position he occupied until his death in 1835.
The bank was renamed Walkers and Stanley Bank in 1829 when Vincent Eyre’s son retired. In that year the bank’s capital was increased to the then huge sum of £100,000 and Richard Stanley’s salary was set at a princely £500, together with free accommodation in the bank.
The costs of the Napoleonic Wars were devastating, and economic conditions continued to worsen. In 1825-26 the Bank of England itself very nearly went bankrupt. The banking system, based entirely on partnerships, was unable to cope, and the crisis led directly to the Joint Stock Banking Act. Walkers and Stanley Bank duly decided to convert itself from a partnership. And so, on 1st July 1836, the bank was transformed into ‘The Sheffield and Rotherham Bank’ in the vast sum, then, of £600,000.
A Victorian Stockbroker
Richard Stanley died on 24th July 1835, just before the bank was incorporated. He was succeeded at once by his son Charles. Charles Stanley was born in 1814, the year before Waterloo. That year witnessed a spectacular Stock Exchange fraud; handbills were circulated announcing the death of Napoleon, causing widespread chaos in the market. The perpetrator, Charles de Berenger, made a substantial profit before he was finally tracked down.
Charles Stanley was just 21 when he became a partner in the bank. It was a challenging period. The country was in the grip of the greatest explosion of capital investment it has ever experienced - the ‘Railway Mania’. Banks lent funds on an unprecedented scale for their customers to buy railway shares. They were sold in huge numbers at ‘enthusiasm meetings’ in towns and villages, often
on rigged allotments, and often on false prospectuses.
Out of this maelstrom came our great railway network. Promoters sought London stockbrokers to give respectability to their issues, and for a period the interests of banks and London brokers became intertwined.
Charles Stanley spent increasing time in London, handling the bank’s investment affairs and also
supervising the bullion movements between London and Sheffield - gold was stored at the Bank of England but could be drawn on demand by the customers. Stock Exchange Membership records of the time were fluid, and so were the qualifications; but by 1852 Charles Stanley appears as a Member in his own right.
The greater part of the business continued to be for the bank and its customers; it is impossible to date the transition from banker to broker. Probably in Charles Stanley’s mind he always remained a banker. And throughout his career he continued to handle the bank’s bullion shipments.
The first offices were at 31 Throgmorton Street. He was joined there, three or four years later, by his first partner, Alexander Grant, and the surviving records suggest that an increasing proportion of business came now from nonbank sources. By the 1860s the partnership was dealing for a range of other banks, including Barclays, Bevan & Co. and Childs Bank; and the ledgers show a great kaleidoscope of gentlefolk who might have sprung from the pages of Jane Austen. The stockbroking business was well set on its future course.
A Family Business
In due time Charles Stanley brought both his 21-year old sons into the business: Charles Herbert in 1873 and Arthur John in 1874. At this point the firm was re-titled Charles Stanley and Sons, as it remained for more than fifty years.
The 1880s were a period of rapid development. The City of Glasgow Bank had collapsed in 1878, leaving, it was said, two hundred spinsters with an average investment of £240 each, to have to find £6,610 apiece. The scandal was addressed by the 1879 Companies Act which introduced limited liability. In 1884 the Stock Exchange was rebuilt as the great marble temple known as ‘Gorgonzola Hall’ - the pillars were tinged with green. Capital poured outwards to the Empire and beyond.
Records of the period show the international diversity of investment, reflecting the unchallenged position of London as the world’s financial centre.
True, New York was expanding at a faster rate, spurred on by the Civil War, the westward advance of the frontier and rapid industrialisation, but still it was overshadowed by London. The Stanleys themselves travelled - the firm’s archives include Charles Herbert Stanley’s passport of 1874, stamped with a German visa.
Orders flowed in by telegram and then telephone. Typewriting machines were installed (operated exclusively by men) and letters were copied by the laborious ‘wet cloth’ process. By the 1870s Charles Stanley was acting for a great range of banks - Backhouses in Darlington, Gurneys in Norwich, and above all, Barclays in Lombard Street, where, according to popular legend, he was their very first customer. By the 1890s we can be sure that he was acting for the forerunners of the National Westminster Bank. But always it is the Sheffield Bank, and its branches throughout the north of England, which appear and reappear in the records of the time.
On 3rd November 1886 the firm registered its telegraphic address as ‘Chastons’ - said to be the first telegraphic address ever filed. The original 1886 registration card is still held in the Post Office records. Not only were all telegrams to be delivered by hand, but a particular telegram boy was responsible for delivering them personally. They were to be brought to the office, by now at No 36 Cornhill, or to Stand No. 8 in the Stock Exchange, when the market was open. And complex secret codes were devised to convey dealing instructions in the most elaborate detail.