At the height of British foreign direct investments, the London capital market handled £4.5 per capita of British savings per annum of an average income of £40.Footnote 1 The most common mode of investment was the “free-standing company,” which Mira Wilkins described as forming “clusters” of “overlapping circles of individuals” that were “too partial and too weak” to be considered multinational enterprises.Footnote 2 Investment groups characterized by Stanley Chapman as an “entrepreneurial or family concern whose name and reputation” were leveraged to float overseas enterprises, also played a crucial role.Footnote 3 Geoffrey Jones argues that “interlocking directorships” provided a competitive advantage by limiting information asymmetries.Footnote 4 Research has focused on large free-standing companies and investment groups, particularly in Latin America, where the term “business group” has become common to describe these interconnected interests.Footnote 5
Free-standing companies were the most important component of British overseas investment, particularly in Latin America, where, as Rory Miller highlights, investments “consisted of hundreds of apparently independent enterprises” floated separately as joint stock companies.Footnote 6 To attract investment, the national political economy was tailored to become what Peter Cain and Anthony Hopkins described as “compliant satellites” of the British capital market.Footnote 7 This involved cultivating relations with what John Gallagher and Ronald Robinson term local “collaborative elites,” similar to the risk management strategies in high-risk jurisdictions identified by Mark Casson and Teresa Da Silva Lopes.Footnote 8 Leaders such as Porfirio Díaz in Mexico (Porfiriato, 1876–1911) and Rafael Reyes in Colombia (Quinquenio, 1904–1909) presided over booms of foreign direct investment through free-standing companies.Footnote 9 In Mexico, investment rose from $13 million to $800 million, and foreign companies increased from 17 to over 500 by the end of the Porfiriato in 1911.Footnote 10 While John Gallagher and Ronald Robinson’s “collaborating elites” aided British enterprise in Latin America, Peter Cain and Anthony Hopkins’s “gentlemanly capitalists” held positions of command and influence within groups of free-standing companies, and investment groups.Footnote 11
Peter Cain and Anthony Hopkins argued the gentlemanly capitalist social group was a driving force behind British imperialism, and the mechanisms of control they employed conform to both John Gallagher and Ronald Robinson’s “informal empire” and Christopher Platt’s “business imperialism.” Despite their importance, individual gentlemanly capitalists have seldom been analyzed within business history. The nature of their investment portfolios as well as their control and influence over free-standing companies, investment groups, and business groups broadly defined remain poorly understood. To address this gap and respond to Gareth Austin, Carlos Dávila, and Geoffrey Jones’s call for an “alternative” business history of emerging regions, this article explores the case of Shirley Jenks, a British gentlemanly capitalist who constructed a business empire in early twentieth-century Colombia. Jenks’s empire fits the framework provided by these authors for a “diversified business group” composed of free-standing companies operating in an unstable jurisdiction subjected to “extended turbulence” and aided by “illegal and informal forms of business.”Footnote 12 Previous academic inquiry has largely focused on studying individual free-standing companies or the networks of individuals that formed investment groups, particularly through the phenomenon of interlocking directorships. In this article, Jenks’s companies are broadly defined as a “business group,” a term that aligns with Gareth Austin, Carlos Dávila, and Geoffrey Jones’s terminology and, in the context of the case analyzed here, represents a collection of legally independent firms operating across diverse industries, under centralized control and common ownership.
The case contributes to two important theoretical frameworks. First, it adds to our understanding of British business groups, which, as Geoffrey Jones demonstrates, depended heavily on connections with local elites to develop a “quasi-local” status for legitimacy and on financial market access for their formation and survival.Footnote 13 However, unlike the business groups analyzed in Geoffrey Jones’s study, Jenks’s enterprises operated with minimal local presence, relying instead on sophisticated networks of individuals in both London and Colombia, illustrating the importance of individual case studies of smaller British business groups overseas. Second, the case provides a clear example of Raymond Vernon’s “obsolescing bargain” theory in action.Footnote 14 As with Weetman Pearson in Porfirian Mexico, Jenks’s initial success in leveraging political connections to build his business empire ultimately made his assets more attractive targets for nationalization as the political climate shifted against foreign investment.
