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Alexander Fordyce (7 August 1729-8 September 1789) was an eminent Scottish banker, centrally involved in the
bank run
A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...
on
Neale, James, Fordyce and Downe
Neale, James, Fordyce and Downe was a London banking house, established in 1757 by Henry Neale, William James, Alexander Fordyce and Richard Downe. Its collapse in June 1772 precipitated a major banking crisis which included the collapse of almos ...
which led to the
credit crisis of 1772
The British credit crisis of 1772-1773 also known as the crisis of 1772, or the panic of 1772, was a peacetime financial crisis which originated in London and then spread to Scotland and the Dutch Republic. . He used the profits from other investments to cover the losses.
Early life
Alexander was baptized in
Belhelvie as the youngest son of George Fordyce of Broadford (1663–Eggie, 1733), six times
Provost of Aberdeen who was married twice, had many children but only a few survived. He was (half)brother to
David
David (; , "beloved one") (traditional spelling), , ''Dāwūd''; grc-koi, Δαυΐδ, Dauíd; la, Davidus, David; gez , ዳዊት, ''Dawit''; xcl, Դաւիթ, ''Dawitʿ''; cu, Давíдъ, ''Davidŭ''; possibly meaning "beloved one". w ...
, Agnes,
James
James is a common English language surname and given name:
*James (name), the typically masculine first name James
* James (surname), various people with the last name James
James or James City may also refer to:
People
* King James (disambiguat ...
, and
William Fordyce. In 1746 he travelled in the
Scottish Highlands
The Highlands ( sco, the Hielands; gd, a’ Ghàidhealtachd , 'the place of the Gaels') is a historical region of Scotland. Culturally, the Highlands and the Lowlands diverged from the Late Middle Ages into the modern period, when Lowland Sco ...
. He was educated by his uncle
Thomas Blackwell, principle and lecturing
common law
In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...
at Marischal College and who became his brother-in-law in 1751. For some time he was in the
hosiery
Hosiery, also referred to as legwear, describes garments worn directly on the feet and legs. The term originated as the collective term for products of which a maker or seller is termed a hosier; and those products are also known generically as h ...
trade at Aberdeen. In 1757, he left and found a situation as outdoor clerk to a banker named Boldero & Co at
Lombard Street, London
Lombard Street () is a street notable for its connections with the City of London's merchant, banking and insurance industries, stretching back to medieval times.
From Bank junction, where nine streets converge by the Bank of England, Lombard ...
. In 1759 his brother James arrived in London and became minister of the presbyterian congregation.
In 1768 he stood as a radical candidate for the
borough of Colchester at the
general election
A general election is a political voting election where generally all or most members of a given political body are chosen. These are usually held for a nation, state, or territory's primary legislative body, and are different from by-elections ( ...
, but four people announced their endorsement in a newspaper. The
esquire
Esquire (, ; abbreviated Esq.) is usually a courtesy title.
In the United Kingdom, ''esquire'' historically was a title of respect accorded to men of higher social rank, particularly members of the landed gentry above the rank of gentlema ...
spent nearly £14,000; but was defeated by 43 votes by
Charles Gray. The interloper had spent money to build a chapel, a hospital and otherwise cultivate the borough. In June 1770, at the age of 42, he married Lady Margaret Lindsay, a 17-years-old daughter of
James Lindsay at
Balcarres House
Balcarres House lies 1km north of the village of Colinsburgh, in the East Neuk of Fife, in eastern Scotland. It is centred on a mansion built in 1595 by John Lindsay (1552–1598), second son of David, 9th Earl of Crawford. The house became the ...
(
Fife
Fife (, ; gd, Fìobha, ; sco, Fife) is a council area, historic county, registration county and lieutenancy area of Scotland. It is situated between the Firth of Tay and the Firth of Forth, with inland boundaries with Perth and Kinross (i ...
). He was appointed rector of the
Marischal College, Aberdeen
Marischal College ( ) is a large granite building on Broad Street in the centre of Aberdeen in north-east Scotland, and since 2011 has acted as the headquarters of Aberdeen City Council. However, the building was constructed for and is on long- ...
in the same year. Then Fordyce's gold watch was stolen somewhere on the highway; the robbers were executed early 1771.
