This bank began life in 1770, as the London Exchange Banking Company, in London’s West End. The principal founding partner was Robert Herries. Born in Dumfriesshire, Herries moved to the Netherlands as a young man, where he joined well-known Amsterdam bankers, Hope & Co. He went on to set up his first business, in Spain, at the age of just 23.
Herries was soon recruited by the Coutts family of bankers. In 1763, he was appointed head of their London-based commission and exchange business. He was keen to implement his idea of the 'circular note', an early type of traveller’s cheque. Coutts, however, showed no interest, so Herries set up his own business. The firm became Herries, Farquhar & Co. in 1797.
Invention of the Traveller’s Cheque
The idea of supplying British travellers with money whilst abroad came to Herries during his own extensive travels through Europe. He understood first-hand that obtaining money when travelling could be time-consuming and expensive. In setting up his scheme, Herries employed the network of Continental connections the firm had developed through its mercantile business. Circular notes could soon be cashed in more than 100 cities, a number that increased as the idea became more popular.
Herries, Farquhar & Co. thrived in an age when the aristocracy viewed the Grand Tour as a rite of passage for their sons. So successful was the circular note that other banks were quickly obliged to offer the same service. Conversely, Herries was quick to see the potential for expanding into more conventional banking. Customers purchasing large amounts of circular notes welcomed the convenience of conducting all their financial business under one roof.
The bank's links with the aristocracy were forged by its West End location, and strengthened by its services for travellers. These generated a large proportion of its business throughout the 19th century. During the Napoleonic Wars, the firm expanded further, through the marketing of British government securities. Once the Wars were over, Herries, Farquhar & Co. became one of the first companies to engage in lending abroad, purchasing large amounts of French government bonds. In 1865, it acquired another private bank, Call, Marten & Co. From this point on, it was one the leading financers of the aristocracy and gentry.
Although highly successful, the firm remained relatively small. As a result, it was not best equipped to survive at a time when banks were becoming larger and fewer in number. Small private concerns were increasingly taken over by their bigger competitors. Herries, Farquhar & Co. was no exception. It was acquired by Lloyds in 1893.