The study of the influence of this kind of business enterprise in Latin America has a history stretching back to the work of Fred Rippy and Christopher Platt predating the development of the concepts of free-standing companies and “investment groups” by Stanley Chapman and Mira Wilkins.Footnote 15 Particularly informative examples include the nitrate industry in Chile, the Peruvian Corporation, or Argentine railways.Footnote 16 Stanley Chapman contends the business strategy of investors within such enterprise was to obscure “the real economic strength of the group … from the public” resulting in their existence and inner workings remaining opaque.Footnote 17 Examples of single individuals using groups of free-standing companies to construct business empires are scant. Those cases most closely resembling the economic power of American multinational enterprise were generally limited to a single trade or sector, although Weetman Pearson’s diverse interests in Porfirian Mexico provides a notable exception.Footnote 18 The free-standing company, when arranged and coordinated in strategic fashion, provided opportunities for British gentlemanly capitalists to develop business empires in Latin America. But analyzing such groupings of companies in the region has been hindered by a lack of source material since only archives of a few railway companies, important banks, and merchant houses have survived intact.Footnote 19
Colombian business history has come a long way since Carlos Dávila described it as “in its early stages,” but within the ambit of foreign investment, the United Fruit Company has had enjoyed an inordinate degree of attention within the literature, heavily influenced by the 1928 massacre of banana workers depicted in Cien Años de Soledad.Footnote 20 From a broader panorama, business history has focused heavily on American interactions with Colombia, with particular attention given to the oil sector.Footnote 21 Within the national Spanish language, themes such as local elites, gold mining, the export sector, and transportation have garnered attention.Footnote 22 Despite the strong influence of British owned enterprises in transportation and mining, scholarship on these is sparse, with a detailed study of the British owned Manizales–Mariquita aerial cableway representing a notable exception.Footnote 23 Recent studies have analyzed individual British railway companies, but the extent to which these ostensibly independent companies were linked by interlinked shareholders or directorships remains unknown.Footnote 24 This study builds upon these as well as earlier studies that have addressed the role of business in the development of transportation infrastructure in Colombia.Footnote 25
This article addresses a lacuna by exploring a previously unstudied corporate grouping of British free-standing companies formed by Shirley Jenks, which operated in Colombia during the early twentieth century. The case is atypical because its business interests do not conform to Stanley Chapman’s characterization of being amassed by leveraging name and reputation, and it occurred in a country in which British influence has been hitherto characterized as being largely absent.Footnote 26 The study details how one individual gained significant influence over the Colombian economy through free-standing companies, corporate debentures, and sovereign bonds, illustrating how the gentlemanly capitalist class could leverage economic power over peripheral regions through London capital market mechanisms, despite a limited personal footprint locally.Footnote 27 Detailed analysis is enabled by a personal archive left by Jenks, held privately by his accountant’s family.Footnote 28 The case contributes to the literature by exploring the distinct mechanisms of control employed by Jenks, differing from other cases of British economic imperialism in the region, such as the São Paolo Railway and the Peruvian Corporation, which applied economic pressure to host countries in a more visible manner, and in the words of Christopher Platt held “a nation to ransom.”Footnote 29
Colombian Context
The Jenks business group appeared in Colombia in the context of a long, tumultuous, and largely unsuccessful period of commercial relations between Colombia and Britain. This began in the 1820s with the Colombian Mining Association and sovereign loans that resulted in Colombia’s default on over £6 million of bonds and the failure of the Santa Ana silver mines.Footnote 30 British investments in Colombia remained modest and focused on the mining sector until the late 1880s, when British railway companies were established to operate short railways constructed by Cuban-American engineer Francisco Javier Cisneros.Footnote 31 Colombia had become an increasingly important coffee exporter, and British-registered railways, including the Colombian National Railway Company, the Dorada Railway Company, and the Barranquilla Railway and Pier Company, primarily served the export sector.Footnote 32
By 1899, when the Jenks family’s business interests began to develop, British companies had achieved varying degrees of success in Colombia’s railway and mining sectors. The Tolima Mining Company was perhaps the most successful British mining enterprise, extracting £1.32 million of silver from mines in the region of Tolima between 1871 and 1900, a feat the ill-fated Colombian Mining Association had failed to achieve in the 1820s.Footnote 33 In the railway sector, the Barranquilla Railway and Pier Company, which served the export trade of the interior, had established a highly profitable monopoly, providing over 9% returns on invested capital by the late 1890s.Footnote 34
Colombia’s commercial relationship with Britain was influenced by fluctuations in national politics throughout the nineteenth century. The liberal government successfully serviced interest payments on the sovereign debt after renegotiating terms with its bondholders through their agent, Barings bank, allowing fresh borrowing.Footnote 35 However, during the Regeneración (Regeneration) of Rafael Nuñez, which ushered in the “conservative hegemony,” an unbroken four and a half–decade period of conservative party governments, the sovereign debt was reneged upon for two decades. Nuñez believed that Colombia should prioritize its domestic needs over debt repayment.Footnote 36 This perspective contrasted sharply with that of Nuñez’s contemporary, president Porfirio Diaz of Mexico, who transformed the country from a serial defaulter and “pariah” into a model debtor, attracting significant private sector investment in the Mexican railway sector.Footnote 37
The collapse of the Antioquia Railway project in the early 1890s, known as the Punchard–McTaggart–Lowther affair, exemplifies the impact of the abrupt policy change toward sovereign debt on the private sector. British contractors were unable to secure a £1.25 million loan in London for the project owing to Colombia’s pariah status in financial markets resulting from Rafael Nuñez’s policies. The situation was further complicated when Santiago Pérez Triana, the contractors’ local agent who would later become a close associate of Jenks, was accused of embezzlement and forced to flee the country via the Orinoco River on route to London, leading to lengthy legal proceedings in the international court of arbitration in Lausanne, Switzerland.Footnote 38 This event strained relations between Britain and Colombia within the railway sector. The fallout also provided an influential Colombian resident in London who could subsequently bridge the gap between British investors and the local elite community.
