Women and money in history
Janette Rutterford
Professor of Financial Management
The present
As a 2013 OECD report Women and Financial
Education asserts:
“Women display lower financial knowledge than men ...
women are less confident than men in their financial
knowledge and skills, less overconfident in financial
matters, and more averse to risk”
“Women appear to be better than men at keeping track
of their finances but have difficulties ... in saving and in
choosing financial products appropriately.”
The past
The view of women investors 100 years ago:
“Men invest, women provide them with moral support ...
women are always excluded from financial discussions,
on the explicit grounds that they cannot understand
investments (Alex Preda, 2001).
How did women investors in the past really stack up
against the women of today?
Supply and demand in the
nineteenth century (1)
Primogeniture and emigration led to a large number of single
“redundant women”, a problem identified in the 1851 Census
which increased till after WWI.
Half of women over 15 were spinsters and widows. For every
1,000 men in Hampstead in 1901 there were 3,660 women.
Middle class women depended on investment income to
survive with few long-term job opportunities and limited
access to pensions or life assurance.
Supply and demand in the
nineteenth century (2)
Married women had marriage settlements, MWPAs of 1870
and 1882 gave them financial independence.
Widows’ jointures and inheritances needed to be invested.
Declining government bond yields and an ever growing
number of stock exchange securities encouraged women to
invest in securities with higher promised returns.
Women as speculators
Talking of Chilean bonds:
“Now it may be possible this may not
be true but the public will think so for
some time at least ... At any rate I can
only lose a few hundreds and if it be
true I shall make many thousands”
(Elizabeth Caton to Joshua Bates of
Barings, 1835).
Following celebrities:
Women are driven to gamble in stocks
and shares by the example of “special
social sets” (Financial Review of
Reviews, 1910).
Gwendoline Harleth playing at Monte
Carlo in George Eliot’s Daniel Deronda
Women seen to be at risk
“Widows, clergymen and the reckless” seen as
victims of company promoters.
“Widows and spinsters of small means [who]
with characteristic impetuosity” lost in railway
speculation in the railway mania of the 1840s.
Women with marriage settlements were
vulnerable to fraud or incompetence by trustees.
Bank failures such as City of Glasgow Bank
(1878) and Liberator Building Society (1892)
affected women unduly.
Financial literacy
19th century savings banks encouraged
thrift and married women savers were
welcome. Farrow’s Bank, founded in 1907,
opened a women’s branch.
Newspapers, magazines, publications such
as The Guide to the Unprotected (1863)
and Women as Investors (B.W., 1908)
explained interest yields, how to read a
company prospectus.
Personal advice from advisers, family and
friends.
WWI sales of government savings
certificates aimed at women brought in a
“new class of savers and investors”.
Women and risk aversion, lack of
confidence, income seeking, need
for personal advice
“I have taken fright and sold my Russians, & now I do not know
how to employ the proceeds to the best advantage. Some time
ago you spoke of L.C. & D. Railway Debentures. Do you
recommend them in preference to other lines? Some of the
Indian Government £4% and 4 ½% Stock is as low as 80 & 82.
But perhaps that means that it is not thought very secure. I think
I have heard that Insurance Companies are good investments.
Do you know anything about the prospects of the Midland
Railway? Can you recommend a reliable broker?” Miss
Langton to Mr Bosworth, 1877
What did women buy? (1)
From samples of probate portfolios 1870 to 1902 and
shareholder samples 1870 to 1935 we know that women:
Were important savers in savings banks and investors in
building societies.
Had on average slightly lower risk investments than men:
28% in government bonds (men 21%), 8% in colonial
bonds (men 2%) and bought more long-term, fixedincome securities than men.
Made philanthropic investments.
What did they buy? (2)
Women preferred certain sectors:
transport, commercial and brewing,
utilities and they liked local and brand
name investments they could see.
By the 1930s, companies with over 50%
women investors included:
• Bon Marché
• Boots
• J. Lyons and Company
• London Electric Tramway
• Wantage Tramway
• Southern Mahratta Railway Company
• Anglo-Persian Oil Company
By WWII, well over 40% of investors
were women, up from 3% in 1860.
Women’s participation
.
Women attended AGMs:
“Lady shareholders were to the fore with suggestions at
the annual meeting ... of Slater’s” recommending that they
reduce their prices which were higher than that of the
competition, and employ lady inspectors. (1911)
Women worried about employees:
Mrs Thomson, at the 1920 AGM of Ebbw Vale Steel, Iron
and Coal Company, suggested a subsidised employee
share option scheme.
Women wrote to companies: Mrs Gurrin to Prudential
Assurance, 1920, re the dividend cut, “I suppose that men
can find another way of increasing their incomes but I
can’t.”
Conclusions (1)
100 years ago, women were forced to think about savings
and investment.
They had to maximise yield on their investments, whilst
keeping risk as low as possible.
They invested directly rather than through funds
They were relatively financially literate, from household
budgeting to interest yields.
• There was plenty of advice available.
• They preferred certain types of security, certain sectors
more than others.
Conclusions (2)
In line with modern day research, women in the past also
exhibited risk aversion, lack of confidence, and a tendency
to ask for personal recommendations.
BUT
Not all women were risk averse, or vulnerable. Many were
well informed and some sought risk with surplus funds.
Understanding the range of women’s financial behaviour
and the social, cultural and economic factors affecting it is
vital. In the UK “it is predicted that women will own 60%
of the nation’s wealth by 2025 (CEBR 2005)”.