Banker and speculator
![E India House](https://upload.wikimedia.org/wikipedia/commons/9/9c/E_India_House.jpg)
From 1757 he was a partner in the banking house
Neale, James, Fordyce and Downe
Neale, James, Fordyce and Downe was a London banking house, established in 1757 by Henry Neale, William James, Alexander Fordyce and Richard Downe. Its collapse in June 1772 precipitated a major banking crisis which included the collapse of almos ...
on 73
Threadneedle Street
Threadneedle Street is a street in the City of London, England, between Bishopsgate at its northeast end and Bank junction in the southwest. It is one of nine streets that converge at Bank. It lies in the ward of Cornhill.
History
The stree ...
. Under his guidance the firm speculated freely, and gained by obtaining early intelligence of the signature of the preliminaries of the
Peace of Paris in 1763. In 1764 Fordyce cooperated with
Hope & Co. bankers in Amsterdam.
East India Company
The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...
stock rose greatly in 1764–5. With the proceeds of these and other speculations in
Change Alley
Exchange Alley or Change Alley is a narrow alleyway connecting shops and coffeehouses in an old neighbourhood of the City of London. It served as a convenient shortcut from the Royal Exchange on Cornhill to the Post Office on Lombard Street a ...
Fordyce purchased an estate near Wimbledon now
Grove House, Roehampton
Grove House is a Grade II* listed house at Roehampton Lane, Roehampton, London.
It was built in 1777 by James Wyatt for Sir Joshua Vanneck, but has later alterations and additions.
It is part of Froebel College, University of Roehampton
...
, where he lived magnificently. He entered a series of fêtes, banquets and entertainment, which threw those of the royalty in the shade.
In July 1770 Fordyce collaborated with two planters John and
William Macintosh on
Grenada
Grenada ( ; Grenadian Creole French: ) is an island country in the West Indies in the Caribbean Sea at the southern end of the Grenadines island chain. Grenada consists of the island of Grenada itself, two smaller islands, Carriacou and Pe ...
and borrowed 240,000 guilders in bearer bonds from
Hope & Co. Also
Sir William Pulteney,
Samuel Hannay, Samuel Hoare (1716–1796) and
John Harman were involved. Hope had undertaken commissions for Fordyce on the
Amsterdam stock exchange
Euronext Amsterdam is a stock exchange based in Amsterdam, the Netherlands. Formerly known as the Amsterdam Stock Exchange, it merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext. The r ...
involving dealings for the account in shares of the
British East India Company
The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...
. Fordyce had been speculating successfully and managed to deceive his partners for a while; according to one biographer, "It is said he succeeded in quieting their fears by the simple expedient of showing them a pile of bank notes which he had borrowed for the purpose for a few hours."
The tide of fortune then turned; he lost heavily at the beginning of 1771 in the fluctuations of the market caused by the dispute with Spain about the
Falkland Islands
The Falkland Islands (; es, Islas Malvinas, link=no ) is an archipelago in the South Atlantic Ocean on the Patagonian Shelf. The principal islands are about east of South America's southern Patagonian coast and about from Cape Dubouzet ...
. In 1771/1772 Fordyce bet heavily against EIC share price, which went awfully awry. In May 1772 the EIC stock price rose significantly.
Financial crash and aftermath
On Monday 8 June 1772, it became clear Fordyce failed. The next day he disappeared to avoid debt repayment. His bank stopped payment on 10 June; meanwhile Fordyce absconded to France. Fordyce lost £300,000
shorting
In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional " long" position, where the investor will profit if the value of t ...
East India Company stock, leaving his partners liable for an estimated £243,000 in debts. He had speculated away the bank's
assets
In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...
and lost the backing of the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
. On 13 June - in an advertisement - he was required to surrender himself and to make a full discovery of his estates and effects.
