HAMBURG AND CORUNNA: THE BEGINNINGS

Nowadays Huth is recognised as a leading London merchant banker. Yet, his commercial origins can be traced to Hamburg and Spain. Frederick Huth, the founder of Huth & Co., was born in Hanover in 1777 (Jones Reference Jones2004, pp. 1-3) and in 1791 he was admitted as an apprentice to a Basque merchant house in Hamburg called Brentano Urbieta & Co. This was not unusual at that time since many Basque merchants established themselves in European Atlantic ports during the 1790s (Angulo-Morales Reference Angulo-Morales2011). Hamburg was by this time one of the primary ports in continental Europe, an important entrepot of colonial produce, in particular with regard to the British and Spanish empires. Merchants in Hamburg were well connected to the most important European entrepots of the time. Furthermore, when in 1795 Amsterdam was taken by the French, Hamburg made further commercial gains from this situation. In addition, merchants formerly working in Le Havre, Amsterdam and Antwerp emigrated to Hamburg, bringing with them vast networks of trade and their capital (Jones Reference Jones1987, pp. 36-37; Roberts Reference Roberts1992, pp. 14-15; Wake Reference Wake1997, p. 10). In other words, Huth could not have asked for a better port to start his education.

After four years working for these Basque merchants, Frederick Huth was promoted to senior clerk, and two years later, Juan Antonio Urbieta (the head of this house) decided that he was of better use in Corunna, where they had a branch house (Murray Reference Murray1970, introduction). The links between Hamburg and Corunna were important on account of the re-export trade of Spanish colonial produce, but also because of the re-export of Silesian linens from Hamburg to Corunna, and from Galicia into the rest of Spain and even Spanish America (Jones Reference Jones1987, p. 37). The Corunna house was headed by a brother of Juan Antonio, who increasingly left much of the running of the house in Huth's hands. In addition, his arrival at Corunna roughly coincided with the end of the monopoly of Seville-Cadiz with Spanish America. This is important because it was in Galicia that Huth became familiar with Ibero-American trade. Indeed, he was sent to South America several times acting as supercargo. During these trips he landed in Rio de Janeiro, Callao, Valparaiso and Buenos Aires, gaining valuable experience for his future operations from London. Overall, Huth's appointment in Galicia is crucial to understanding his later connections with Spain after moving to London in 1809. It gave Huth a first-mover advantage over potential competitors, as well as long-lasting friends who could be trusted at a time when one of the main obstacles to international trade was the lack of trust. In turn, trust was intimately linked with two other crucial elements in international trade: credit and reputation (Casson Reference Casson1998, p. 23; Lamikiz Reference Lamikiz2010, introduction).

Frederick's commercial experience in Hamburg, Corunna and South America convinced him that he was able to manage a business of his own and indeed, despite having been appointed chief clerk of Urbieta's Galician branch, he decided in 1805 that it was time to open his own establishment (Murray Reference Murray1970, introduction; Jones Reference Jones2004, pp. 2-3). Unfortunately for him, the Napoleonic invasion of the Iberian Peninsula followed soon after, and Huth decided to leave the country. He had already married a young Spanish lady called Manuela Felipa Mayfren (Freedman Reference Freedman1968, pp. 12-13).

Thus, Huth and his wife moved to London with little capital and only a few letters of introduction given by his friend, the merchant Juan Francisco Barrié. Huth also had some valuable London contacts, previously cultivated while working for Brentano Urbieta. Among those who helped Huth in his early days in London was Fermín de Tastet, a Spanish merchant resident in London and a contact provided by the UrbietasFootnote ¹. Tastet helped Huth to settle in England and provided him with many contacts in Spain beyond Galicia. Furthermore, when Huth decided to take a partner on board in 1815, he chose John Frederick Gruning, at that time working for Tastet. Given that Gruning remained his principal partner until his death, the long-term influence of both Tastet and Spain's on Huth should be seen as critical. Another early influential friend in London was Adalid, a merchant from Corunna by then also resident in the English capital. Finally, Flores-Mendez also proved helpful to Huth during his early years in London. All in all, it is clear that without the Spanish connection Huth's establishment in London and his subsequent expansion would have been very difficult if not impossible.

TRADING WITH SPAIN FROM LONDON: THE EARLY YEARS

In London in 1809, Huth resumed business as a general commission merchant, albeit under difficult trading conditions given the impact of the Napoleonic Wars on European trades at a time when England's main trading partner was Europe. The first three years of Huth's operations are not well documented. Yet, we have a good source of information from 1812 onwards. Table 2, for example, contains Huth's worldwide correspondents for 1812-1813, and it gives us a clear sense of his early activities. Trade with Spain was the backbone of the business, while the English connection was obviously very strong too. Overall, he relied heavily on the contacts previously made in Spain.

TABLE 2 LOCATION OF HUTH'S CORRESPONDENTS, 1812-1813

Source: Huth Papers Spanish Letters (HPSL).

Huth's main contacts in Spain were located in Bilbao, Cadiz, Corunna, Rivadeo, Santander, Santiago de Compostela and San Sebastian. Essentially, Huth obtained consignments of a wide range of British products for their friends. More importantly, however, and certainly a consequence of the extensive involvement of Hamburg and Corunna in colonial products, Huth also obtained consignments of non-British products. Indeed, around this early time, Huth's strongest support to trade from Britain to Spain was not in British manufactures but in foreign produce. In the particular case of pepper and other spices, Huth was very active in London public auctions, buying for up to 45 «friends» in Spain around the early and mid-1810sFootnote ². For all these operations Huth charged a small commission on invoices and sales of no more than 2.5 per cent for exports to Spain, certainly a small fee given all the savings on searching for information, agreeing prices and looking for trusted buyers or sellers. In exchange for exports to Spain, Huth received consignments of wool, and many other Spanish products. Spanish wool, however, occupied most of Huth's energies. Huth's correspondents in Spain linked to this trade consigned the wool to London or Bristol. If sent to Bristol, Hill & Sons and Greaves & Son received and sold the wool on Huth's behalfFootnote ³.

During this early period, Huth operated mainly under consignments, that is, getting Spanish colonial produce on consignment and encouraging British suppliers to consign their merchandise to Huth's contacts in Spain. Thus Huth mainly acted as an intermediary between sellers and buyers. Why did Spanish buyers not engage directly with British sellers, or British buyers with Spanish sellers? The main reason for this was the high transaction costs involved. The main obstacles to trade between Spain and Britain before 1850, as between so many markets at the time, were the lack of direct contact, trust, product specification, agreement on prices and the language barrier (Chapman Reference Chapman1992, p. 25; Casson Reference Casson1998, p. 23; Jones Reference Jones1998, p. 17). Thus, the main transaction cost components of these obstacles were the search for information, sampling of products, price setting and monitoring of quantity, quality and punctuality in delivery.

