Exhibitions Agents in Argentina

Today we live in a very well connected world. We have incredible inventions like phones, planes, the internet and social media to help us keep connected across continents. Yet even with all these tools at our fingertips, we can still experience culture shock.

Imagine living in the 19th century and being posted abroad for work. You may have never been abroad before, you would often have to travel for months by sea to reach far flung locations, with only the odd delayed letter to remind you of home when you reached land. You are expected to learn a new language, make new friends, adapt to different climates and social customs. All the while carrying out a new job with much less guidance than you are used to.

Imagine how you would feel. Nervous, excited, homesick, lonely? 

All of these emotions and more were experienced by Arthur Bowden Smith when Barings sent him to act as their agent in Argentina in November of 1890.

Read on to find out more about his time in Buenos Aires. What was Argentina like in the 19th century? Why was Barings doing business there and what were the knock on effects for both the bank and the country?

Take a closer look at the obstacles Arthur Bowden Smith faced through his fascinating correspondence and very personal writing style, as he shares his trials and tribulations and his personal thoughts and feelings.

Baring Brothers was a merchant bank from its creation in 1762; interested in affairs and economies from all over the world.

It was especially invested in emerging economies of fledgling nations, leading to their involvement in deals like the Louisiana Purchase in 1804, which effectively doubled the size of the United States of America at the time.

As communications could be slow and unreliable, Barings needed trusted agents stationed in areas they were looking to do business in.

The main tasks of agents were to select individuals and houses Barings could do business with, assess their credit-worthiness, gauge their honesty, and secure information on their finances. They also reported back to the London house on local political trends, current affairs, the economy, projected government infrastructure projects and the countries themselves.

Barings had a long history of both excellent and catastrophic investments in Argentina. Other areas of South America were dominated by rival houses, like Rothschilds but Barings had always enjoyed a special relationship with Buenos Aires and Argentina.

Argentina itself enjoyed immense natural wealth, which proved to be a pull for investors. Additionally, given that the political and economic situation was considered potentially unstable, profits could be greater than those in more stable regions. Of course, this also meant that the potential losses were equally as great.

The Argentinian economy grew increasingly stronger from the 1880s and British investors in joint-stock enterprises were hungry to get involved, investing nearly £150 million by 1890. A large proportion of this inflow came through Barings.

Troubled Waters

Much of Barings' business in Argentina proved to be sound. However, in the latter half of the century an enormous amount was invested in and with the questionable Trading House of Samuel B Hale & Co and the Buenos Aires Drainage and Waterworks Company. The shares issued by the syndicate of banks set up by Barings proved increasingly unattractive to a reluctant British public in the late 1880s, as it became clear that the partners had misjudged the economic and political stability of Argentina.

The situation worsened as it became evident that the Buenos Ayres Water Supply & Drainage Co had underestimated the infrastructure needed for such a large project and overestimated the willingness of citizens to pay for running water. By October 1890, customers owed arrears of $1.65 million but the company still had to make interest payments to Bondholders. Barings themselves had to maintain installment payments to the Argentine government but couldn't risk offering them to the hesitant general public. Of the £2million ordinary shares allotted, about £1.85million remained a huge weight around Barings' neck.

Compounded by political crisis and revolution in Argentina, repayments for these loans proved unmanageable, which brought Barings and Buenos Aires to crisis point in October of 1890.

The Baring Crisis and Panic of 1890

By November 1890, an investigation into Barings' finances was launched to find out whether they had assets sufficient to meet their liabilities if given time to realise them. Despite needing at least £8million to top up their liquid assets, the answer was positive. A consortium of banks was organised in London to guarantee Barings' debts and prevent other London houses from falling with them.

The fallout however, was all encompassing. The partners resigned and the company itself was reconstituted as the Baring Brothers Ltd. Argentina went through an acute recession known as the Panic of 1890, with its real GDP falling by 11% between 1890 and 1891.

The effect on the Buenos Aires stock market was also far reaching and impacted Barings in other ways. For example, the Baring Archive holds extensive records on the Curamalan Land Co, which was a vast Argentinian estate of 600,000 acres. Barings initially issued its mortgage bonds in London but mismanagement of the funds and economic crisis in Argentina led to the company defaulting on their payments in November 1890. The mortgage was finally redeemed in 1905. The land however, was not fully sold off until 1929.

