An Octopus is Born

Chapter Two

The branches of the family of Alexander Brown stretch like the tentacles of an octopus into every conceivable type of money-making enterprise growing out of the Anglo-American establishment that existed in 1800, a generation after America's revolution against the the colonial regime. In order to understand how the original network has grown, we must return to the Liverpool of that day and meet the members of the linen-trading network who became so prosperous. We will study the Browns living in the Baltimore region, the investments made with the textile profits, and the aristocratic Southern lifestyle they established in Maryland and Virginia.

The American Brown brothers

Alexander Brown was born in Ireland only a generation after the birth of Mayer Amschel Rothschild in Germany, but both men followed a very similar pattern in establishing their family banking businesses.  Rothschild having five sons and Brown four, each man created diverse branches of his bank in order to capitalize upon a knowledge of currency exchange and commodity trading over a wide expanse of territory, covering two or more continents.

Alexander Brown, from Ireland to Baltimore

What was to become Deutsche Banc Alex. Brown, Inc. resulted from a merger in 1999 between the German bank and a private investment bank established in Baltimore, Maryland, by Alexander Brown, who first arrived in America in 1800. His parents were William and Margaret Davison Brown, of Ballymena, Ireland where Alexander was born in 1764. His birth came 120 years after Scottish linen weavers had begun to settle around Belfast in 1641. Fifty years later the population exploded when the government’s encouragement of Protestant Northern Ireland to further develop its linen trade led to an influx of Huguenots who had fled France during their persecution by Louis XIV. For more than a century the flax and linen industry would be Northern Ireland’s main source of wealth.

Before leaving Ireland, Alexander worked as an auctioneer in the linen market in Belfast where he had a profitable business. He joined his brother Stewart Brown in Baltimore, leaving behind in London another brother who worked with Alexander in an import-export business.  

William Brown, Alexander’s eldest son, would return to England after living ten years in Baltimore, and he set up a brokerage firm that operated first as W. and J. Brown and later as Brown, Shipley & Co.  A large part of William’s role in the business would be to find wealthy British investors to buy the commercial paper issued in America.

Alexander’s linen trade did so well in Baltimore, that his two youngest sons, John and James, moved first to Philadelphia—James later moved to New York—to open a private investment bank called Brown Brothers & Co. John A. Brown’s first wife and an infant died in 1820 and he returned to Baltimore for several years while his father was engaged with others there in setting up the Board of Exchange. 

In 1823 John married Grace Brown, daughter of Dr. George Brown of Baltimore, and he drifted out of banking during the panic of 1837, leaving James to consolidate the Philadelphia concern into his New York office. The Philadelphia office had initially been opened, it seems, primarily to accommodate clients in Baltimore who had business interests in the former capital city, which had housed the Bank of the United States. Once the bank ceased operations, thanks to President Andrew Jackson, John A. Brown continued in business related to dry goods until 1839.

By 1825, when the New York office opened, America had begun to boom. The opening of the Erie Canal resulted in New York’s becoming the dominant commercial and financial center in America. In addition, the country had paid off the debt created to fund its wars—thus increasing the marketability of new stock and bonds being issued by the Brown family and their competitor, George Peabody. William Brown was able to secure placement of the paper issued by his father and brothers through his contacts in Britain.  

How do we know who bought the stock and bond issues? One way is to examine William’s family tree. Researchers have discovered that banking families frequently marry their not-too-distant cousins and relations of their father’s business associates. It helps to keep the money—and the secrets—in the family. Researching genealogies is, therefore, a very useful tool in understanding confidential financial relationships.

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William Brown, Liverpool

William has been described as a somewhat staid, even pompous, man who, though elected to Parliament to represent Lancashire, never achieved popularity among his constituents. His wife, formerly Sarah Gihon, was the daughter of Alexander Brown’s Belfast linen supplier, a cousin. William and Sarah reared two children to maturity:

Courtesy of Esther M. Zimmer Lederberg

• Their son, Alexander (1817-1849), grew up to marry his “American cousin,” Sarah, the daughter of William’s youngest brother James. 
• Their only daughter, Grace, married John Hargreaves, of the same name as the inventor of the spinning jenny a century earlier (the very invention which had resulted in the Brown family fortune, arising from the boom in the linen industry).

The Brown name survived under Alexander’s three sons:

• Sir William Richmond Brown (1840-1906), who inherited the title granted to William upon his grandfather’s death in 1864.
• James Clifton Brown (Colonel), a military man, who died in 1863.
• Sir Alexander Hargreaves Brown (1844-1922), who married Henrietta Agnes Terrell Blandy, from a wine merchant family in Madeira, Spain. That marriage made him a brother-in-law of the famed Sir William Thomson (Lord Kelvin), inventor of the binnacle known to seamen as "Lord Kelvin's Balls".

The Hargreaves tree also links back to the Brown family tree by virtue of marriages between Grace Brown Hargreaves’ great-granddaughter Violet Cicely Wollaston (daughter of Ann Hargreaves Wollaston)  to Grace’s brother (Alexander’s) grandson, Douglas Clifton Brown.

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The period of time covered above began in the period of peace between the two wars against Britain and carries us up to the decade following the loss of the Presidency by John Quincy Adams to Andrew Jackson. Alexander Brown died in 1834 and was succeeded in Baltimore by son George, who died in 1859. After the death of eldest son William in England, the youngest, James, operated the banking business on his own until his own demise in 1877. In the next chapter we will review what happened in those last few years and how the bank carried on following the civil war.