Alexander Fordyce
Alexander Fordyce | |
|---|---|
| Born | Template:Birth date Belhelvie, Scotland |
| Died | September 8, 1789 (aged 60) |
| Occupation(s) | Financier, banker |
| Known for | Collapse of Neale, James, Fordyce and Down leading to the credit crisis of 1772 |
Alexander Fordyce (7 August 1729 – 8 September 1789) was a Scottish financier whose collapse at Neale, James, Fordyce and Down precipitated the credit crisis of 1772 following a bank run. After absconding overseas and declaring insolvency, he ultimately recouped his losses through other profitable ventures.
Early life
Fordyce, the youngest son of George Fordyce of Broadford (1663–1733), six-time Provost of Aberdeen, was baptized in Belhelvie. He was a half-sibling to David, Agnes, James, and William Fordyce. Educated under the guidance of his uncle Thomas Blackwell at Marischal College, he began his career in Aberdeen's hosiery industry before joining the London banking house Boldero & Co as an outdoor clerk in 1757. His brother James entered the Presbyterian ministry in London two years later.
In 1768, Fordyce contested the Colchester seat as a radical candidate, expending nearly £14,000 but narrowly losing by 43 votes to Charles Gray. He invested substantially in the borough, financing both a chapel and a hospital. At age 42 in June 1770, he married Lady Margaret Lindsay, daughter of James Lindsay, 5th Earl of Balcarres, at Balcarres House in Fife. That same year, he assumed the role of rector at Marischal College, Aberdeen. Early in 1771, his gold watch was stolen during a highway robbery; the culprits were subsequently executed.
Banker and speculator
Beginning in 1757, Fordyce became a partner at Neale, James, Fordyce and Down located on Threadneedle Street in London. Under his direction, the firm engaged in aggressive speculation, notably profiting from early information about the signing of the preliminaries of the Peace of Paris in 1763. In 1764, he collaborated with Amsterdam-based bankers Hope & Co., leveraging a substantial increase in East India Company shares during 1764–65. Utilizing profits from these and other speculations on Change Alley, Fordyce purchased an estate near Wimbledon—now known as Grove House, Roehampton—where he led an extravagant lifestyle.
In July 1770, Fordyce entered into partnership with Grenadian planters John and William Macintosh, borrowing 240,000 guilders through bearer bonds from Hope & Co. Other investors included Sir William Pulteney, Samuel Hannay, Samuel Hoare, and John Harman. Hope & Co. also managed Fordyce’s transactions on the Amsterdam stock exchange, involving British East India Company shares. Initially, Fordyce concealed financial setbacks from his partners by temporarily borrowing banknotes to maintain an appearance of liquidity.
However, his financial position deteriorated rapidly in early 1771 as market instability arose due to the Falkland Islands dispute with Spain. He incurred significant losses and adopted a heavy short position against East India Company stock during 1771–72—a strategy that failed when share prices soared dramatically by May 1772.
Financial crash and aftermath
On 8 June 1772, Fordyce’s insolvency became apparent. The following day he absconded to evade debt obligations; his bank ceased payments on 10 June. Having lost £300,000 by shorting East India Company shares, his partners faced liabilities estimated at £243,000. His speculative activities drained the bank’s reserves and led to withdrawal of Bank of England support. By 13 June he was compelled to surrender himself and reveal details of his estates.
The news reached Scotland on 12 June and sparked a bank run on the Edinburgh branch. Within two weeks eight London banks had collapsed. The ensuing panic triggered widespread bankruptcies among investors and creditors alike. On 24 June Fordyce’s possessions and estate were seized; he was declared bankrupt while Neale, James, Fordyce and Down—substantial purchasers of Scottish bills of exchange—were declared insolvent. The Ayr Bank also failed on the same day.
This suspension initiated a broader financial crisis. Leading bankers such as Sir Richard Glyn and Sir Thomas Hallifax temporarily halted payments; Sir George Colebrooke nearly followed suit. From 25 July Fordyce was granted seven weeks to negotiate with creditors. Altogether approximately twenty banks across Scotland and the Dutch Republic collapsed during this period.
After being extradited from France in September, Fordyce underwent examination at London’s Guildhall where he declared personal bankruptcy amounting to roughly £100,000 in debts. By December he consented to a repayment arrangement with creditors. In 1774 he sold his estate under pressure from plaintiffs including Hope & Co and Hoare to Sir Joshua Vanneck. A sermon delivered by Thomas Toller in 1775 documented Fordyce’s downfall. He made an unsuccessful parliamentary bid for Colchester in 1780.
Fordyce passed away after prolonged illness on 8 September 1789 near Portman Square. His widow remarried Sir James Bland Burges in 1812.
Notes
- Origin