However, because Huth had operated in Spain and Britain, and because the company had so many sources of information for both markets, Huth mastered both the British and the Spanish markets as very few competitors did. We must be aware that London merchant banks not only handled flows of goods and securities; they also handled large amounts of information (Casson Reference Casson1998, pp. 34-35). Because Huth was trusted by merchants at both ends of the market chain, Huth was in a better position than most competitors to reduce transaction costs and thus provide the necessary means of linking buyers and sellers who could not otherwise trade easily among themselves. It was too costly, for instance, for a Spanish wool exporter to find a buyer in Britain and to agree on a selling price; he preferred to use trading companies based in Britain, including merchant bankers such as Huth, as «market-making» intermediaries (Casson Reference Casson1998, pp. 22-24; Jones Reference Jones2000, pp. 27-28). Likewise, if a merchant in Spain (e.g. Ybarra) wanted to be the bridge between British consigners and Spanish consignees, then this merchant would need either to open a branch in London (at a significant incremental cost) or to pay a commission to a broker in London, which was probably the same commission Huth charged their Spanish clients so that it made little sense to become involved in that kind of transaction.

Likewise, when a seller was consigning to a foreign market in the period between the 1810s and the 1840s, he usually needed credit, which was provided by merchant banks. Indeed, the provision of credit was an intrinsic part of the activities of any international merchant during this period, and Huth (like so many London merchant bankers) was quick to enter this market. For example, his Spanish contacts would draw against Huth for exports from Spain. Without these advances most Spanish consignments would not have been possible since Spanish exporters usually lacked working capital, which was abundant in a financial centre such as London, a point further developed below. In any case, such was the importance of advances that the acceptance business became the most important way of financing world trade during the 19^th century (Jones Reference Jones2000, p. 23). Indeed, a leading merchant bank would deal with hundreds of clients whose international trade it supported, effectively acting as private bankers to many of their clients (Chapman Reference Chapman1984, p. 115).

Finally, because ports in the south of England were well connected to the north of Spain where most of Huth's correspondents resided, it made sense to have agents there. In Plymouth, for instance, Huth was assisted by James Olver, who provided ships’ information, forwarded letters and handled returns received from Spain. Likewise, in Portsmouth, Day & Phillips provided similar services. Finally, Huth's confidential agents in Falmouth were G. C. & R. W. Fox, all of whom were vital to the promotion of their Spanish dealings. This is important because any potential Spanish competitor based in Spain wanting to «steal» some of Huth's clients would surely need to pay agency fees in many of these southern English ports, which undoubtedly was a major obstacle to overcome when competing with Huth.

CONSOLIDATING BILATERAL TRADES WITH SPAIN: A MATURE BUSINESS

In 1812 Huth had fewer than 60 business correspondents in Spain. By 1822 this figure had trebled, and around the mid-1830s quadrupled in relation to 1812. I am not aware of any other London merchant banker having so many connections in Spain at this early stage. Most prominent merchant banks of the period concentrated on Anglo-American trades or on one or two other markets (Chapman Reference Chapman1984, p. 38), among which Spain was not always a preferred option. Such was the case, for example, of Baring Brothers (Chapman Reference Chapman1984, pp. 26-27; Austin Reference Austin2007, pp. 65-67)Footnote ⁴, Brown Shipley & Co. (Perkins Reference Perkins1975, pp. 17, 112-113; Chapman Reference Chapman1992, p. 152), Swire & Co.Footnote ⁵, Cropper & BensonFootnote ⁶, and Rathbone Brothers & Co., all of which remained highly focussed on the United States. Likewise, before 1850 other comparable London multinational traders specialised in European markets, but these were beyond the reach of Spain. Such was the case of Brandt Sons & Co. (Chapman Reference Chapman1984, p. 122), and Ralli Brothers (Roberts Reference Roberts1992, p. 53; Kynaston Reference Kynaston1995, p. 56; Jones Reference Jones2000, pp. 24-25).

Huth's vast number of correspondents in Spain is a clear indication of the consolidation of Huth's British trades with Spain. As part of this process of consolidating their position in Spain, it is worth noting that Huth's involvement in the Spanish wool market remained strong during most of the period covered by this article. Yet, there was also a process of product diversification. Apart from wool, another Spanish product, which became very important for Huth's dealings was wine, in particular the Jerez variety, which was at that time one of the main Spanish exports, especially to Great Britain (Prados de la Escosura Reference Prados de la Escosura1982b, pp. 208-210). Their main contact in Spain for this product was Haurie & Nephews, of Xerez, an important local dealer in this commodity. Thus, Huth received in London vast quantities of Jerez, which were redistributed to other locations around Britain. Huth, however, also instructed Haurie to send the wine directly to places such as Liverpool, Dublin and Bristol, where Huth had either a branch or confidential agents who took care of the subsequent redistribution of the wine to other locationsFootnote ⁷.

Regarding Huth's strategy of product diversification, their networks within Britain expanded substantially between the 1810s and the 1840s, in particular the textile connections. Thus, apart from trading extensively in wool, wine, pepper, other spices, Indian cottons, tallow, hides, cinnamon, tobacco, rice, cod, rum and sugar, Huth had now become a major player in the British textile export trade, sending vast supplies to Latin America, North America, continental Europe and Asia. In turn, textiles were the main import of Spain and Britain the most important supplier (Prados de la Escosura Reference Prados de la Escosura1982b, pp. 215-217). A logical consequence of this process was that Huth's textile exports to Spain also increased significantly during this period, as well as the number of clients in Spain. Apart from British textiles, Huth also started to send vast quantities of other British products to Spain, such as iron and coal, which were also falling within Huth's expertise in international trade.

Interestingly, this product diversification was unique for a London merchant banker during the 1810s-1840s (Llorca-Jaña Reference Llorca-Jaña2013). The usual pattern for multinational merchants and merchant bankers during this early period was to specialise in one or a few commodities only (Chapman Reference Chapman1984, p. 8). For example, according to Chapman, prominent merchant banks of the period such as Baring Brothers and Rothschild «focused on two or three sectors or world trade in which they had come to specialise» (Chapman Reference Chapman1984, pp. 35-36). Likewise, during the first half of the 19^th century Schroders’ main areas of trade were grain, raw cotton and sugar (Roberts Reference Roberts1992, chapter 1), while Ralli Brothers specialised in textiles and grains (Jones Reference Jones2000, pp. 24-25). Finally, the House of Brown focussed mainly on the raw cotton trade (Perkins Reference Perkins1975, pp. 17, 112-113).

