Sir Francis Baring, 1st Baronet (18 April 1740 – 11 September 1810) was a British merchant, banker and politician. A member of the Baring family, he became the first of the Baring baronets.
Early life
He was born at Larkbeare House near Exeter, son of Johann Baring (1697–1748), a German cloth merchant who had settled in England, by his English wife Elizabeth Vowler (1702–1766), daughter of a prosperous Exeter dry goods wholesaler (at that time called a grocer).
Baring's father emigrated from Bremen, Germany, in 1717 and settled at Exeter, where he became a leading wool manufacturer and textile merchant. His premature death in 1748 resulted in Francis, aged eight, being brought up and strongly influenced by his mother, Elizabeth. Her sound business head nearly doubled the family's worth by the time of her death in 1766.
In the early 1750s, Francis was sent to London for education at Mr Fargue's French school at Hoxton and then at Mr Fuller's academy in Lothbury. Samuel Touchet, one of the leading Manchester and West Indian merchants in London, accepted him in 1755 for a seven-year apprenticeship, charging his mother £800. Upon his release on Christmas Day 1762, he joined his two surviving brothers in the interlocking partnerships of John and Francis Baring & Co. of London and John and Charles Baring & Co. of Exeter. Francis led the London concern and Charles the Exeter one, while John, a leading Exeter citizen and a Member of Parliament from 1776, was mainly a silent partner, although nominally senior partner of both firms.
By 1807 the brothers had evolved the business into Baring Brothers & Co. Despite being partially deaf from an early age, Francis did very well and, by the mid-1790s, had the full confidence of the British Parliament.
John and Francis Baring Company Initially, the London business comprised the accounts and goodwill transferred to it from an old family friend, Nathaniel Paice, a London merchant who was retiring, but also much business came from John and Charles Baring & Co. and other Exeter merchants who required a London agent. Agency services for overseas merchants and trading speculations were soon added. But the firm lost money in eight of its first fourteen years, as Francis Baring learned how to judge markets; having started out with £10,000 he reckoned that by 1777 his net worth stood at just £2,500.
Notwithstanding these private reverses, the City of London quickly recognized Baring's special qualities and in 1771 the Royal Exchange Assurance, a giant public business, appointed him to its court. He underpinned his directorship, which continued until 1780, with a holding of £820 in the company's stock, no mean sum when his assets totalled £13,000. This appointment was important to hold; for the first time he was marked out from the throng of merchants populating the courts and alleys of the city.
Independence from Exeter Baring's early business was constrained through the demands placed upon it by the much larger Exeter firm, which suffered under Charles Baring's speculations of a "wild, strange, incoherent description".Barings archives, Northbrook MSS, D1. The resulting conflict was only resolved in early 1777, when Baring took the initiative in dissolving the interlocking partnerships. Capital and management were now entirely separate, though Francis maintained strong family links with Exeter. Regularly he employed his wealth to rescue Charles from ruin and thus preserve the good name of his family; his motivation was an intense desire to see business and family prosper. Thus he was scandalized by Charles's "almost monstrous management of the original and chief dependence of the Baring family".Barings archives, Northbrook MSS, D7.
Baring's brother John remained a sleeping partner until his retirement in late 1800. In 1781 two nominal partners were appointed, J. F. Mesturas, formerly a clerk, and Charles Wall, who in September 1790 married Baring's eldest daughter, Harriet. The two nominees were soon afterwards promoted full partners. However, Mesturas withdrew in 1795 and was not replaced. From 1777 until his retirement in 1804, Baring led the firm almost singlehandedly, for many years having Wall (died 1815) as his sole active partner.
Financial success The partnership capital grew steadily from £20,000 in 1777 to £70,000 in 1790. The next decade was to prove very profitable, thanks to the fall of Amsterdam and the rise of London as centre of shipping trade, thanks to the French wartime bans on shipping in Amsterdam. Partnership capital peaked at £400,000 in 1804. Baring contributed the major share, providing 12% in 1777, 40% in 1790, and 54% in 1804.
Annual profits rose to £40,000 in the 1790s and peaked, atypically, at over £200,000 in 1802; they were calculated after payment to partners at 4% interest, sometimes 5%, on their capital. Baring's share of the profits increased steadily from a quarter in the mid-1760s to a half from 1777 and to three-quarters from 1801. His total wealth, business as well as private, rose accordingly, from almost £5,000 in 1763, to £64,000 in 1790, and to £500,000 in 1804.
Network Early on Baring's business profits were derived mostly from international trade, especially between Britain, the western European coast, the Iberian peninsula, Italy, the West Indies, and, from the 1770s, North America. They arose from trading on sole account or, more often, on joint account with other merchants; from acting as London agent for overseas merchants, buying and selling consignments, making and collecting payments, and arranging shipping and warehousing; and, in due course, from trade finance through making advances or, more frequently, accepting bills of exchange.
In the West Indies, Baring had major financial interests in sugar and slavery. It is said he made his fortune from the slave trade while only 16 years old. With the income he generated from these ventures, Baring bought Manor House in 1796.