On 12 June the news of the failure of
Neale, James, Fordyce and Downe
Neale, James, Fordyce and Downe was a London banking house, established in 1757 by Henry Neale, William James, Alexander Fordyce and Richard Downe. Its collapse in June 1772 precipitated a major banking crisis which included the collapse of almos ...
reached Scotland. After the weekend a
bank run
A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...
began on its Edinburgh branch. As this information became public within two weeks eight banks in London collapsed. According to Paul Kosmetatos "lurid tales abounded in the press for a time of merchants cutting their throats, shooting or hanging themselves". On 24 June 1772 his goods, stocks and country house were seized by
The Crown
The Crown is the state in all its aspects within the jurisprudence of the Commonwealth realms and their subdivisions (such as the Crown Dependencies, overseas territories, provinces, or states). Legally ill-defined, the term has different ...
; the whole
City of London
The City of London is a city, ceremonial county and local government district that contains the historic centre and constitutes, alongside Canary Wharf, the primary central business district (CBD) of London. It constituted most of London fr ...
was in uproar when Fordyce was declared
bankrupt
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debt ...
. Neale, James, Fordyce and Downe, the largest buyer of Scottish
bills of exchange
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
, were forced to declare
insolvency
In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...
. Also the Ayr bank collapsed on 24 June.
The stoppage precipitated a crisis.
Sir Richard Glyn and
Sir Thomas Hallifax stopped payment temporarily, and a stoppage by
Sir George Colebrooke came close. On 25 July Fordyce was given seven weeks to appear for his creditors and come to an agreement. Around 20 banks across Scotland and the Dutch Republic collapsed in the aftermath.
On request he was extradited by France and sailed from
Boulogne-sur-Mer
Boulogne-sur-Mer (; pcd, Boulonne-su-Mér; nl, Bonen; la, Gesoriacum or ''Bononia''), often called just Boulogne (, ), is a coastal city in Northern France. It is a sub-prefecture of the department of Pas-de-Calais. Boulogne lies on the ...
to
Rye, East Sussex
is a small town and civil parish in the Rother district of East Sussex, England, two miles from the sea at the confluence of three rivers: the Rother, the Tillingham and the Brede. An important member of the mediaeval Cinque Ports confederatio ...
in September. He went through an examination at the
Guildhall
A guildhall, also known as a "guild hall" or "guild house", is a historical building originally used for tax collecting by municipalities or merchants in Great Britain and the Low Countries. These buildings commonly become town halls and in som ...
and declared personal bankruptcy. His debt was about £100,000. In December he agreed a repay scheme with his creditors. His sister-in-law published the ballad
Auld Robin Gray
Auld Robin Gray is the title of a Scots ballad written by the Scottish poet Lady Anne Lindsay in 1772.
Robin Gray is a good old man who marries a young woman already in love with a man named Jamie. Jamie goes away to sea in order to earn money s ...
. In 1774 he was forced to sell his estate to
Sir Joshua Vanneck, 1st Baronet
Sir Joshua Vanneck, 1st Baronet (1702 – 6 March 1777) was a British-Dutch merchant.
Venneck was born in The Hague, the son of Cornelius Van Neck. He emigrated to Britain in 1722 and became a successful London merchant. This enabled him to pur ...
; the
plaintiffs
A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of the ...
were Hope & Co and
Hoare. A sermon by Thomas Toller, minister sharing a church with James Fordyce, published in London in 1775, describes Fordyce's fall. Fordyce was again the defeated candidate at Colchester in 1780.
[A Poll for Members of Parliament for the Borough of Colchester, on Friday 8th of September 1780. Candidates. Isaac Martin Rebow Martin, Esq. Alexander Fordyce, Esq. Robert Mayne, Esq. and Sir Robert Smyth, Bart] He died after a long illness on 8 September 1789, at Mr. Mead's in George Street, near
Portman Square
Portman Square is a garden square in Marylebone, central London, surrounded by elegant townhouses. It was specifically for private housing let on long leases having a ground rent by the Portman Estate, which owns the private communal garden ...
. His widow married in 1812
Sir James Bland Burges.
Notes
;Source
Further reading
Koudijs, Peter and Hans-Joachim Voth (2011) Optimal delay: distressed trading in 18th c. AmsterdamEnglish Bankrupts 1732–1831: A Social Account
{{DEFAULTSORT:Fordyce, Alexander
1729 births
1789 deaths
Scottish bankers
18th-century Scottish people
People from Aberdeen
Speculators