This partly explains why so many Spanish importers receiving consignments from Britain preferred to use the services of Huth rather than merchants based in Spain. We do not know what sort of commissions a merchant in Spain would need to charge in order to obtain consignments from London of many British or colonial products for other Spanish merchants also resident in Spain, but we do know that Huth's 2.5 per cent commission was very low. We also know that if a Spanish merchant based in Spain wanted to compete with Huth, then that merchant needed the same level of expertise with regard to the products and would probably need either a branch in Britain or to pay a confidential agent there, which would surely increase his costs well above those charged by Huth.

Indeed, even the mighty Ybarra & Co. used the intermediary services of Huth to purchase products in BritainFootnote ⁸. Furthermore, Huth had a sound knowledge of most products widely traded between Britain and Spain, which a merchant based in Spain would certainly find very difficult to match. Huth also had a good reputation in London, having survived all the financial crises affecting merchant bankers during c. 1810-1850, so that those British consigning to Spain preferred to do so through Huth (and other British merchants) rather than through an unknown and untested Spanish merchant. Finally, the British legal framework, which applied to those consigning through London merchant houses was certainly preferred by British consigners over the Spanish legal framework when things went wrong.

HUTH'S CONNECTIONS WITH THE SPANISH MONARCHY

Frederick Huth's marriage had important consequences for his future commercial dealings with Spain. Indeed, Manuela, his wife, was well connected with the Spanish monarchy because of the fact that her father was a senior member of the Spanish King's court, and after her father's death she was taken under the care of the influential Duke of Veragua (Jones Reference Jones2004, pp. 1-3). Thanks to these connections, Manuela became closely acquainted with the Princess of Asturias (Maria Antonia) (Murray Reference Murray1970, pp. 72, 77). When Huth left Spain for Britain in 1809 he and his wife took with them jewels belonging to Ferdinand and Maria Antonia for safe keeping, as Maria Antonia had feared before her death that they could be lost, given the political instability in Spain during the Napoleonic Wars. The jewels were returned by Huth in person once Ferdinand was restored and Maria Antonia had already passed away (Murray Reference Murray1970, pp. 77-78, 108).

But Maria Antonia's early death was not the end of Frederick Huth's connections with the monarchy. He was also on good terms with the Spanish Queen Maria Christina. Indeed, in 1829 he was appointed the Queen's financial adviser and private banker in Britain. Furthermore, after her husband's death in 1833, Maria Christina continued to rely on Huth for private financial operations in London. That same year she secretly married Fernando Agustín Muñoz, who happened to be the son of one of Huth's earliest contacts in Spain. Indeed, during the Carlist Wars, Maria Christina regularly channelled private funds to London via Huth to invest them in British and American securities. The nature of these operations should not surprise us given the high level of corruption in Spain at that time (López-Morell Reference López-Morell2005, p. 89). The key men behind these operations were Fernando Muñoz, Funez y Carrillo and Manuel de Gaviria. It is worth mentioning that the latter had been a very close friend of Ferdinand VII and his widow. Indeed, in 1833, when he was already the quartermaster of the Casa Real, he was also entrusted with the royal family's treasury (López-Morell Reference López-Morell2005, p. 89).

By purchasing American securities, Spanish investors (including the crown) were looking for the high returns provided by the new American states. It is well known that during the first decades of the 19^th century American securities were widely introduced into Europe by institutions such as the Bank of the United States in association with London merchant bankers such as Peabody and Huth (McGrane Reference McGrane1935, pp. 8-9; Chapman Reference Chapman1984, pp. 46-47; Kynaston Reference Kynaston1995, pp. 116-117). As part of this process, in 1836 Huth sold British consols belonging to Funez y Carrillo, which fetched over £300,000 on the London market. This sum was 250 per cent of Huth's capital at that time so represented a sizeable sum of money, and it eventually ensured Huth's entrée into the American securities market. Indeed, after completing this operation, Funez y Carrillo asked Huth to invest part of these funds in American securities. After assessing several options, Huth decided to invest most of the Spaniards’ money with the infamous Bank of the United States in the middle of the 1836-1837 crisis. This decision was taken following the recommendation of one of Huth's agents (Perit of Philadelphia). Despite the ongoing crisis, the Bank of the United States was still seen by Perit as a reputable institution. The operation involved a £200,000 loan from Huth (using Funez y Carrillo's funds) to the Bank at an annual interest rate of 5 per cent and with the entire capital to be reimbursed ten years later. The Bank was also to pay a commission, which was distributed between Funez y Carillo, Huth and PeritFootnote ⁹. In addition, £25,000 was invested by Funez y Carillo in Morris Canal & Banking's bonds.

Furthermore, a few years later in 1839, Huth bought more American securities for their Spanish clients. This time the chosen instruments were state bonds of the Union Bank of Mississippi, worth over £120,000. Among the final buyers were Gaviria (£79,000), Funez y Carrillo (£42,000) and a lesser-known Spanish investor called Miguel AlavaFootnote ¹⁰. In addition, Gaviria acquired Alabama bonds for some £44,000 and Arkansas bonds for another £60,000. Regarding these operations, it is believed that Gaviria and Funez y Carrillo subsequently transferred these bonds to Fernando Muñoz, who had secretly married Maria Christina, and that in turn Muñoz was actually buying on behalf of the Spanish Queen (Freedman Reference Freedman1968, p. 343).

At this stage the reader may wonder why Spanish investors needed Huth's services to buy American securities or why American sellers needed London merchant banks as intermediaries to sell their securities on the Spanish market. The answer is clear: transaction costs were too high, in particular because of the lack of trust and information. In intermediating financial flows, a merchant banker used the same principles as used when intermediating commodity flows, procuring funds from an investor «with whom it has built up a reputation for sound judgement» (Casson Reference Casson1998, pp. 37-38). In our case, if a Spanish investor wanted to invest in American securities, he needed to have good information about the securities being offered at that time on the market. Few Spaniards could have had a good working knowledge of the American market during this early period, while, in contrast, Huth enjoyed an extremely close financial connection with the United States. That is, most potential Spanish competitors were excluded from this profitable business because American states and companies preferred to use the services of trustworthy London merchant banks, widely known not only in the United States and Britain but also in many the parts of continental Europe where United States securities ended up.

