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The Rise of the House of Goldsmid

British Isles Genealogy | Chapters From the Family Chest

     The Goldsmids, whose head and representative enjoys a baronetcy in England and the dignity of a baron in Portugal, may well form in this series a companion picture to the stories of the rise of the Rothschilds, Thellussons, and Barings.* Little is known of their early history except that they came from Cassel, in Germany, and that in all probability they derived their name from the branch of trade which they followed at a time when a goldsmith and a banker were pretty nearly one and the same thing. 
     We are told that Aaron, the second son of Benedict Goldsmid, of Hamburg, settled in Leman Street, Goodman's Fields, near Whitechapel Church, as a merchant, in the early part of the last century. His son George was the father of two sons, Abraham and Benjamin Goldsmid, who, by their splendid capacities for business, strict integrity, and singular good fortune, succeeded in raising their firm from competitive obscurity to be the head and front of Change Alley. At an early period of life these brothers kept a broker's shop in Goodman’s Fields, where their promptitude and honorable dealings soon gained them a considerable amount of credit. This success encouraged them to enlarge their sphere of operations. Accordingly, in 1792 they set up as stockbrokers and money-lenders in Capel Court. Here they made the acquaintance of Mr. Abraham Newland, the chief cashier of the Bank of England, whose name, appearing as it did at the bottom of the national paper currency for more than half a century, was for a long time almost a household word in this country.
     Inspired with a liking for the two brothers, Mr. Newland made them his financial agents, and through him they speedily attained the summit of stock broking activity. Thus taken in hand by the 'great man,' and with the aid of their talents, prudence, and foresight, the success of the Goldsmids was rapid. In 1801 they became for the first time competitors for a portion of the Government loan of five millions, a speculation which proved so lucrative that at the next loan they were enabled to treble their former subscription. They were the first members of the Stock Exchange who competed with the bankers for the favors of the Chancellor of the Exchequer, and succeed in diverting into more legitimate sources the profits hitherto absorbed by the bankers. In the course of five years the brothers had amassed a fortune variously estimated from £600,000 t' £800,000. Naturally fond of show and society, and possessed of great benevolence of character, they spent their money freely. No sordid parsimony was theirs.  ‘The daily paper,’ writes Francis, in his ‘Characters of the Stock Exchange,' 'bore almost daily testimony to their uniform and boundless generosity. Naturally open-handed, the poor of all classes found in them kindly benefactors. On one day the grand doings at an entertainment to royalty were recorded; and on the next a few words related a visit of mercy to a condemned cell.
     At another, mansions vying in architectural beauty with those of our nobility were described; and, again, some gracious act of charity was dwelt upon. Banquets to princes and ambassadors reviving the glories of the Arabian Nights were frequent, and galleries with works of art worthy of the magnificence of the Medici graced their houses.' They were awhile fortune's child and especial favorites. When in 1793 almost every mercantile house in England experienced the baneful effects of the well-nigh unprecedented number of bankruptcies, and when the bank in one day discounted £4,400,000, their loss amounted but to fifty pounds. One year they gained two sweepstakes by naming the thousand in which the first and last ticket in the lottery happened to be drawn, together with several other prizes in subsequent lotteries.
     But this career of splendid prosperity was cut short in the most melancholy manner. On the morning of April 12th, 1808, the valet of Mr. Benjamin Goldsmid, the younger of the two brothers, on entering his master's room, found him hanging suspended from a cord attached to the tester of the bed. It having been brought forward in evidence that for some time previously he had been laboring under depression of spirits, the jury brought in a verdict of lunacy. Mr. Abraham Goldsmid, it is said, felt the loss if his brother so severely that he never recovered d from the shock; and so intimate had been the relations existing between the two members of the house of Goldsmid, that the firm, reduced to one partner, was unable to do its accustomed work. Hitherto invariably successful in all its undertakings, it now became the reverse. Soon calamity after calamity overtook the surviving partner, until, driven to desperation, he staked the remainder of his fortune, formerly amounting to about eight millions, in one transaction. Mr. Goldsmid was a joint contractor for the loan of fourteen millions with the house of Sir Francis Baring; but, Sir Francis dying, the support of the market was left to his companion. Taking the largest possible range, that he had dealt amongst his friends one half the sum allotted to him, the loss sustained by the remainder at sixty-five per thousand was a strain which no individual fortune could sustain. About the middle of September, Abraham Goldsmid's loss amounted to about two hundred and fifty thousand pounds, and still the prices kept sinking lower and lower. Towards the end of the month, the ' Omnium' had fallen to 6 1/2 per cent. Ever since the decline of Omnium from par, Abraham Goldsmid's spirits drooped progressively; but when it reached five and six per cent. discount, beyond all probability of ultimate recovery, the unfortunate gentleman became restless and disturbed in his mind. His transactions with the East Indian Company also increased his embarrassments. The aid granted to them by Parliament was advanced in exchequer bills, which were put into Mr. Goldsmid's hands to negotiate. Of the five hundred thousand pounds which they advanced, the Company had received one hundred and fifty thousand pounds, and they had