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Sharps Pixley - A History

Sharps Pixley – A History
1778 – 2013
by Timothy Green

1778-1795: Diamonds at Batson's and Bank Coffee Houses

William Sharp started his diamond brokerage in 1778 at Batson's Coffee House in Cornhill by the Royal Exchange (where many brokers had their pitch). Sharp favoured Batson's until 1786, when he shifted to Bank Coffee House, operating there for a decade. The diamond trade in London reached its zenith in the late 18th century, spurred by the East India Company's links with India, the prime source, and this probably encouraged William Sharp to become a dealer.

1796-1804: Office in Winchester Street and partnership

In 1796 Sharp took an office at 32 Winchester Street (later Great Winchester Street), where the business remained for over 180 years. Initially he was listed as 'merchant' but in 1800 was 'diamond broker, broker & auctioneer', indicating diversification as the diamond trade had declined. In 1804 he took a partner, Joseph Kirkup. Sharp & Kirkup traded as 'diamond and pearl brokers and auctioneers'. Kirkup was a jeweller in New Bond Street in the 1790s and probably joined Sharp in 1800, gaining partnership in 1804. William Sharp's son, James, was also learning the business.

1805-1816: Bullion brokers but denied Bank of England recognition

In 1811 Sharp & Kirkup embarked on bullion broking, but an application for acceptance as broker at the Bank of England was refused. Mocatta & Goldsmid retained their long held exclusive post as the Bank's broker for another 30 years, despite repeated appeals by Sharp, Nathan Mayer Rothschild and other bankers. Even so, Sharps had a turnover of £47,000 in 1812, equal to nearly 200,000 t.oz. of silver. Silver from Mexico became their main focus. James Sharp, who had probably now taken over from his father William, worked closely with Nathan Mayer Rothschild selling him silver and advising him on diamonds. In 1815 the firm was listed 'Jewel and bullion brokers'. William Sharp and Joseph Kirkup died about this time.


Mr Stewart Pixley, Bullion, 25 January 1890, Vanity Fair Cartoon

1817-1839: James Sharp in charge, silver business flourished

All London directories for 1817 report 'James Sharp, jeweller and bullion broker, 32 Winchester Street'. He led the firm until 1839, with his son, Granville Sharp, becoming joint partner in 1821. They cultivated Mexican silver mining companies. "You may rely upon our obtaining the highest market price," wrote James Sharp, "and upon our attention to the melting, assaying and other requisite details." By 1825 turnover was £500,000 (around 2 million t.oz.) and reached £1 million in 1830. In 1835 Sharps, backed by miners and banks, again sought Bank of England recognition, but was rebuffed. Business, however, thrived. Turnover reached £1.8 million in 1837, aided by deals in Brazilian gold with Percival Norton Johnson, 'father' of Johnson Matthey.

1840-1849: Bank of England accreditation and new partners

After James Sharp's death in 1839, Granville Sharp led the firm, making it a new partnership, J. G. & G. A. Sharp, in 1842. They benefited from the Bank of England having finally opened its doors in 1840 to 'any sworn broker in the purchase and sale of gold bars'. A major change came in 1847, when Frederick Charles Wilkins joined the partnership, now Sharps & Wilkins. However, both Sharps died shortly afterwards (perhaps the reason for Wilkins joining if they were in poor health). The Sharps name, known in the City for over 60 years, was retained, although there has now been no family connection for over 150 years. The business was run by Frederick Wilkins, then his son and grandson, for the next 90 years. His immediate challenge was the gold rushes in California in 1849 and Australia in 1851.

1850-1870: A new market born of the gold rushes

British gold imports in 1848 were 432,000 t.oz., by 1853 they were 3.3 million t.oz. The London Market was hard pressed. Within five years new brokers, assayers and refiners opened. Sharps & Wilkins' profits shot up from £4,980 in 1847 to £14,523 in 1853. They faced competition. In 1852 Stewart Pixley, a senior clerk in the Cashier's Office at the Bank of England, opened a partnership with Henry Haggard, son of the principal of the Bullion Office, at 8 Copthall Court. They moved to 27 Old Broad Street in 1857, staying there until 1929. Haggard soon left and Stewart Pixley took several other partners before settling with Henry Gibson Abell in 1872 as Pixley & Abell, which remained until 1957, when they merged with Sharps & Wilkins as Sharps Pixley. Another newcomer, Samuel Montagu & Co., bankers and bullion brokers, opened in 1853. They completed the line-up of Sharps & Wilkins, Pixley & Abell, Mocatta & Goldsmid and Samuel Montagu that was at the heart of the market for the next hundred years. An alliance was also made in 1861 when Edward Matthew, a junior partner at Johnson Matthey's refinery, married Frederick Wilkins' daughter, Alice Elizabeth. Two of their children later joined Johnson Matthey, forging a special relationship between broker and refiner. The gossip was that Matthey gave Sharps preference in marketing refined gold.