Indeed, from the mid-1830s Huth was very active floating United States securities on the European market (McGrane Reference McGrane1935, p. 9; Jenks Reference Jenks1963, chapter 3), at a time when not even Baring Brothers or Rothschild participated in this marketFootnote ¹¹. By this stage Huth had two important confidential agents in the United States: Goodhue & Co. of New York and the aforementioned Perit of Philadelphia. They both provided invaluable information for Huth, who trusted them; this fact was known to his friends in Spain who, in turn, fully trusted Huth. That is, trust and information were readily and cheaply provided by Huth, in particular if compared with other alternatives available in Spain. From the American sellers’ point of view, they needed a reputable house to offer their securities (otherwise no one would buy them) and Huth's reputation was beyond discussion (Chapman Reference Chapman1984, p. 72). This is important because before the transport and communications revolution of the second half of the 19^th century «a good reputation, built on past behaviour, was often the only reliable antidote to the effects of distrust» (Lamikiz Reference Lamikiz2010, p. 10).

As a result, the commission Huth charged Spanish investors on the purchase of American securities was very low. If a Spanish merchant banker wanted to compete with London merchant banks in this market he would need high-quality confidential agents in the United States, as Huth had in both Goodhue and Perit, to whom a commission also had to be paid. This of course was not easy to achieve and certainly did not come cheap. Furthermore, the Spanish merchant banker needed to be trusted by US states wanting to float their debt in Europe, so that they would need to be perceived as reputable and attractive not only to Spanish investors but also to other European investors beyond Spain. However, an international reputation was not easily achieved and Spanish merchant bankers of the time did not often deal directly with the United States so were little known there.

Yet, despite Huth's credentials, the Bank of the United States suspended specie payments in 1839 and eventually closed its doors in February 1841 and passed into liquidation (Kynaston Reference Kynaston1995, pp. 116-117). Likewise, in 1840 the Morris Canal & Banking failed to provide dividends and subsequently also collapsed. In addition, in 1841 the Union Bank of Mississippi failed to pay dividends on its bonds, and the legislature of that state later repudiated its bonds altogether. Other states (including Arkansas) also failed to pay dividends on their debts because of lack of funds. Not surprisingly, American securities had a very bad reputation in Europe and few transactions took place on the London market. As a consequence, Huth's Spanish clients saw an important part of their investments heavily compromised. This was perhaps the worst error of judgement Frederick Huth ever made. He advised his Spanish friends badly and public opinion punished merchant bankers for recommending their clients to invest in risky and uncertain ventures. After all, Huth, like many other intermediaries disposing of securities, did not lose any money; he lost his clients’ money. The Times in particular launched a ferocious attack on merchant bankers, which no doubt was applauded in Madrid. The Times even called for an enquiry

Among these «innocent holders» Spanish investors were doubtless first on the list.

For several years Huth's Spanish clients did not see a single penny from their investments in the Morris Canal, the Union Bank of Mississippi and the Bank of the United States. Such was Funez's anguish (and surely the Queen's), that in the early 1840s he moved to the United States to try to recover part of his capitalFootnote ¹³. Painful negotiations followed, but the Spanish investors only recovered a small part of their moneyFootnote ¹⁴. The Spaniards’ most important concern was undoubtedly the £200,000 invested in the Bank of the United States. Thomas Dunlap, a former president of the bank, was assigned to recover the due monies. In addition, Leon Lillo (financial adviser to the Queen of Spain in Paris) was also sent to support Dunlap's efforts. However, even after the bonds matured in 1847, it proved very difficult to recover anything at all. At one moment it was even suggested that in order to recover the Union Bank of Mississippi's bonds one strategy would be to disclose that «the Queen of Spain was the owner of a large amount of bonds represented by Huth … [and] that a foreign royal personage could sue a state in the United States Supreme Court» (McGrane Reference McGrane1935, p. 216), although this idea was eventually disregarded.

In any case, Huth's bad advice to Spanish investors did not seem to have affected his reputation in Spain, not even within the Spanish Royalty. Indeed, in 1847 he was made Knight Commander of the Order of Charles IIIFootnote ¹⁵. Likewise, Huth was appointed as Paymaster Abroad for the Spanish state, that is, the firm was in charge of paying Spanish consular agents and diplomats worldwide. By having so many correspondents all over the world, Huth was in an ideal position to accomplish the task entrusted by the Spanish Crown. No other London merchant banker of his time had diversified geographically as Huth did before 1850, let alone a Spanish merchant banker. Indeed, around 1847 Huth had over 1,800 correspondents in all continents, as seen in Table 3. All the company had to do was to instruct Spanish diplomats and consuls abroad to present their salaries’ receipts to one of its nominated connections in the location where that consul resided.

TABLE 3 LOCATION OF HUTH'S CORRESPONDENTS. A SAMPLE FOR 1846-1848

Source: Huth Papers, Spanish Letters (HPSL), English Letters (HPEL) and German Letters (HPGL): HPSL-177; HPSL-178; HPEL-49; HPEL-50; HPGL-122; HPGL-123.

Finally, Huth's connections with Spanish authorities spread further afield. For a while the firm was well connected to Jose Safont, who was one of the agents of the contractors to the Spanish government procuring tobacco for the country. Thus, for example, Huth arranged a deal between Clason & Ules of New Orleans and Safont, for the former to supply tobacco to the latter. For these operations, Huth granted a substantial credit of £60,000, for which the bank reserved its rights to charge a small commissionFootnote ¹⁶. All in all, Huth's connections with the Spanish royalty were surprisingly diverse. For example, the firm also participated indirectly in a Spanish government monopoly (i.e. quicksilver), as is described in the following section.

SPANISH QUICKSILVER

Apart from Spanish wool, wine, and other products, Huth was also very interested in Spanish quicksilver, an essential input for the production of silver in the world, the supply of which, during our period of study (before the Californian discoveries), was mainly restricted to Spain (Almadén and Almadenejos mines), and to a lesser extent to Peru (Huancavelica) and Idria (now Slovenia). Indeed, during the first decades of the 19^th century quicksilver became one of the emerging products within Spanish exports (Prados de la Escosura Reference Prados de la Escosura1982b, p. 183). Huth's interest in this commodity began in the mid-1810s, and it increased after the opening of the bank's branches in Chile and Peru during the 1820s, as both countries were important producers of silverFootnote ¹⁷. On the West Coast, Huth was one of the main merchant houses, and was well connected with local merchants and authorities, including, for example, the director of a silver mine. This situation, according to Huth, put them in a good position to sell vast quantities of quicksilver on the PacificFootnote ¹⁸. Likewise, although Huth did not have a branch in Mexico, it had a very important connection there: the Drusinas, who were their confidential agents and who were also keen to receive this product given Mexico's paramount silver production.