announced to Mr. Goldsmid that they would want the remainder on the 1st of October. For that sum they held Omnium as security. On Thursday, 29th of September, while on 'Change, the sadly harassed man, it seems, betrayed more than his usual impatience and irritability,’ and spoke very incoherently of the revenge he promised himself in the punishment of the two parties opposed to him in the money-market. In the evening he received some friends at his house at Morden, in Surrey, and even joined them in a game of cards. About half-past seven on the following morning, be was seen passing over the bridge which led to a part of the shrubbery called the Wilderness, in the grounds at the back part of the house; suddenly a pistol shot was heard, and he was discovered shortly afterwards lying mortally wounded. In spite of everything that medical aid could do, he expired about ten o'clock, surrounded by his sorrowing family. As soon as intelligence of the dreadful event reached the City, it created a sensation unparalleled by the loss of any single individual. 'Expresses were sent with the news to the King and the Prince of Wales; Consols fell in a few minutes from 66 1/2 to 66 3/4, and Omnium declined from about 6 1/2 to about 10 1/4 discount, and remained steady at that price for some time; the jobbers of Capel Court crowded in anxious inquiry; the merchants of the Exchange assembled before their usual time; the thoroughfares resounded with rapid questions and hurried replies, and little or no business was done; and it is said the great question of peace and war never created a similar confusion.'  'A hundred fortunes,' writes the late Mr. Frederick Martin, 'went to pieces under the fall of the most trusted pillar of the Stock Exchange.'
     The jury recorded the usual verdict, and the remains of the deceased were interred in the Jews' burial ground at Mile End. The funeral procession was followed to the place of interment by a number of poor persons, who, having partaken of Mr. Goldsmid's charity in his lifetime, wished to honor him in death, their moans and sobs attesting the sincerity of their sorrow. The high priest and the elders of the synagogue who were present paid every distinction in their power to the remains of their departed friend, but, in accordance with the Mosaic law, they withheld from him their customary funeral rites, and he was buried without the pale of consecrated ground.
     It is said of Mr. Abraham Goldsmid, as of his brother Benjamin, that a man more truly amiable in all the social relations of life never existed. His general philanthropy, his ready munificence, his friendly demeanor, his mild and conciliatory manner, made him beloved and esteemed by a large circle of friends, and by the commercial public at large. He was the promoter of all charitable institutions, and there were not many men who ever performed kind acts in social life, or more liberal ones in what may be termed his public one, than Mr. Abraham Goldsmid.
     'It is stated,' says Francis, 'that, noticing a great depression in the waiter who usually attended him while he dined, he inquired the cause, ascertained that it was pecuniary, gave the astonished man double the amount he required, and refused to listen to the thanks of the recipient.'
     Another story is extant to the same purport. He became acquainted, by accident, with one of those simple and single-minded country curates whose poverty was the disgrace and whose piety was the glory of the Church of England. This was the man for Abraham Goldsmid at once to appreciate and to benefit. He obtained all necessary particulars of his case, and in a few weeks the parson received a letter which told him that he had been allotted a share in a new loan. The letter was a mystery to the country clergyman, who placed it on one side with a confused idea that a hoax was intended. He had not long to wait. The next day brought a second letter, and with it comfort and consolation in the shape of a large sum of money, which had been received on the allotment.
     Mr. Goldsmid, before the committal of his last desperate act, had determined, if possible, to fulfill all his contracts at the Stock Exchange, hoping still to have a competency left to retire with into private life from the wreck of his fortune. With this end in view, he had already commenced retrenchments by discharging all the workmen and out-door laborers employed on his extensive premises at Morden.
     An investigation having been made into the affairs of the deceased and his partner, Mr. Moxon, by desire of the Government, it appeared that the house of Goldsmid and Company had originally retained to themselves £800,000 of the loan, £600,000 of the English and £200,000 of the Irish. The purchases, of Omnium since, in order to sustain it, had alone occasioned the difficulties which, in a moment of frenzy, led to the sad act. The amount of the purchased Omnium was not stated; but it was positively asserted by those who had looked into the affairs of the house, that there would be a considerable surplus for the family of the deceased after fulfilling all engagements of the firm, provided the holders of the Omnium (as security for the money advanced) did not imprudently bring it to the market in a hurry, but retained it till there was a public demand for it. The account between the Treasury and Mr. Goldsmid was completely balanced, so that no interruptions occurred to prevent the winding-up of his affairs. Mr. Isaac Lyon Goldsmid, nephew of the celebrated brothers Abraham and Benjamin Goldsmid, was created a baronet in 1841. He was also made Baron de Goldsmid and de Palmeira in Portugal---titles conferred upon him by the Queen of Portugal in recognition of the important services rendered by him to her country, and further was authorized to wear his Portuguese honors in England. His son and his grandson have held seats in the House of Commons, and they own the noble estate of Somerhill, near Tunbridge, which the second baronet purchased from the Alexanders about forty years ago.

* See 'Tales of Great Families.'

Chapters From the Family Chests, 1887

Chapters From the Family Chest

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