Today on The Academic Minute: Amy Froide, professor of history and chair of the department of history, examines past wrongdoings.
Professor Amy Froide is Chair of the History Department at UMBC where she teaches courses in British history and European Women’s History, focusing on the years 1500-1800. Her areas of expertise include social, economic, and gender history. She is the author of Silent Partners: Women as Public Investors during Britain’s Financial Revolution, 1690-1750 (Oxford University Press, 2016). Her other books include Never Married: Singlewomen in Early Modern England (Oxford University Press, 2005) and Singlewomen in the European Past, 1250-1800 (University of Pennsylvania Press, 1999), co-edited with Judith M.Bennett. Professor Froide has served as the book review editor for the Journal of British Studies, President of the Mid-Atlantic Conference on British Studies, and the founding Director of UMBC’s Entrepreneurship & Innovation Minor. In 2018 she received the University System of Maryland Regents’ Award for Teaching Excellence.
The Long History of Financial Fraud
Today’s news often features headlines about entrepreneurial solutions to poverty, financial mismanagement and embezzlement of corporate funds, and government bailouts. It may surprise you to know that these are not just modern phenomena. Similar events unfolded in the year 1732 with the implosion of the Charitable Corporation–a largely forgotten experiment in microfinance and a neglected example of the fraud endemic to the heady years of the early stock market. Incorporated to make small loans to the working poor, the Charitable Corporation’s shareholders discovered the money was gone, the warehouses of pledged goods were bare, and several officers had absconded with the company’s books. Financial London was rocked to the core.
My current research on this eighteenth-century financial scandal highlights several areas of significance. It is a historical example of micro-lending that shows that although today loans are usually funneled to women, in the past it was men who obtained credit to support their households and communities.
The 1732 financial scandal also illustrates the hazards inherent to investing in new sectors. The Charitable Corporation was notable in having a high proportion of female investors– 35 percent of the funders in the 1700s were women. When the financial scandal came to light, it was these women who led activist shareholders to call for government compensation.
Lastly, the Charitable Corporation scandal provides an example of how company leaders and employees get away with corporate malfeasance. Sloppy accounting, removing checks and balances, and siphoning funds to other businesses are central to the long history of financial fraud.