From 1899 to 1902, Colombia was embroiled in the War of a Thousand Days, a protracted civil war that paralyzed commerce and left the national economy devastated. In its weakened state, Colombia also suffered from the ambitions of the United States, which supported the secession movement in the Department of Panama, leading to the loss of one of the country’s most prosperous and strategically important territories in 1903. This loss would “reproach the consciousness of a whole generation” and heavily influence subsequent politicians’ perceptions of relations with imperial powers such as the United States and Britain, culminating in a growing distrust and wariness of foreign investment in the following decades, which significantly impacted the evolution of the railway sector.Footnote 39
General Rafael Reyes’s administration, known as the Quinquenio (1904–1909), was a project of national reconstruction in the face of sustained national crisis. As a conservative military hero who had not participated in the most recent civil war, Reyes found it straightforward to come to terms with Liberal leaders.Footnote 40 His administration was characterized by an “unequivocal championing of foreign investment” and sought to “integrate Colombia into the dynamics of international capitalism,” and as such worked as a direct counterweight to the broader growth of skepticism toward foreign capital inspired by the loss of Panama.Footnote 41 Similarly to his contemporary Porfirio Diaz in Mexico, Reyes believed in the power of foreign investment and railways to bring “civilization” and “progress.”Footnote 42 The British financial press praised Reyes, describing him as different from his “ignorant” countrymen who presented “foolish obstruction” to British investment, fearing that the country was being “fleeced.”Footnote 43 When Reyes fell from power, London financiers expressed disillusionment, citing his similarities to Porfirio Diaz and their hope that he would have done for Colombia what Diaz had achieved in Mexico.Footnote 44 The Jenks business group was formed within the context of these political currents.
It is important to note that, during the period in question, Colombia remained a high-risk environment for foreign direct investment, even within the broader regional context. British investors’ experiences have been described as “rainbow chasing” by naive investors and generally characterized as unsuccessful.Footnote 45 Colombia was inhospitable for several reasons, including repeated defaults, unstable property rights, rugged terrain, a national economy dependent on “speculative production” of tropical export goods, repeated civil wars, and unpredictable political fluctuations in the century following independence.Footnote 46 Commentary from the investing community during the formative years of the Jenks business group described the country as “a misgoverned state, in a perpetual state of revolution, and as a place to be avoided, as the grave of all capital which anyone was foolish enough to invest in.”Footnote 47 Although there were successful British enterprises in the country in the latter part of the nineteenth century, they were the exception rather than the rule. It was within this challenging environment that the Jenks group would develop their business strategies and risk management approaches.
Origins of the Jenks Business Group in Colombia, 1899–1904
The origins of the Jenks group in Colombia align with Chapman’s concept of a British “investment group” evolving from a “family concern.”Footnote 48 While the Jenks were said to be “not of high standing” in the City of London, they established significant business interests in Colombia beginning with Henry Jenks’s October 1899 purchase of a railway concession in the Department of Cundinamarca.Footnote 49 This railway, which was to connect Bogotá with the Magdalena River port of Girardot, was reorganized as the Colombian National Railway Company, and Jenks raised £600,000 in 6% debentures in London to finance it.Footnote 50 The concession had been sold by Juan Bautista Mainero y Trucco, a local entrepreneur described by Luis Fernando Molina-Lodoño as astute and aggressive, who had acquired it in January 1898.Footnote 51 Jenks’s purchase proved ill-timed—while he claimed to have bought “before the news of a revolution… was published in England,” the Foreign Office noted that by mid-1899 there were already “evident signs of a forthcoming revolution.”Footnote 52 This lack of local intelligence led to the naive acquisition of a concession from a better-informed Colombian businessman just before a civil war that would significantly depreciate the railway’s value.
The war was catastrophic for the company, as its installations were “a constant scene of fighting.”Footnote 53 The damage sustained was described in detail: “wooden bridges … [were] repeatedly burnt and destroyed, … locomotives … [were] dismantled of the most important parts, … the telegraph line … [was] destroyed.”Footnote 54 Troops broke into the company’s stores, requisitioning customers’ goods, and seized mules and horses from its coal mine in Tocaima. Harm to the company was not only physical, since interest on the debentures had a long-term impact on the financial viability of the company.Footnote 55 Henry Jenks made a claim for compensation for the government’s inaction in defending company property (Table 1).
Table 1 Henry Jenks’s Claim for Compensation
Source: “Claim of the Colombian National Railway Company, Limited,” 1 Oct. 1903, FO55/415, The National Archives, Kew, f. 244.