Incredibly, the rippling effect of Barings' Argentine investments leading up to 1890 was still being felt 40 years after the event.

The correspondence held by the Baring Archive on Argentina provides a window into the country's developments and historical events through the eyes of the agents in Buenos Aires. The letters contain a wealth of information about the politics and economics of the period but what can often be overlooked is the agents themselves.

Barings' agents lived through and reported on current events, as well as their own trials and tribulations. Many had never been abroad before and found unexpected difficulties in working in a foreign country so remote from their homeland.

When looking through the archive, it becomes evident that correspondence with “Need not be copied” scrawled across the top or sections of the text crossed out in blue, are likely to contain something personal that was intended to be left out of the official narrative. Luckily, these found their way into the archive and their stories are preserved so that we can get to know not only the political, financial and economic pressures at the time but also the men behind the title of Barings’ Agent in Buenos Aires.

Arthur Bowden Smith

The remainder of this exhibition focuses on Arthur Bowden Smith, who came to Argentina in 1890 at one of the most difficult times in both the firm's and the country's history. He is particularly open about his feelings whilst on assignment, giving us a fascinating insight into the man and his work.

Arthur Bowden Smith was 30 years old when he was sent to Buenos Aires as Baring’s agent for the region in November 1890. He had previously been a confidential clerk at the London office but was now trusted with the monumental task of monitoring and sorting out the mounting crisis in Argentina.

He was given power of attorney to effect the immediate transfer to Barings of properties belonging to Samuel B Hale & Co as security against their uncovered credits with Barings. He was also charged with making contacts in the region and reporting on the economic and political situation.

However, looking at the correspondence, it becomes evident that Arthur struggled with these tasks for a number of reasons. These include:

• The emotional upheaval of moving so far from any familiar professional and personal support networks
• His lack of self-confidence
• Difficulties communicating, including discovering relevant information, relaying it to the London office and working with difficult personalities
• Navigating the politics in the region

Throughout his correspondence, Arthur seems eager to please the directors but cripplingly unsure of himself and prone to wearing his heart on his sleeve.

These are two quotes from a letter he sent to Barings just before he left the UK on his month long voyage to Buenos Aires. -

“I will do my best to deserve and be worthy of the implicit trust and great kindness shown to me and which I shall realise more and more when I have time to think.”

The reverse of the letter reads:

“I must apologise for rushing so abruptly out of the room this morning when saying ‘Goodbye’ but I felt that I was breaking down, which might have been unpleasant for all parties.”

The tone and content of Arthur's letters suggests a high degree of familiarity with the directors at the time, John, Francis Henry and Thomas Charles Baring.

How did Arthur make these contacts? Towards the end of his mission, he states that he is from “a large family without prospect” and through UK censuses, we found that he was one of twelve children born within 16 years of each other. Given how business was conducted in the 19th century, a possibility of an introduction to a firm like Barings would have been relatively remote, so how did it come about?

There are two tantalising possibilities.

A census taken when Arthur was only one year old shows a visitor to the household, Mr C H Sanford. Mr Sanford went on to become the director of Samuel B Hale & Co in Buenos Aires. Perhaps Sanford could have introduced Arthur to the Barings?

Another possibility is through Arthur’s father, Reverend Philip Bowden Smith. He worked at Rugby School from 1852 as a Modern Languages Professor and Housemaster. Although Arthur did not attend Rugby himself, many of the Baring children did, including Francis Henry Baring, who went on to become one of the three Directors at Barings whilst Arthur was on assignment. It’s plausible that this could be the source of Arthur’s connection to the Barings but we are unlikely to ever know for sure.

He seems to share the strongest connection with John Baring and allusions to additional personal letters between the two are common in Arthur's letters to Barings in London.

Arthur is often unsure of himself and anxious about deciding next steps, which is reflected in his writing. He is incredibly familiar with the partners and open about his feelings, which means that he has more information omitted from the official narrative than any other agent we have come across.