Almadén's quicksilver production, however, was in the hands of the Spanish Crown, so that it was very difficult to get any consignment of mercury without good political connections in Madrid. Yet despite Huth's close links with the Spanish Crown, they could never secure much in the way of supplies from Spain. Nonetheless, a first consignment of quicksilver was obtained by one of Huth's sons, after touring Spain in 1829Footnote ¹⁹. A connection with Corral y Puente, who was well connected in Madrid and Seville in relation to the mercury trade, proved particularly usefulFootnote ²⁰. Such was Huth's interest in this product, that although by the late 1820s they were operating mainly on consignments for most products, they were willing to operate on own account for this particular commodity if Corral y Puente could secure a deal with the Spanish governmentFootnote ²¹. Nonetheless, Huth's early endeavours to get more consignments failed miserablyFootnote ²². Apparently, other «Spanish» houses operating in London were better connected, and so were the mighty Rothschild & Sons.

Thereafter, the situation seemed to have worsened until 1830, when the Spanish Crown decided to grant the production of Almadén to a sole buyer. The first contract was given to Iñigo Ezpeleta of Bordeaux and had a duration of five years, and in 1835 it passed to Rothschild & Sons (Prados de la Esocura Reference Prados de la Escosura1982b, pp. 205-206; López-Morell Reference López-Morell2005, p. 65; Platt Reference Platt2011, p. 38). This near monopoly-monopsony left Huth with few options of trading directly in this product. Instead, the firm now resorted to getting consignments from the Rothschilds. From c. 1836 Huth became Rothschild's agent in Chile and Peru. Likewise, Huth's agents in Mexico were entrusted to sell Rothschild's quicksilver (Platt Reference Platt2011, p. 41, Reference Platt2012, p. 213). Although it was true that Huth depended on the Rothschilds to obtain consignments, it was also the case that without Huth's services or those of a similar house in either Chile, Peru or Mexico, the Rothschilds would not have been able to do much business without running major risks, as one of their agents touring Latin America reported: «Having only been here so short a time I cannot yet state whether I shall be able to take charge of the quicksilver at first without the intervention of either … Huth or some other house. I think however from the manner in which business is conducted here in general that I shall not be able to do so»Footnote ²³. And indeed, in order to sell Rothschild's quicksilver in Latin America Huth charged a very high commission of 13 per cent. Yet, because Rothschild did not have a branch in either Chile, Peru or Mexico, they were forced to rely on Huth.

What is more, as well as receiving consignments from the Rothschilds, Huth also bought from them on their own account, in particular sending cargoes to DrusinaFootnote ²⁴. Helping to develop this trade to Mexico was the fact that Henry Huth, one of Frederick Huth's sons, worked for the Drusinas for several years, even becoming a partnerFootnote ²⁵. Unfortunately, vast quantities of quicksilver started to be produced in California from the late 1840s, and this production reached not only Mexico but also Chile and Peru at lower prices than the Rothschilds had been offering for over a decade. In California, production was in the hands of Forbes, and their chosen agents in the Pacific were one of Huth's main competitors: Gibbs & Sons. Undoubtedly, this was a great blow to Rothschild's re-exports of Spanish quicksilver to the Americas, and Huth's interests in this trade, as the market price declined quicklyFootnote ²⁶.

MOVING BEYOND BILATERAL TRADES: HELPING SPAIN TO TRADE WITH THE WORLD

Huth, and in particular his global trading and financial networks, expanded exponentially after the 1820s. By 1850 the bank had an accumulated list of over 6,000 correspondents all over the world, in more than 70 countries in the five continents (Llorca-Jaña Reference Llorca-Jaña2013). Yet, despite this success, Huth's expansionary process was not exempt from difficulties. Trust was key to building commercial networks during this period, but was only slowly and painfully cultivated. For example, when he was establishing his London branch, Frederick Huth once confessed that he was trying to get some cargoes of cod from Newfoundland for Spain, but that no house wanted to enter into business with him because he was unknown thereFootnote ²⁷. Recommendations from other merchants were fundamental to multiplying the network of contacts, and he learnt how to use them effectively. For example, Brentano Urbieta gave Huth many of their most valuable early contacts abroad, like Conrad Rucker of Montevideo, to whom Huth started to consign Catalonian wineFootnote ²⁸.

Apart from his first masters, Frederick's contacts in Spain also provided many of his early connections in Latin America. For example, the Llano family of Corunna had some relatives in the River Plate, to whom he was quick to write after establishing a base in London, and he soon started trading with Llano & Hermano of Buenos AiresFootnote ²⁹. Likewise, Serra of Corunna was happy to provide the means of connecting Huth with Alsina of Buenos AiresFootnote ³⁰, while the Sanchez family of Corunna also provided links to their branch house in Buenos Aires. Finally, many of his early correspondents in Spain had sister offices in many of the Spanish colonies. For example, the principal partner of Pola Mendive of Havana (one of the main correspondents in Cuba) was Menendez of Corunna, while Goicouria, also of Havana, was also a branch of Goicouria e Hijos.

Although it is true that many of Huth's earliest connections in Latin America were in the main provided by Spanish merchants, Huth's global network stretching to over 70 countries was not solely because of contacts made in Frederick's early life in Spain. They were mainly a consequence of his honesty, his ability to nurture friendships, and later on to his commercial reputation. More importantly, Huth's connections in Spain could now profit from the firm's connections all over the world. Indeed, Huth not only participated actively in bilateral trades between Spain and Britain, but was also happy to help supply Spanish merchant establishments in Spain, Spanish colonies or former Spanish American colonies from beyond Britain. Upon Huth's intermediation and recommendation, Huth's friends in continental Europe, Asia and the Americas regularly supplied many of their «Spanish» connections anywhere in the world. For example, glasses from Bohemia were sent to Buenos Aires thanks to Huth's interventionFootnote ³¹. From Cuba, Layseca of Havana coordinated shipments of sugar and tobacco to northern SpainFootnote ³². Likewise, Groning of Hamburg used to send German glasses regularly to Spain, to the likes of Rochelt Brothers (Bilbao), while Huffel of Hamburg supplied Antonio Prado from Rivadeo with many German manufactures. Beyond Germany, cheese from Amsterdam was often sent by Van Veen & Son to Rochelt Brothers of Bilbao and Adalid of Corunna.