The Foreign Office feared such a claim would create an association in the minds of Colombian elites with the aforementioned Punchard–McTaggart–Lowther affair, which in previous years had soured British–Colombian relations and stirred mistrust of British railway interests.Footnote 56 Minister resident George Welby feared circumstances would “fill … [the] government with mistrust … [of] all connected with [Jenks] and his company.”Footnote 57 Henry Jenks acknowledged that “a claim of such magnitude might … make them at first very angry.”Footnote 58 Jenks had aspirations to expand the railway to the Pacific coast to construct a monopoly over trade from the west of Colombia, which would become increasingly important once the Panama canal opened Pacific ports to Atlantic sea traffic. He wished to exert “pressure” on the national government “to get what we have asked for in the concession of the port of Buenaventura, the Cali railway, the railway bridge over the Magdalena and the Sabana railway.”Footnote 59 The claim for compensation was unsuccessful, and the experience of the Jenks in their first 5 years of operations in Colombia was wholly unsuccessful. Welby commented that “this has certainly been a most unfortunate venture for him … [the railway] has been mostly in the hands of the revolutionists during the whole war … one cannot but feel sorry for him.”Footnote 60
The Bonanza of the Quinquenio, 1904–1909
Henry Jenks first established business interests in Colombia, but his son Shirley converted them into a business empire. Shirley was born in 1881 and was educated at the prestigious Shrewsbury School. He trained in law and worked as a London barrister in the early 1900s.Footnote 61 Shirley began working for his father in 1905, taking over formal control of the firm in 1907.Footnote 62 Shirley Jenks’s career in the city coincided with the negotiation of the Holguin–Avebury agreement in 1905, which rehabilitated Colombia’s credit overseas, initiating a wave of British investment in the private sector.Footnote 63 The Jenks floated several companies related to steam boat navigation on the Magdalena River, supporting the family’s interests in the Colombian National Railway Company, as well as the newly acquired Cartagena Railway, for which the firm promoted stock and securities following its flotation in 1906.Footnote 64 The Girardot Steamboat Company was floated the same year, serving the upper portion of the Magdalena River between the fluvial terminal of the Colombian National Railway Company in Girardot and the Dorada Railway Company’s river terminals in Arrancaplumas, Honda, and Ambalema.Footnote 65 The Dorada Railway Company was controlled by a separate group of British investors, including some of Britain’s wealthiest families, and linked the upper and lower sections of the Magdalena River.Footnote 66 Subsequently, the Jenks acquired the American-owned Compañia Fluvial de Cartagena and floated it in London as the Magdalena River Steamboat Company.Footnote 67 This linked the Dorada Railway Company’s fluvial terminal on the lower portion of the Magdalena River at La Dorada and the Cartagena Railway’s fluvial terminal on the Magdalena River at Calamar.
The Jenks business group had secured a monopoly on the trade route between Bogotá and Cartagena, with the Dorada Railway Company, a British company since 1888, being the only break in the chain.Footnote 68 This put the Jenks business group in competition with Louis Gieseken, a German émigré who operated a river transportation business in Barranquilla.Footnote 69 During the Quinquenio, the Jenks and their German competitors consolidated their operations, creating a “duopoly” with the German interests under the Empresa de Navigación Louis Gieseken.Footnote 70 Shirley Jenks consolidated the river boat interests and the Cartagena railway into the Colombian Railways and Navigation Company in 1909. Their role was not as monolithic as hitherto considered within the literature, since rather than owning the company outright, they were influential in promoting the company’s securities in London, making considerable sums in the process.Footnote 71 Later that year, the Colombian Railways and Navigation Company acquired the German business, forming a strong transportation monopoly from Bogotá to the Caribbean ports of Cartagena and Barranquilla.Footnote 72 As early as 1903, Henry Jenks sought a concession to extend their railway to the Pacific coast, anticipating increased trade from the subsequent completion of the Panama Canal, which was in the process of being built.Footnote 73 In 1908, Shirley temporarily held a concession for the Ferrocarril del Pacifico project, seeking to raise £2.6 million in London, but it quickly reverted to a state-led project.Footnote 74 By the end of the Quinquenio, the Jenks business group had financed companies and controlled concessions covering transportation between Colombia’s interior and its three most important seaports.
