6: Barings in the Post-War years
The end of the war came on 11 November 1918. Barings at the end of the war was led as much, if not more, by Revelstoke as it had been in 1914. Of the three youngest partners, only Windham Baring returned to Bishopsgate and he then died unexpectedly in 1922. Arthur Villiers rejoined Barings as a director in 1919, but the firm needed someone to take the house forward and Sir Edward Peacock became a director at the start of 1924.
Despite the impact on some areas of the firm’s business, profits had been held up – and in some years boosted – by the increase in what Gaspard Farrer called "certain banking business connected with allied countries". In particular the huge volume of work for the Russian government meant that, even though Barings' fees were generally reasonable, they made significant profits, notably in 1915 and 1916.
The immediate post-war period saw something of an economic boom in Britain, with luxury goods available once more. However, prices were rising, and by the spring of 1920 the post-war boom was past its peak.
The First World War inevitably led to changes in Barings' business. Sterling was a much weaker currency following the War, while the US dollar was much stronger. Some were pressing for a return to the gold standard, which happened in April 1925. This led to more freedom for banks to do business wherever they chose. However, it was set at the pre-war rate of $4.86 to the pound and this led to problems such as high interest rates and deflation.
After the War licences were required for foreign issues on the London market. In the 1920s priority was given to issues for reconstruction in Europe, leading to a geographical shift in Barings’ business. In the 1920s Barings frequently joined with Rothschilds and Schroders to form a powerful issuing syndicate. Countries created from the former Austro-Hungarian empire, for instance, were in desperate need of funds for reconstruction and modernisation. In contrast, the volume of issuing business for Argentina, Canada, the US and Russia reduced significantly.
Meanwhile German reparations had been set at the Treaty of Versailles in 1919. They were reviewed regularly through the 1920s, for example in the Dawes Plan and the Young Plan. Barings' senior partner, Lord Revelstoke, was one of the British delegates to the conference which resulted in the Young Plan.