In this vein, the Riga connection deserves a few lines. From the 1810s, Huth was an instrumental player in the flax-fiber trade from Riga to Galicia and Bilbao, at a time when this product ranked among the most important raw materials imported by Spain (Prados de la Escosura Reference Prados de la Escosura1982b, p. 184). This trade became so important that Riga's exports to Spain were one of the most important trades connecting Huth and Spain. This flax fiber was used in Galicia for the production of the famous Galician linens. From the 1810s, Riga houses consigned vast cargoes to Huth's contacts in Galicia and the Basque country. Mitchell & Co. became their main connection in Riga, but many other houses also became involved, with the volume of trade increasing significantly and remaining high during the 1820s-1840s. By 1829, for example, 12-15 cargoes of flax-fiber linked to Huth left yearly from Riga for SpainFootnote ³³.

However, Spain's exports to other destinations beyond Britain also benefited from Huth's global contacts. For example, wine was consigned by Sierra & Hermanos (Santiago de Compostela) or Vilardaga (Barcelona) to Huth's connections in Buenos AiresFootnote ³⁴. Likewise, once Huth had opened branch offices in both Peru and Chile, many of Huth connections in Spain were happy to supply their establishments on the West Coast. For example, Vilardaga & Reynals of Barcelona happily supplied wine to Callao and Valparaiso upon Huth's request.

Why did this Spanish dependence on the intermediation of Huth (and other London merchant bankers) and their network of contacts exist? Why were these Spanish merchants unable to trade directly with those foreign merchants beyond Spain and Britain? Why did they not simply use the services provided by merchant banks in Spain instead? This is a key theoretical question concerning the existence of merchant banks and in general of multinational trading companies (Jones Reference Jones1998, pp. 16-17). In turn, the lack of research on the functions performed by merchant banks may be a result of neo-classical economic theory treating firms (including merchant banks) as «black boxes» within a world in which there is no role for intermediaries because of the assumed existence of perfect information and enforcement (Jones Reference Jones2000, p. 4). The first half of the 19^th century, however, was quite different from a neo-classical world. Indeed, Spanish merchants used Huth (and other British merchants) as intermediaries, rather than searching directly for contracting partners, because international trade during this period required trust and good information about the import and export markets; trading internationally was risky. Chapman has already pointed to the fact that when communications were slow and difficult «the ultimate problem of the overseas merchant was maintaining understanding, policy and trust with correspondents» (Chapman Reference Chapman1992, p. 45).

Huth's unique global network and extensive product diversification (Llorca-Jaña Reference Llorca-Jaña2013) provided trust and information at a lower cost than could be procured in Spain, thus reducing risks: Huth greatly decreased search, negotiation and general transaction costs for Iberian businessmen. Huth specialised in overcoming these obstacles to trade on behalf of his correspondents in a world of informational asymmetries. Huth's impressive global network of contacts gave the firm at least a handful of trustable correspondents in every major port in which any Spanish merchant wanted to trade. This was known to Spanish merchants and they used Huth effectively. Furthermore, there were also language and cultural barriers to overcome. For example: if a Spanish merchant wanted German manufactures, how would he contact a supplier in Germany? In which language should the Spaniard write? In contrast, Huth was conversant with German, Spanish, English, Portuguese, French and even Italian. More importantly, Frederick Huth also knew hundreds of German manufacturers who trusted him, while he in turn trusted hundreds of Spanish merchants requiring German manufactures. Consequently, acting as a bridge between buyers in Spain and sellers in Germany (with previous payment of a commission) was relatively easy for Huth while it was very difficult for a Spaniard to do so directly. But perhaps equally importantly, these foreign trade operations required credit, and credit was scarce and dear in Spain, as is explained in the following section.

FINANCIAL AND OTHER SERVICES PROVIDED BY HUTH TO SPANISH MERCHANTS

The pivotal role played by non-banking institutions in supporting the expansion of international trade before 1850 has long been recognised. Merchant banks, in particular, played a crucial role by advancing monies to consigners of products all over the world. Without this form of credit, many international trade operations could not have taken place, in particular for countries lacking capital, such as Spain. Overall, the increasingly complex system of international trade that developed from the mid-18^th century depended largely on this provision of credit (Perkins Reference Perkins1975, pp. 8, 85-86; Chapman Reference Chapman1984, chapter 7, Reference Chapman1992, p. 46; Roberts Reference Roberts1992, p. 27, Reference Roberts1993, p. 23; Jones Reference Jones2000, p. 23). Indeed, after Huth became a merchant banker, the firm provided open credits and letters of credit to many of his Spanish connections, enabling them to trade with many parts of the world. The acceptance of bills of exchange became so important that for most London merchant bankers of the period accepting replaced trading as their main source of income (Jones Reference Jones2000, p. 23). In turn, Huth was one of the leading accepting houses of the period covered by this article, in particular for trades beyond the United States (Chapman Reference Chapman1992, p. 70). It was only Huth's international reputation, however, which allowed the bank to become a leading acceptor, and indeed only institutions with a sound reputation could enter the acceptance market (Chapman Reference Chapman1984, pp. 70-71; Jones Reference Jones2000, p. 23).

I have mentioned that one of the most important products traded between Spain and Britain during the period covered by this article was Spanish raw wool. To support this branch of trade, a great deal of credit was extended in London to Spanish suppliers. This trade, in turn, was also one of the most important branches of trade for Huth with Spain. Once the wool had arrived in Bilbao, San Sebastian, Santander or any other Spanish port, the Spanish wool suppliers were entitled to draw against Huth for a share of the value of the cargo at 90 days (a practice known as advances)Footnote ³⁵. Likewise, Haurie's shipments of wine to Britain were also made possible thanks to Huth's liberal advances, as was the case with many other Spanish exports. Huth charged a commission of just 1 per cent on the value of the drafts before accepting them (although a higher rate could be applied in cases of clients of lower standing or repute), but if the draft was not covered at maturity, then the commission would increase to 2.5 per cent. Often too, if the merchant enjoying an open «confirmed» credit with Huth did not use it, a commission of 0.5 per cent could be charged anyway, and if subsequently the credit was used, then the other 0.5 per cent was charged. In any case, the drafts could be cashed at maturity or discounted immediately after acceptance. That is, advances were money provided before sales had taken place or before remittances had been received. If the drafts were cashed after acceptance, the usual discount rate (given Huth's solid reputation) was very close to that of the Bank of England. These liberal credit facilities were not available in Spain to merchants exporting to Britain because Spanish enterprises were less creditworthy for bills payable in London. Likewise, the distinguishing feature of London merchant bankers of the period was a large capital linked with intimate knowledge of a particular market (Chapman Reference Chapman1992, p. 70). In Huth's case, the firm was unrivalled in Spain.