The Jenks business group’s transportation interests directed a larger share of the interior’s export trade through Cartagena. Jenks positioned himself to benefit from the city’s growth through the Cartagena (Colombia) Waterworks Ltd., which acquired a 50-year concession for the city’s potable water supply in 1905 for £55,000.Footnote 75 The water supply was an adjunct business using the railway’s existing infrastructure, as the fresh water was “taken from springs situated near the railway at points 8 to 10 miles distant from the city … which produce a constant supply of good clear drinking water.”Footnote 76 This water would be supplied to ocean-going vessels through the railway’s port infrastructure, providing an additional revenue stream. The infrastructure works were estimated at £39,770, bringing the total outlay to £94,770.Footnote 77 The company was expected to be highly profitable from the start, as the supply was “high above the level of the city, … the cost of pumping … [would] be entirely avoided,” limiting expenses to “supervision and maintenance of pipeline, mains and reservoirs.”Footnote 78 By 1908, at the end of the Quinquenio, the company reported its income as “increasing in leaps and bounds.”Footnote 79 In November 1913, Shirley Jenks addressed shareholders, emphasizing the concession’s 42-year duration and the potential for steady growth, as the company was “not yet supplying water to one-half of the houses in Cartagena.”Footnote 80
In 1908, the Jenks ventured into another sector by floating the Colombian Mining and Exploration Company, which was awarded a concession to exploit the historic Marmato gold mine in Caldas.Footnote 81 The mine was so significant that it had been used as security for Colombia’s sovereign loans in the 1820s.Footnote 82 Jenks achieved this feat through his close ties with the Reyes administration, as the company’s directors included Jenks, Frank Dodd (secretary of the British Bank of South America), and Alfredo Vasquez Cobo (Reyes’s Minister of Foreign Affairs).Footnote 83 Jenks’s engineer brother, Norman, who lived in Colombia, served as a director, local manager, and mining engineer for the company and was more broadly influential as the business group’s local agent.Footnote 84 Although Shirley later disparaged Norman’s role, he was crucial in expanding the company’s portfolio into the oil sector, with his contributions having been said to “take too long” to outline to shareholders.Footnote 85 Norman was praised for outdoing Weetman Pearson by securing options on oil properties against competition from influential American groups.Footnote 86 This suggests that British failure in the sector was not as complete as Marcelo Bucheli’s prior study indicates, and Jenks’s connections in Colombia, compared with Pearson’s lack thereof, influenced the latter’s failure.Footnote 87 The oil assets were transferred to the Coastal Oilfields of Colombia, whose board shared interlocking directorships with Jenks’s Cartagena (Colombia) Waterworks Ltd.Footnote 88 Initially, the oilfield seemed as promising as Standard Oil’s, and by 1921 the firm were in negotiations with Shell, which were said to be “proceeding in a very friendly and satisfactory manner,” to bring the field into production.Footnote 89 However, the enterprise ultimately failed owing to “enormous gas pressure” and the absence of oil in the Tubará oilfield.Footnote 90
The success in building the groups’ assets relied on the relationship forged with Rafael Reyes and his administration. Jenks was able to attract political support for the Colombian National Railway Company project, securing government guarantees on debenture issuances: £430,000 in 1907 and £450,000 in 1908. This support was to the detriment of other British projects such as the Great Northern Central Railway of Colombia in Santander, whose director lacked the same connections within Colombia’s elite and negotiated naively.Footnote 91 While these connections enabled Jenks to raise capital, they came at a significant cost. The questionable nature of the relationship was exposed in the Apulo works controversy. Reyes had authorized the first debenture emission on the condition that £30,000 would fund a luxury hotel and recreational facilities in Apulo.Footnote 92 The government purchased these bonds at a 30% discount for £21,000, with the proceeds handed directly to the Minister of Hacienda, Camilo Torres Elicechea.Footnote 93 In 1910, a year after Reyes’s administration collapsed and he “sailed off into exile,” he and Torres were accused of embezzlement.Footnote 94 The investigation revealed no safeguards to account for the £21,000 received by Torres Elicechea.Footnote 95
The Apulo works controversy illustrates how informal relationships with local elites could negatively impact business performance since £30,000 of the capital raised through—debentures upon which interest payments were due—was diverted to a side project that served primarily as a vehicle for rent-seeking by local officials rather than contributing to the railway’s core infrastructure development. Despite these costs, the relationships proved profitable for Jenks. In the 1908 emission alone, he received £257,142 of debentures at a 30% discount in lieu of £180,000 the firm had advanced the company, allowing him to sell them on the open market for a significant profit.Footnote 96 This relationship resembles Weetman Pearson’s relationship with Mexican President Porfirio Diaz and aligns with the concept of collaborating elites and risk management tactics used by firms in high-risk areas.Footnote 97 Indeed, Jenks amassed a fortune during this period: In 1908 alone, when the second set of debentures were raised and the river navigation interests were reorganized, he claimed an annual profit of £600,000, equivalent to £66.65 million today, at a time when an annual income over £100,000 placed one among Britain’s top 100 “super-rich.”.Footnote 98
The scale and complexity of Jenks’s business operations relied heavily on a network of strategic relationships spanning both the private and public sectors in Colombia and London. Tables 2 and 3 provides a systematic overview of these key figures and collaborating elites who were instrumental in the business group’s development and operations through various formal and informal roles. These relationships illustrate how Jenks maintained influence across company directorships, financial dealings, and political connections, enabling him to coordinate activities across multiple enterprises while managing risk in an unstable jurisdiction.
Table 2 Collaborating Elites and Local Agents Associated with the Jenks Business Group, 1899–1929
Sources: Villamizar, Negocios; Torres Elicechea, Fondos.
Table 3 Gentlemanly capitalists associated with the Jenks Business Group, 1899–1929
Sources: Cartagena (Colombia) Waterworks, Financial Times, 14 Mar. 1906; particulars of the Colombian Mining and Exploration Company, Limited, Financial Times, 12 Dec. 1908; the British Bank of South America, Limited, Financial Times, 30 Aug. 1912; Colombian Mining and Exploration, Financial Times, 3 November 1920; Colombian Mining and Exploration, Financial Times, 13 Jun. 1919.