The success of this work was greatly influenced by the establishment of a powerful network of corresponding houses in the main international trading centres. These alliances with leading European and North American merchants were the keys to his success.
Hope & Co. of Amsterdam, the most powerful merchant bank in Europe's leading financial centre, was Baring's most valuable connection. Their association is said to have begun in the 1760s, when Henry Hope passed Baring some bills to negotiate and ended up "exceedingly struck with the transaction which bespoke not only great zeal and activity, but what was still more important ... either good credit or great resources ... From that day Baring became one of their principal friends".Barings archives, DEP249. The link was consolidated in other ways, in particular through the marriage in 1796 of Pierre César Labouchère [see under Hope family], a leading figure at Hopes, to Baring's third daughter, Dorothy.
Vital connections were also established on the other side of the Atlantic. Baring was quicker than most to see the commercial potential of Britain's North American colonies, and his finance house quickly emerged as the European hub of a network of North America's most powerful merchants. In 1774 his first American customer was the leading Philadelphia merchant, Willing, Morris & Co.; its influential partners included Robert Morris, a future financial architect of American independence from Britain, and Thomas Willing, a future president of the Bank of the United States. Through them Baring was introduced to Senator William Bingham, one of America's wealthiest men, a connection which gave rise to several lucrative transactions.
Government adviser
Baring's work from 1782 as an adviser on commercial matters to cabinet ministers propelled him from relative obscurity to the inner circles of British political life, underlining how his influence had grown. The catalyst for this advancement was his Devon connections. His brother John was elected to parliament as a member for Exeter in 1776; more importantly, in 1780 his sister, Elizabeth, married another MP and fellow Devonian, John Dunning.
A rich and influential lawyer, Dunning was allied to Lord Shelburne, a powerful Whig politician who held progressive views on political economy and whose borough of Calne Dunning represented in Parliament. In July 1782, following Shelburne's promotion to Prime Minister and Dunning's appointment as Chancellor of the Duchy of Lancaster, Baring fulfilled the new Prime Minister's need "to have recourse from time to time to mercantile advice".Barings archives, Northbrook MSS, B1. Baring, by instinct a Whig, became Shelburne's confidential adviser on commerce, or his "handy City man", according to a discontented William Cobbett. Baring's ideas on political economy and commerce were well ahead of his time; in 1799 he defended the Bank of England's decision (in 1797) to suspend specie payments as both correct and inevitable, in the face of hostile opposition from many of his peers.
Baring's knowledge of North American merchants and trade made him especially useful in the closing years of the American War of Independence when Shelburne, anxious for a liberal settlement, invited his comments on commercial aspects of the proposed peace treaty with the United States. Shelburne introduced Baring to Isaac Barré, his paymaster-general, and to such leading luminaries as William Pitt the Younger, Henry Dundas, Jeremy Bentham, Edmund Burke, Sir Samuel Romilly, and Lords Erskine, Camden and Sydney. However, Baring's friendship with Lord Lansdowne (as Shelburne became in 1784), Dunning, and Barré ran particularly deep, and in 1787 he drew public attention to it by commissioning their triple portrait from Sir Joshua Reynolds. A private financial connection also existed. For six years from 1783 Baring loaned Lansdowne £5,000, on security of a debt owing to Lansdowne. In 1805, on Lansdowne's death, Baring became a trustee of his estate, charged with the task of liquidating debts of £90,000.
Baring was not nearly as close to the Tory leader William Pitt, who followed Lansdowne as Prime Minister and who held office almost continuously until Baring's retirement from active business. Their views were far apart, and on Pitt's death Baring was quick to stress their lack of concurrence "on any great political question for above 20 years, our political opinions and principles being different".The Times, 6 February 1806. In particular he disagreed with Pitt's policy for the seemingly endless continuation of a wasteful war; they also suffered differences over government policy towards the East India Company. Baring's personal influence in government waned but his expert advice, always fairly delivered, continued to be provided on such matters as trade with Turkey, the importance of Gibraltar, and the funding of the national debt. As part of Pitt's cleansing of abuse from public office, in 1784 he appointed Baring a commissioner charged with investigating fees, gratuities, and prerequisites for holding certain offices.
The link with Lansdowne led Baring to the Commons in 1784 when, at a cost of £3,000, he was elected MP for Grampound, Cornwall. He was ousted six years later, after which he stood unsuccessfully for Ilchester. Later he sat for Lansdowne's safe boroughs of Chipping Wycombe, Buckinghamshire (1794–6 and 1802–6), and Calne, Wiltshire (1796–1802), which had formerly been represented by other Lansdowne favourites, Dunning and Barré. Notwithstanding his admission that "my voice is so very unequal to the House of Commons",Barings archives, Northbrook MSS, N4.4.295. his speeches were reckoned to be "neat, flowing and perspicuous, aiming more by solidity of argument to arrest and convince his hearers, than by beautiful figures and impassioned eloquence to mislead the minds of men".Daily Advertiser, Oracle and True Briton, 12 October 1805.