5: Barings and Russia
Barings had a longstanding relationship with Russia. The first account of a Russian client was opened at Barings in 1775. As early as 1817 Barings joined with the Amsterdam bankers Hope & Co to market small batches of Imperial Russian Government bonds in both London and Amsterdam. In the 1850s the connection became closer still when Barings was appointed the government's financial agent in London. Barings then maintained the government's London bank accounts, collecting and making payments and undertaking a wide range of other routine banking functions.
With the outbreak of war in 1914, Barings' relationship with the Russian government grew significantly more important. The government now borrowed on an unprecedented scale and in particular from its allies, the governments of Britain and France. In Britain the funds were raised through the issue of Imperial Russian Government Sterling Treasury Bills discounted at the Bank of England.
During the war Barings managed a huge volume of transactions which the Russian government entered into with foreign suppliers for the purchase of items for the army. Hundreds of thousands of instructions were received for payments for supplies such as boots, barbed wire, ammunition and motor vehicles.
Other important business included Barings' appointment in 1916 to manage the rouble-sterling exchange, which was then collapsing under the strain of wartime conditions.
Barings' relationship with Russia ended abruptly with the 1917 Revolution and was not revived for sixty years.