The business group’s operations relied heavily on sophisticated networking through multiple channels, often obscured from view. As former Colombian National Railway director Rafael Villamizar later revealed, Jenks worked through various fronts including the “Z.A.L. Syndicate” when direct dealings would attract opposition.Footnote 99 Villamizar’s switch from associate to critic of Jenks illustrates how dependent he was on informal relations with local elites and how the souring of these contributed to his downfall, as the publication of Negocios colombianos “Jenks” marks the beginnings of his struggles. Before this point he had been able to manage his interests entirely through proxies, yet after its publication, he was increasingly required to visit the country in person to enter into negotiations. Board positions were used strategically—for instance, Baldomero Sanín Cano served simultaneously as a railway director and a diplomatic position Villamizar described as “guardian of government interests in London,” which he allegedly used to introduce “legal paradoxes” favoring Jenks’s interests.Footnote 100 Henry Jenks was also a major shareholder in the Boyaca Syndicate Company, which constructed an extension of the Colombian Northern Railway from the salt mines at Zipaquirá to those at Nemocón, connecting these valuable mineral resources to both Bogotá and his Colombian National Railway Company.Footnote 101 As a consequence, in addition to the more visible and obvious influence in a host of companies, much of the Jenks’s dealings were intentionally hidden from scrutiny through shell companies.
While Jenks cultivated relationships with Colombian elites, he simultaneously maintained connections with prominent British gentlemanly capitalists who served as directors and major shareholders across his companies. Table 3 illustrates these interconnections among the British business and political elite, demonstrating how, despite operating in Colombia, Jenks’s enterprises were embedded within broader networks of British capital and influence. The case thus demonstrates how gentlemanly capitalism functioned in practice and the networks of individuals that gave it legitimacy and economic influence in peripheral economies.
Sovereign Debt
Previous sections have explored how Jenks used free-standing companies to coordinate strategic economic interests that not only controlled important assets in dynamic sectors of the Colombian economy but also leveraged each other to further enhance economic power. The existence and significance of these British investments in Colombia have been largely overlooked until now.Footnote 102 However, the form of business imperialism it represents was quite common throughout the region, as evidenced by the work of Christopher Platt, Colin Lewis, Rory Miller, Robert Greenhill, and others.Footnote 103 The Jenks business group provides a case where British investors leveraged sovereign debt instruments to further leverage political influence in a manner similar to that exercised by US capitalists in the region.Footnote 104 Marc Flandreau and Juan Flores have shown how bondholders used the Corporation of Foreign Bondholders to coordinate against defaulting governments, while Rui Esteves and Joao Tovar have highlighted how sovereign debt nonpayment filtered into the private sector through market exclusion.Footnote 105 However, the Jenks case offers a particularly clear example within the regional context, demonstrating how a single investor used influence over a government by negotiating and holding sovereign debt that directly benefited their concurrent personal interests in the private sector.
In the years following the collapse of Rafael Reyes’s government, Jenks played a significant role in organizing Colombia’s sovereign debt, to the extent that the state’s solvency depended on his ability to raise loans in London. Through these activities, he not only gained further connections and strengthened existing ones but also gathered damaging material on Colombian officials, which he could leverage to gain political capital and shield his business interests. A prime example of this is the negotiations between Jenks and the new Colombian representative in London, Santiago Pérez Triana, who, as previously discussed, had taken refuge in London from the Regeneración government of Rafael Nuñez after the government attempted to arrest him for embezzlement of funds from the Antioquia Railway.Footnote 106 In the interim, Pérez Triana had reinvented himself as an anti-imperialist and became a staunch and vocal opponent of the policies implemented by Reyes to attract foreign investment. He heavily criticized the Holguin–Avebury agreement of 1905, which rehabilitated Colombia’s credit overseas, and the awarding of railway concessions to British companies, publishing a book warning that these policies imperiled national sovereignty.Footnote 107 Notwithstanding warning of the perils of British interests, Pérez Triana had shared business interests with the Jenks family through his involvement with the Colombian National Railway Company, with his links to the railway dating back to 1883, more than a decade before its flotation as a British company in 1899.Footnote 108 As a high-profile Colombian living in London, he was an important source of information on the country’s politics and economy for Jenks, sat on the railway’s board of directors, and even “signed the contract” in August 1908, which assured the company’s debentures would be supported by a government guarantee.Footnote 109
In 1910, Pérez Triana and his counterpart in the Paris consulate, José Vicente Concha (future president of Colombia in 1914–1918), negotiated a £500,000 loan with Shirley Jenks as a short-term solution to the national government’s financial problems, with £300,000 earmarked for paying interest arrears on the sovereign debt.Footnote 110 A dispute arose because they had allocated the Muzo emerald mines as security for the loan despite the Colombian Emerald Company Ltd having been granted a concession over the mines during the Quinquenio. They received a £67,710 advance before congressional legislation was in place to authorize the loan.Footnote 111 They subsequently repudiated the debt, arguing that, since congress had not authorized the loan, the contract was not legally binding.Footnote 112 The £67,710 advance was returned, but Jenks claimed damages for a perceived loss of prestige in London.Footnote 113 Colombia’s solicitors considered the letters exchanged between Pérez Triana and Jenks to represent “a [legally binding] contract.”Footnote 114