On 3rd January 1891 he writes:

“As you know, I have not been accustomed to act except under instructions and then only at details so that I feel at a loss to know what to do next that may be of use to you; and it seems wrong to be doing nothing here but taking Spanish lessons while living at your expense.

We as a family owe you so much that as long as you think it worthwhile to keep me here, my father and mother will not mind my saying I will stay and do what I can for you to the best of my ability; but I should like to hear as fully as possible what you wish and how I should act and also how long you think you will wish me to remain.

Please excuse my troubling you but at present I feel in a false position.”

By 21 January 1891 he is already asking when he can come home. “I should be glad to hear at the earliest opportunity that I may come home, as it does not seem as if I could be of any use here.” [HC 4.1.117.22]

By the 12 February of the same year, Arthur's personal and professional difficulties have reached crisis point.

He writes a heart breaking letter back to the firm that is full of self-doubt, not only about his ability to carry out his mission but also his conversational skills and ability to make contacts.

“It is evident to me and must be by this time to you, that I am a failure here and ought never to have come out. My letter of 21 January will reach you about this time and from it you will see that even the mortgage is not what you wished done.

There is no doubt about it that I am a perfect fool in business and have not the tact or confidence necessary to extract any information that may be useful. All the information I have comes through Hale’s as I do not possess any power of conversation and cannot make friends easily or talk to people whom I do not know.”

He goes on to say:

“I cannot honestly say that I am or have been at all happy here… The feeling that I am a failure and may have done you more harm than good is so depressing, especially after the kindness shown to me by you particularly in selecting me for such a post of trust.” 12th February 1891

After this emotional outpouring. Arthur agreed to remain until a replacement could be found but his old insecurities had not disappeared.

“I cannot talk business and don’t seem to have made many friends since I have been here. Hale’s never tell me anything and Bouwer does not talk to me on business, so it seems that I have not learnt much since I came. Before I went down to Curamalan I gave up Spanish lessons but must take them again now to have something to do.” 21 March 1891 [HC 4.1.117.36]

By April, Arthur has realised that when he wrote his letter in February, Francis Baring had been seriously ill with scarlet fever and Thomas Charles Baring had passed away, both of whom were Directors.

“I was very sorry… to find that I had troubled you with a letter at such a time and am only writing now to say that having something to do now and more friends in the place, I shall not write like that again for I was utterly homesick and miserable.” 15th April 1891

Arthur keeps his promise and actively starts to make the best of his time in Buenos Aires. True to his word, he no longer mentions his desire to return home in his letters, but this unfortunately proves to be to his detriment in later months.

As we shall see, despite beginning to address his insecurities, several other factors continue to inhibit his progress in Buenos Aires.

Arthur also encounters issues with communicating effectively with the London House and his contacts in Buenos Aires. He struggles with the confidence and social skills necessary to proactively make his own friends and contacts, which is exacerbated by his difficulty learning Spanish. There are also several characters and firms that are very difficult to work with and at times seem to deliberately withhold information.

One such character is Barings' former Buenos Aires Agent, Nicolas Bouwer. He introduced Barings to Samuel B Hale & Co in 1876 and encouraged them to make a series of business decisions that led to the 1890 crisis. Dismissed from Barings shortly thereafter, he remained in Buenos Aires despite being replaced by Arthur and seems to have been universally disliked by those that met him.

On 5th August 1891 Arthur writes:
“Reade [a colleague in Buenos Aires] does not care much about this place either as regards business or otherwise, but he is an excellent fellow and is doing good work for you. He gets very angry with Bouwer and no wonder for he is such a shuffling cad.”

Despite the difficult characters, Arthur has a small boost in confidence by mid-1891 and begins to feel much more comfortable in his role. However, in June, he finds out that as he asked, a replacement for him is on his way, Essex Edgeworth Reade. Arthur seems to have forgotten his entreaties at the beginning of the year to return home.

“I posted a letter to my mother, saying that I had made up my mind to stay on here... I am having a very good time socially and have in the last month felt much happier at the thought that I am now in a position to do my best for you, so that it was a great shock to me to hear, after the unpleasant time I have had in gradually working my way up and asserting myself that someone else was coming to step in and get the ‘kudos’ of settling things.