Furthermore, Huth also extended liberal credit to British exporters to Spain. A British textile manufacturer in, say, Manchester, would draw against Huth for the shipment of cottons to one of their correspondents in, say, Galicia, and then probably discount the bill immediately after acceptance. Thus the British manufacturer benefited because he was less exposed to the risk of selling directly to a foreign market (Chapman Reference Chapman1992, pp. 68-71). Huth would accept the draft because he trusted both the British exporter and the Spanish importer. In turn, the Mancunian exporter would not draw a bill against a merchant in Galicia (or in Madrid) because it was probably not discountable in either Britain or Spain, and certainly not payable in sterling as the Mancunian would have wanted. That is, a merchant banker resident in Spain would not be able to offer the same services offered by London merchant bankers because he would have been unknown to the British manufacturer.

Huth's advances, however, were extended to support many other trades linked to Spain and her colonies, even those which went nowhere near London. These included trades: (i) between Spain and her colonies; (ii) between former Spanish colonies and Spain; (iii) between Spanish colonies and former Spanish colonies; and (iv) between Spanish colonies and other markets beyond the Americas. For example, regarding the first case, sugar was sent from Cuba to Corunna, Cadiz and other Spanish ports thanks to liberal advances given by Huth to merchants in Cuba. Likewise, shipments of sugar from Manila to Spain received advances from Huth in London. Regarding the second case, cacao shipments sent from Venezuela to Santander or to other Spanish ports received advances from Huth. In particular, Bermudez of Caracas would draw against Huth for cargoes sent to Porrua Egusquiza of Santander, with drafts at 90-120 days, which had to be covered by Porrua Egusquiza at maturity. Finally, cargoes of hides from Buenos Aires to Spain also received Huth's generous advances.

Regarding the third case, extensive shipments of jerked beef from the River Plate to Havana received advances from Huth in London. Cuban sugar was also shipped to Chile and Peru using Huth's credit. Finally, in the fourth case, Huth also funded trade operations between Spanish colonies and other markets beyond Spain or the Americas such as continental Europe. For example, Embil of Havana was in the habit of sending sugar cargoes to Antwerp and St Petersburg funded by Huth's advances, and so did Mariategui and Drake, while Pastor of Havana consigned tobacco to Gaedechens of Hamburg after drawing bills of exchange against Huth as advances. To support these operations, Huth would open a credit account to the importer in, say, St. Petersburg in favour of the consigner in, say, Havana, and the latter would draw against Huth to settle his account with the consignee.

Perhaps more importantly, most of the strategic Riga flax-fiber trade was made possible thanks to Huth's credit. In this case the firm's agents in Riga would buy flax, ship it to Spain and draw against Huth. In London Huth would immediately accept these drafts. That is, indirectly Huth was extending credit to the Spanish merchants in Galicia receiving the flax-fiber. For example, Stresow & Sons and Jacobs & Co. would buy in Riga for Bengoechea (Rivadeo) or for Garcia in Santiago de Compostela. Before shipping the products they would draw against Huth on account of this flax, usually for up to two-thirds of the invoice value of the cargoes. Finally, the Spanish merchant receiving the flax would pay back to Huth the monies lent by Huth to the Riga merchants, ideally covering the drafts before maturity.

At this point an obvious question arises. Why were Spanish merchant bankers not able to offer the same credit services as those provided so extensively by merchant bankers in London? Or, alternatively, why did Spanish traders prefer Huth's credit to Spain's own credit facilities during the period covered by this article? We must remember that during the 1810s-1840s Britain was the world's largest trading nation as well as the largest capital exporter. Consequently, a great deal of the finance of world trade «was orchestrated in London and sterling was the main currency of international finance» (Chapman Reference Chapman1992, pp. 4-5, 41-42; Jones Reference Jones2000, pp. 2-3, 19-20). London had already overtaken Amsterdam as the premier centre of international finance and payments (Chapman Reference Chapman1984, p. 9). Therefore, London merchant bankers’ credit facilities were unmatched by financers in Spain because capital was more expensive in Spain.

We also know that during most of the 18^th century and the first half of the 19^th century, overseas trade within Europe and beyond was an elite activity because of the large amount of capital required to operate in this sector (Chapman Reference Chapman1992, pp. 27-28). Not only was ample capital needed, but also a sound international reputation. And indeed, on account of these two limitations, London merchant bankers during the 1810s-1840s consisted of a very small group of some 15 businessmen. Many of the merchant bankers’ advantages can certainly be explained by reputational asymmetries in international business (Jones Reference Jones2000, p. 6). In this respect, Huth's capital and international reputation would have been difficult to match by a merchant banker resident in Spain.

Moving beyond the provision of credit, it is known that another of the many roles performed by a London merchant bank during the first half of the 19^th century was dealing in bills of exchange, an activity which did not escape Huth's enthusiasm. In order to fulfil this role, the firm obtained acceptance in London for bills of exchange drawn anywhere in the world if they were drawn on a London house. If drawn in a currency different to sterling, Huth also negotiated exchange rates on behalf of their correspondents, including many Iberian establishments. Among Huth's principal Spanish customers were the Banco Español de San Fernando (predecessor of the Bank of Spain)Footnote ³⁶, whose director was none other than Joaquin de Fagoaga.

Furthermore, in 1844 Huth secured another important Spanish deal in bills of exchange after being appointed by the Banco de Isabel II as their representative on the London market. For a 0.25 per cent commission, Huth would get acceptance and negotiate exchange rates on this bank's behalfFootnote ³⁷. Unfortunately this bank only lasted a few years and disappeared during the financial crisis of 1847. Another of Huth's important clients was the Banco de Cadiz. Again, as for many other contacts in Spain, Huth obtained acceptance of bills in London, negotiated exchange rates, collected London bills endorsed in the Banco de Cadiz's favour, and credited them into this bank's accountFootnote ³⁸. Finally, it hardly needs pointing out that Huth's connections in Spain also performed in return the same services he carried out for them in London for bills of exchange drawn on Spain. For example, Serra Hermanos of Barcelona were entrusted to get acceptance in Catalonia for any bill of exchange drawn in Huth's favour.

Why did these Spanish banks need the financial intermediation of London merchant bankers? The answer is similar to the argument provided before: to obtain acceptance of bills in Britain on behalf of Spanish merchants Huth had a headquarters in London, a branch in Liverpool, confidential agents in many other British locations, dozens of experienced clerks (many of them specialists in Spain) and a sound reputation, which helped the bank to represent its Spanish friends against British banking institutions. Likewise, in negotiating exchanges between London and Madrid, Huth's expertise in both markets was unmatched by most competitors in either Spain or Britain, so that their friends in Spain could use Huth's information at a low rate.