In December 1909, Pérez Triana negotiated a £28,000 loan with Jenks to cover interest payments on Colombian National Railway Company debentures, where Pérez Triana served as director.Footnote 115 The loan’s favorable terms for Jenks, despite Colombia’s poor finances, suggested corruption persisted from the Reyes era.Footnote 116 This arrangement drew criticism, with Reyes’s former Foreign Minister Alfredo Vásquez Cobo (1906–1908) mocking Pérez Triana for having “mortgaged three government assets in just one morning.”Footnote 117 Yet, Vásquez Cobo himself served as director of Jenks’s Colombian Mining and Exploration Company, revealing how Jenks maintained influence across political divides. Letters between Concha and Pérez Triana in September 1911 later exposed their efforts to coordinate stories with lawyers to repudiate the debt.Footnote 118
The nature of Jenks’s business networks is clearly demonstrated in the 1911–1912 loan negotiations.Footnote 119 When Pérez Triana and Núñez faced pressure from maturing debts, they deliberately steered business to Jenks while closing doors to American bankers with New York houses.Footnote 120 The group maintained control through multiple mechanisms: using intermediary companies such as The Concessions & Contract Co. to handle payments, strategically hiding objections from critics, and employing various front organizations to conduct business.Footnote 121 The effectiveness of these tactics is evidenced by how they survived multiple changes in government—when Concha formally objected to negotiations, his concerns “disappeared from the hands in which they remained in London, and things followed their natural and inevitable course.”Footnote 122
For nearly two decades, Shirley Jenks managed his extensive Colombian business interests entirely from London, relying on his brother Norman as local agent and manager of the Colombian Mining and Exploration Company. This arms-length control through a network of influential collaborating elites in both London and Colombia proved so effective that Jenks was increasingly viewed as a threat to national sovereignty—a concern that culminated in the 1918 publication of Villamizar’s book dedicated entirely to exposing his business activities.Footnote 123 It was only after this publication that Jenks made his first recorded visit to Colombia, ostensibly to address the nationalization of the Colombian National Railway Company. He made just two subsequent trips, in 1926 and 1927, both related to the problems that would ultimately lead to his bankruptcy in 1929.Footnote 124
Zenith, Collapse, and Bankruptcy
By 1918 when the exposé of Jenks’ business activities was published, the group had essentially reached its zenith.Footnote 125 Table 4 highlights the various companies the group’s interests were contained within. Jenks’s group had taken control of key components of some of the most dynamic sectors of the Colombian economy. The Colombian Mining and Exploration Company controlled the country’s most important gold mine, Marmato, as well as prospective oilfields in the Caribbean region. Through the Colombian National Railway Company, Jenks controlled the main conduit of trade of the capital city Bogotá. The Colombian Railways and Navigation Company controlled the export trade on the Magdalena River and through the port of Cartagena. Finally, Jenks’s group controlled a monopoly over the city’s potable water supply. According to Irving Stone, British investment in Colombia was £12.9 million in 1913, of which Jenks’s various companies represented 39.2%, illustrating exactly how powerful the business group he created was and why it attracted such apprehension.Footnote 126
Table 4 Anatomy of the Jenks Business Group, 1899–1929, including book value and year of incorporation of associated companies
Sources: Primmer, “British Overseas”; Particulars of the Colombian Mining and Exploration Company, Limited, Financial Times, 12 December 1908; Cartagena (Colombia) Waterworks, Financial Times, 14 March 1906; BT31-37496-88115, The National Archives, Kew.
The Colombian National Railway Company was nationalized by the government in a drawn-out process throughout the early 1920s, and public policy generally took a turn against foreign interests during this period. It was not a problem confined to British interests, just as Mira Wilkins highlighted, since in 1928 “at least five sermons were preached in Bogotá … attacking … Americans, their activities in Colombia … and urging that they be ousted from the country.”Footnote 127 Contractual disputes between Colombian authorities and British companies progressively increased, and some concessions were cancelled entirely with little in the way of compensation.Footnote 128 Such actions taken by the government ultimately conform to Vernon’s framework, since expropriations happened in parallel with the assets becoming increasingly valuable to the host country, rather than as a result of financial struggles. This is evident in the case of the Colombian National Railway Company, where the business had become profitable, but the government used its position as creditor for guaranteed payments on its debentures to forcibly nationalize the enterprise.Footnote 129
The Cartagena (Colombia) Waterworks Limited played a significant role in Jenks’ eventual bankruptcy. Initially floated with a share capital of £100,000, sufficient to cover the £94,770 costs associated with purchasing the concession and building the infrastructure, the company sought to expand its operations in 1919 owing to Cartagena’s population growth.Footnote 130 In 1923, the company secured a new concession from the municipal government, including a guarantee on the interest on debentures raised to finance the expansion. The concession also included the supply of electricity, prompting plans for a new power plant and an increase in share capital from £100,000 to £400,000.Footnote 131 Jenks personally subscribed for £160,000 of the debentures at 90% of par value and bought £50,000 of the expanded share capital at par value, investing a total of £244,000 of his personal wealth in the initiative.Footnote 132