In any case, I should prefer to stay on here if I can find work… It is much easier for a man to live here and he can have a very happy life. There are a great many very nice people here and I am glad to say that I can now call almost all the best of my friends.

The way people treat me now both in business matters and socially is very different to what it was a month ago and I feel I have a good position.” 26th June 1891

The day after he sent the previous letter, Arthur remembers that earlier in the year he asked Barings to recall him at the earliest possible moment and apologises for his hasty reply [HC 4.1.117.104]. The postal delay is likely to have been a factor in this miscommunication, as letters delivered by packet ships were often received up to 2 months after being written. Similarly, after hearing of T C Baring's death, in April Arthur said he would no longer speak of his homesickness so his change of heart was likely less obvious to the directors than he thought it to be [HC 4.1.117.46].

On 29 June 1891 Bowden Smith writes,

“Thank you very much for your letter… which I know you wrote thinking how relieved I should be to get it and the kindness of which, believe me, I fully appreciate… I wrote to my mother and father telling them that my position here now was better than it was ever likely to be at home, that I hoped you were satisfied with me and would continue to keep me here in your interests as I felt now well able to look after them, that after having gradually worked my way up and made so many friends, it seemed wrong to throw away what might be after all the one chance in my life…"

Further pages in the letter read: "All these friends have given me so much confidence that I seem to be treated with more respect now by Hale and am not afraid of answering Bouwer back in his own coin.”

A Female Influence?

Interestingly, one of the other key reasons for Arthur's desire to remain comes out just over a month later on 5 August 1891.

“This is first a line to tell you that I am engaged to be married, as I would rather you heard it direct than second hand. You will be able to appreciate a little more now what a shock it was to me to hear I had to return as my courage was not nearly screwed up to proposing then…

My young woman is a distinct business acquisition for me as she speaks Spanish better than English, having lived nearly all her life here.”

Perhaps not the most romantic of declarations! The woman is not named or mentioned elsewhere so she remains somewhat of a mystery.

However, his mysterious fiancee isn't the only aspect that is conspicuous by its absence in Arthur's correspondence.

The Political Situation in Argentina

Given the events occurring at the time Arthur was in Argentina, it is curious how little he mentions the political situation, as it must have been a significant factor in his difficulties to achieve his objectives.

“Bouwer says there is nothing but politics thought of just now in the Government, but no one can tell what will come of it.” 21 March 1891

It's possible that a combination of working with difficult personalities and his deep seated lack of self-confidence prevented Arthur from being in the know about politics in the region. He was certainly unable to access the higher levels of government, as Barings' agents had done before him.

It is clear he struggled with the Spanish language, which makes it likely that he got the majority of his information from the few friends he had and the English newspapers in Buenos Aires. Consequently, he struggled to build the complicated network of contacts and friendships needed to get the level of information required by the London office.

The barriers Arthur experienced during his time in Argentina, eventually led him to return home on the 5th November 1892, 2 years after being sent to Buenos Aires as Barings' agent.

This photo, taken much later in 1903, shows a more confident and self-assured Arthur. He re-joined the London Office in 1892 and rose through the ranks to become Manager of the Commercial Letter of Credit Department. He only ever left the country on business once more; to briefly assist a colleague to St Petersburg. He quickly returned home!

Despite the earlier reference to Arthur being engaged, there's no evidence that he ever married. He lived with his sister Emily in Richmond, Surrey until his death in September 1945.

The title of Barings' agent passed to Essex Edgeworth Reade in 1891. Arthur remained in Buenos Aires throughout 1892 to assist him and was able to provide the help that Arthur himself had sorely needed on his own arrival to orientate himself to a foreign land and culture. Arthur's  1891 reports on Barings' interests in Argentina also provided vital information for future courses of action and informed the decisions of Directors at home whilst he was stationed there, despite the overall lack of progress in the region. 

Despite his struggles, Arthur's posting in Argentina seemed to improve his confidence and self-esteem, teaching him communication skills that would help him throughout the rest of his career at Barings.

Reade remained as Barings' agent in Buenos Aires until 1905 but Barings' interests in the region continued right through the 20th century.