1871-1897: Gold for India, seeking American silver, the silver fixing

Stewart Pixley proved an aggressive rival. He won much of the 10-ounce 998 gold bar business with India, ordering from Johnson Matthey's new refinery. He also kept close track of silver, whose price fell 50% between 1850 and 1900 as European nations turned from gold and silver. In pursuit of American silver, he took a train to Montana (his great-grandson prized the ticket a hundred years later) and bought a stake in the Drum Lummon mine. However, Frederick Wilkins (son of the first 1847 partner) had retained the connections with Mexican and South American mines that James Sharp had fostered half a century earlier. Wilkins gave a precise analysis of silver output in Mexico (the foremost producer) to the 1876 House of Commons Select Committee on the Depreciation of Silver. The firm's status as silver broker also secured them the chairmanship of the London Silver Fixing, which was held in their office at 32 Great Winchester Street, from 1897. They were joined by Mocatta & Goldsmid, Pixley & Abell and Samuel Montagu & Co. at 1.45 pm Monday through Friday and 11.45 am on Saturday.

1898-1918: Riding the Indian silver tiger

The challenge for the London silver market after 1900 was buying for Indian coinage, while outwitting Bombay speculators. Sharps & Wilkins, now under Philip Wilkins, together with Mocatta & Goldsmid, were charged with rounding up 55 million ounces (one-third of world output) in 1900 and 150 million ounces in 1905/6 (half world production). Indian speculators tried to corner even more, to profit from a fast rising price. The entanglements tested all the brokers. Sharps was caught out not taking adequate margin from an Indian client, but the other brokers rallied to the firm's support. The resulting Indian Bazaars Margin Agreement of 1914 between all four brokers stabilised the market.

1919-1939: The gold fixing and a turbulent era for gold

Mutual co-operation was also signalled by the first London Gold Fixing at N. M. Rothschild's in September 1919. A Rothschild memo noted, "The four bullion brokers, Mocatta & Goldsmid, Pixley & Abell, Sharps & Wilkins, and Samuel Montagu & Co., were given the opportunity of bidding and would obtain their requirements if the price they bid equalled or exceeded the realization price fixed by Rothschilds". The collapse of the gold standard in 1931 and subsequent price rise to $35 an ounce in 1934 gave the brokers hectic years coping with dishoarding from India matched by hoarding of coin and small bars in Europe. The fourth Stewart Pixley recalled as a young man hustling to Croydon Airport with boxes of sovereigns for the Paris plane. Silver's price also doubled in 1935, leading to European and Indian selling, with the United States the sole buyer. The silver fixing at Sharps & Wilkins often lasted until late afternoon, while the assembled brokers played bridge until the US Treasury woke up with orders. That ended abruptly with war in 1939 which virtually shut the market.

1939-1966: New era for gold brings new partnerships

The London Gold Fixing resumed in 1954 with the four historic partners. But it was a different world of central bank deals and large Russian sales, hardly suited to small private partnerships forged in the 19th century. First Mocatta & Goldsmid was acquired by Hambros Bank in 1957. Four months later Sharps & Wilkins and Pixley & Abell merged into a private unlimited partnership, Sharps Pixley. The partners were Louis Balfour (a Sharps partner since 1916), Stewart Pixley, grandson of the founder of Pixley & Abell, with his son, also Stewart. The Pixleys moved into Sharps' offices in Great Winchester Street. The alliance did not immediately seek a financial backer but, in 1966, became wholly owned by Kleinwort Benson, the merchant bankers.


(image courtesy of the LBMA)

PHOTO (Clockwise From Left) - Alan Baker, Nigel Munt, Ernie Watkins, Linda, Chris Andrews, Roy Carson, Scott Craig, John Clark and John Coley

1967-2010: Round-the-world markets, dissolution and re-birth

Stewart Pixley, great-grandson of the firm's founder in 1852, took Sharps to Hong Kong in the 1970s establishing the loco London gold market there, along with market-makers from London, Swiss, German and US banks. In a market now dominated by international banks, Deutsche Bank bought Sharps Pixley from Kleinwort Benson in 1993. Deutsche Sharps Pixley was run until 2001, although the trade name Sharps Pixley Ltd, which expired in 1995, was bought in 1998 by Ross Norman, who has now revived the business first created by William Sharp at Batson's Coffee House over 230 years ago.

2013 + : Expansion and Global Reach

Degussa Goldhandel Group acquired Sharps Pixley Ltd on the 5th November 2013. The acquisition of Sharps Pixley brings together two of the leading and historical bullion names and it underscores Degussa's future ambitions to play a major role in international gold trade. "London remains the global centre for gold trading at the interbank level, yet it remains remarkably difficult for investors to source the physical metal. Our ambition is to increase both the visibility and access to this important asset class" announced Degussa CEO Wolfgang Wrzesniok-Rossbach and Sharps Pixley CEO Ross Norman in a joint statement.

Sources:

Guildhall Library, London, Street Directories
Ledgers of Sharp & Kirkup, Archives of Messrs Kleinwort Benson Ltd
The Times, Gold, Reprint of the Special Number, June 20, 1933
Timothy Green, The World of Gold, 1968, Michael Joseph, London
Timothy Green, Precious Heritage: Three Hundred Years of Mocatta & Goldsmid, Rosendale Press, 1984
Timothy Green, The Ages of Gold, GFMS Ltd, 2007
Gedalia Yogev, Diamonds and Coral, Anglo-Dutch Jews and Eighteenth Century Trade, Leicester University Press, 1978

© Timothy Green, 2010. Timothy Green has been writing about the London Gold Market since 1966, when he first interviewed Sharps Pixley. His latest book is The Ages of Gold, published by www.GFMS.co.uk.

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