Page last updated at 15:27 GMT, Sunday, 12 April 2009 16:27 UK

How Handel played the markets

By Peter Day
BBC News

A chance discovery in a ledger at the Bank of England suggests the composer Handel may have been a smart financial operator.

George Frideric Handel
Handel's investments meant he did not need a wealthy patron

I am a bit old now for scoops, but I seem to have run into one the other day, deep behind the scenes at the Bank of England.

BBC Radio 3 asked me to take part in the extensive commemoration of the 250th anniversary of the death of the great Anglo-German composer, George Frideric Handel.

They wanted to know about Handel's money and how he made it, ending up with a fortune (maybe £3m in today's money) in financial times no less tumultuous than our own day.

Interesting, and a programme rather different from my normal output on In Business and Global Business.

For one thing, no carbon footprint was required. All the locations were within bicycling distance for me and the producer Paul Frankl. I naturally agreed.

There is, of course, a torrent of wonderful music, but really rather few recollections of Handel the person.

Born in Germany, he ended up spending most of his life in London after his employer in Hanover became George I in 1714.

And there is a tantalising suggestion by Handel's biographer, Jonathan Keates, that he may have come to London in 1710 and settled in 1712 to spy out the land for the eventual Hanoverian successor to Queen Anne.


But delved into, the money story is a fascinating one. Handel seems to have been among the very first modern musicians not to rely on patronage of court or cathedral for his main income.

Instead, he was an entrepreneurial promoter, risking his own money on operas and oratorios. His fortunes waxed and waned with the popularity of the genres and the fashions of the time.

Eventually, oratorios made him a rich man. But he also did quite a lot of investing, and some records survive of his investments in the newly emerging financial markets.

Opening page of the overture to Serse by Handel, displayed in the Handel House Museum in central London
Handel was a wizard with music notes and banknotes alike

He invested in the original South Sea Company stock in 1716, when it was still fashionable, but he appears to have got out unscathed.

His name has disappeared from the list of investors by the time the company blew up in 1720, a burst bubble caused by a frenzy of speculation on British government stock.

The fledgling Bank of England stepped in to refloat the South Sea annuities, thus supporting the credit of the government, but also no doubt enhancing the developing reputation of the Bank itself, which had only been founded a few decades earlier in 1694.

The Bank of England insisted that investors living in London had to appear in person at the bank.

Handel had installed himself in a new, fresh part of London, Brook Street in Mayfair, with wide streets to turn carriages in and bordering on the rural idyll of Hyde Park.

It was also, crucially, west of the older part of London, so didn't suffer from the smoke and smell that was beginning to overwhelm London.

This meant that he had to travel some distance to Threadneedle Street, the old medieval part of London that must have seemed a world apart and, by comparison, must have seemed quite scary - and, given that he was often appearing and leaving with great amounts of cash, must have been quite dangerous.

We can speculate about him visiting Garraways Coffee House, where he may have met with his broker and discussed whether to move into 3% annuities.

Archived secrets

In pursuit of the facts, my producer Paul Frankl and I arrived early one morning at the Bank of England Museum.

We were escorted deep into the archives. They are a programme on their own, the shelves lined with trophies gifted to the bank on many anniversaries, wonderful pictures of the (wonderful) early premises.

There are outdated machines to weigh sacks of guineas and presses to squeeze out a copy of a letter in the days before carbon paper, let alone e-mail.

And then there are the ledgers, decade after decade of them, an extraordinary record of the days when absolutely anybody (with money) could bank at the B of E.

The archivist John Keyworth had fetched down some sample ledgers containing some of Handel's transactions, all signed with his distinctive hand. As impressive to me as a musical manuscript. But it got better.

John had got out one ledger containing a 1725 signature - earlier than the 1728 accounts written about at length by the great Handel financial expert, Ellen Harris. She holds the (slightly unlikely) post of Professor of Music at the hi-tech Massachusetts Institute of Technology.

But then I happened to point at another page, with several South Sea Company annuity transactions bearing more Handel signatures dated even earlier: 1723.

'Eye on the prize'

Professor Harris became very excited when she heard what we had found. After all, 1723 was only three years after the burst of the South Sea Bubble and this was the credit crunch crisis of its day. Many prominent people lost huge investments, including the Master of the Mint, Sir Isaac Newton.

And here he is in the Bank of England records, back in the market only three years after the bust, doing some short term in-and-outing of the annuities now backed by the Bank of England, part of the Bank's effective rescue for London's fledgling stock market.

Professor Harris was excited by this, because it appears to show that Handel had the wealth and the confidence to make substantial stock market investments at the same time as he was setting up house in Mayfair. He lived there for the rest of his long life, leasing not buying, as was the cautious habit of the age.

She told me it was an extraordinary discovery. "I had thought that Handel had not been able to invest in the 1720s, so to discover now that he was also investing in 1723 is really very big news. I am enormously excited."

"That he jumped right back in [to South Sea annuities] is an amazing piece of information. The man apparently always had his eye on the prize."

And all because I happened to peer at a ledger page laid out for me by the Bank of England archivist. Think what other scoops lie lurking in the records.

They await the scrutiny of distinguished scholars of music and financial history, as well as bumbling amateurs such as me.

Peter Day reports in Liquid Assets: Tracing Handel's Thousands at 2200 BST on Sunday, 12 April on Radio 3, then for seven days at BBC iPlayer .

You can find out more about his series In Business

Handel's investments appear in an exhibition at the Bank of England museum, Musical Notes and Banknotes from 14 April.

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