The connections between Huth and Spanish businessmen take us again to the securities market. Two other important facts should be highlighted at this point. First, not only was the Spanish Crown interested in buying securities via Huth on the London market, many more Spanish businessmen resorted to their services to buy securities in the English capital. This usually included British and US securities, but there was also an interest in Spanish securities themselves, which were widely traded in London. For example, in the «Spanish panic» of May 1835, Spanish securities lost 30 per cent of their value on the London market, bringing ruin to many investors. Thereafter, many Spanish securities were also liquidated on British soil by Huth on behalf of Spanish businessmen. For example, Yribarren & Sobrinos often asked Huth to sell shares of the «empréstito nacional» on their behalf. Likewise, Gaviria was also in the habit of requesting Huth to liquidate «títulos españoles» and «cupones» in LondonFootnote ³⁹, many of which either belonged to the royal family or to Gaviria himself, given his proclivity to mix government with private business (López-Morell Reference López-Morell2005, p. 88). This is not surprising: after the restoration of Ferdinand VII, Spain's debt was issued in both France and Britain by eminent bankers, and therefore «Spanish» bonds were widely traded in both London and Paris.

Beyond the financial sector, Huth was also happy to provide any other reasonable service upon request. For example, in 1828 Spain imposed a very high import duty on lino coming from Riga if shipped in foreign vessels. By contrast, if imported in Spanish vessels the duty was reduced by around 50 per cent. Likewise, around this time, exports of flour from Spain to Havana in foreign vessels also had to pay very high import duties in Cuba, but if carried in Spanish vessels they were free of duties. Thus, many of Huth's contacts in Spain and Cuba asked him to buy British ships and send them to Spain to sail them under the Spanish flagFootnote ⁴⁰.

Huth also provided many of their connections with important postal services, at times when mail packet companies were not in operation on many international routes and communications were slow, expensive and unreliable. Many foreign merchants sent letters to Huth in London to be forwarded to diverse destinations. Such was the case of Porrua of Santander, who sent letters to La Guayra via Huth in London. In the opposite direction, merchants in distant locations would send letters to London for Huth to forward to various places. For example, Galceran of Havana was in the habit of sending letters to Manila via Huth in LondonFootnote ⁴¹. Finally, Huth also provided many other petty services, from buying lottery tickets for Lasa of HavanaFootnote ⁴², to purchasing London newspapers regularly for many merchants in Spain.

HUTH AS INSURANCE BROKER FOR SPANISH MERCHANTS

It is well known that merchants engaged in overseas trade were usually involved in marine insurance during the period covered by this article. Indeed, among the many commercial activities connecting Huth in London with Spanish merchants was that of marine insurance. Such was the importance of this function that it deserves to be treated in a section of its own. To start with, some preliminary comments seem pertinent. First, Spanish merchants requested Huth's insurance services because marine insurances could be procured in London on better terms than those available in Spain. London's marine insurance market was unrivalled across the world during the 1810s-1840s. Here again, since the firm was based in London, asymmetrical information was in Huth's favour, as Spanish traders preferred to pay him a small commission (0.5 per cent) to effect marine insurance on their behalf. Spanish traders used London merchant banks’ brokerage rather than the intermediary services of Spanish merchants based in Spain because the Spanish insurance industry was very underdeveloped before 1850Footnote ⁴³, and therefore could not compete with London. This meant that, sooner or later, a Spanish merchant offering insurance in Spain would need the services of an intermediary in London or a branch in that city if he wanted to remain competitive, and neither came free.

Second, judging from Frederick Huth's business correspondence, it is clear that he was extremely averse to risk and insured all trade operations in which he had any interest, and against all possible risks. This was the case throughout his career from his early years in London to the late stages of his enterprise. In turn, and perhaps because of Huth's extremely cautious attitude towards insurance, he managed to build a crucial reputation among London underwriters which gave the company a vast network of insurers to resort to, a network which would have been unavailable to a Spanish merchant operating from Spain.

Third, Huth arranged most, if not all, of the marine insurance of shipments between Britain and Spain in which the firm had any interest, either as a consignee or as a distant intermediary advancing funds. These included shipments of wool, wine and many other products from Spain to Britain and vice versa. Likewise, for shipments between Britain and the Spanish colonies, Huth was also happy to provide insurance brokerage. For example, the sugar cargoes sent by Vazquez Falcon Echarte of Havana to Britain were always insured by Huth in London, as were sugar shipments from Puerto RicoFootnote ⁴⁴. If advances given by Huth were involved, then a prerequisite for these operations to be financed by Huth was that he had to take out the insurance himself, since the merchandise consigned was taken as collateral. Because Spanish merchants used so much of Huth's credit, a logical consequence of this was that his insurance brokerage had to be widely used too.

In addition, Huth also effected marine insurance for a wide range of Spanish merchants for shipments from other places (i.e. outside Britain) to Spain (and her colonies) and vice versa. I am referring to trades, which never docked at British ports but were insured on the London market. For example, Huth insured cargoes on behalf of Adalid and Santos (both of Corunna) for shipments from Havana and Vera Cruz to Cadiz or CorunnaFootnote ⁴⁵. Huth would also insured shipments of hides and tallow from Buenos Aires to Spain. Likewise, even Brentano Urbieta in Hamburg would ask Huth to effect insurance for cargoes from Lima to Cadiz or to Hamburg, or from Hamburg to HavanaFootnote ⁴⁶. In the same vein, the flax trade between Riga and Spain was also insured in LondonFootnote ⁴⁷.

Overall, Huth's marine insurance services were of great consequence for Spanish foreign trade because without this service many Spanish traders would have been reluctant to engage in international trade. Huth & Co. not only advanced insurance premiums to Spanish merchants, but also made their vast network of contacts at Lloyds available in order to contract the insurance services requested from Spain. Thanks to this service Huth prevented the ruin of several Spanish merchants, since seawater damage was very common during this period, in particular for cargoes such as textiles, sugar and tobacco. Perhaps more importantly, shipwrecks were also very common, and often both ships and cargoes were completely lost. Such was the case of the Spanish ship San Jacobo, which was loaded with sugar from Havana to Corunna and Riga, but luckily was insured by Huth on behalf of many merchants, and for which they claimed £6,000 from the underwritersFootnote ⁴⁸.