Shirley Jenks’ relationships with political elites had largely insulated his investments from the shift in public policy favoring national ownership, which had led to the failure of other projects since the end of the Quinquenio.Footnote 133 However, as the 1920s progressed, the business group became increasingly affected by these macro-level changes. In 1925, the municipal government defaulted on interest payments on the company’s debentures, forcing Jenks to raise an additional £150,000 in debentures to mitigate the financial damage. Jenks took £27,000 of these at 85% of par and committed to “an obligation to take up a great many more.”Footnote 134 During a visit to Colombia in 1926, Jenks attempted to negotiate compensation with the municipal government for the enforced nationalization of the company, but the municipality’s “derisory” offer was insufficient to even “pay off its prior lien debenture holders,” leaving nothing for shareholders.Footnote 135
The government’s actions were ultimately similar to those used to nationalize the Colombian National Railway Company. Its role in financially guaranteeing the capital raised to finance the project was used as leverage to enforce nationalization, as the company could not service the 7% debentures without the government support commonly afforded to similar enterprises elsewhere in the region, given the long gestation period of infrastructure investments of this scale. As the higher comparative yields on debentures on the Barranquilla Railway and Pier Company illustrate, this was accentuated by the high cost of raising capital for Colombian enterprise in London because of its perceived high-risk profile.Footnote 136 Following these hostile actions, Jenks held £119,000 in first mortgage debentures, £27,000 in prior lien debentures, and £34,500 in share capital, all now worthless. Jenks attributed his bankruptcy almost entirely to this experience, stating, “if the municipality had given us a proper valuation, I should have had a surplus of over £250,000 and I should never have been in this position.”Footnote 137 He described the loss as “terrific,” with catastrophic consequences.Footnote 138
The Colombian Mining and Exploration Company, incorporated in 1908 with Jenks as a director, similarly exemplifies the dramatic rise and fall of his holdings in Colombia. Initially floated with a share capital of £350,000 (later increased to £500,000), Jenks held £80,000 in shares at incorporation, representing a 22.9% stake.Footnote 139 By 1918, Jenks had invested over £250,000 in the company on the basis of the “most careful reports upon the property in Colombia,” likely provided by his brother.Footnote 140 Despite delays in plant construction due to the outbreak of World War I, the company became successful post-war.Footnote 141 By 1919, Jenks’s position had grown substantially. His shareholding of £200,000 was now trading at £4 per share, worth £800,000. Additionally, he controlled the company’s entire £50,000 debenture issuance. These debentures, issued in 1913 at par with an option to convert to shares at 10 shillings (s) per share, had risen to £3 each, creating an additional £150,000 in value. The dramatic increase in value is evident from the debenture conversion terms—shares worth just 10s in 1913 had reached £4 by 1919.Footnote 142 In total, Jenks’s holdings in the company were worth £950,000, compared with a nominal value of £250,000, representing a £700,000 profit.Footnote 143 Jenks served as a director until 1920, resigned, and then rejoined the board in 1925 reorganizing the company’s share capital.Footnote 144
In 1925, the Colombian government repudiated the company’s concession.Footnote 145 This was a particularly challenging year for Jenks, as it coincided with the default of the municipal government on the Cartagena (Colombia) Waterworks Company’s debentures and the subsequent enforced nationalization of the enterprise. These events were representative of a wave of antiforeign sentiment from which the group had previously been largely shielded by Jenks’s personal relationships. This sentiment had produced a string of legal cases against foreign companies, designed to force them out of the country.Footnote 146 As was the case with Jenks’s other assets, the investments to modernize the mine’s operations had made it an increasingly valuable and tempting asset for expropriation by the national government, thus similarly conforming to Vernon’s framework.Footnote 147
In 1926, during a visit to negotiate compensation for the waterworks nationalization, Jenks also negotiated with the national government over the mining concession. He managed to reach a preliminary agreement for compensation of £1.05 million in September 1926, but the board rejected this as insufficient, leading to Jenks’s resignation from the board in 1927.Footnote 148 Owing to the board’s inability to negotiate any subsequent settlement, the company’s shares dropped to 1 British penny (d), rendering its assets worthless. As a result, Jenks’s initial £200,000 nominal shareholding, which had reached a market value of £800,000 in 1919, was now worth only £833.Footnote 149 Although Jenks had sold a significant portion of his holdings when shares were trading high, and the losses from the concession repudiation did not outweigh previous profits, these had already been reinvested elsewhere, including in the waterworks. Consequently, the drop in share value resulted in a “very substantial monetary loss.”Footnote 150
Jenks’s investments included controlling shareholdings in British domestic companies in the mining and insurance sectors. Correspondence makes it clear that these holdings were integral to a broader business strategy aimed at mitigating risk. While Jenks employed risk management strategies by cultivating relationships with politicians and elites in Colombia, his holdings at home were the most critical factor in ensuring his long-term success as an investor. The strategy involved not only the investments themselves but also how they were held. A significant portion of his British assets, including his 90% shareholding in Reliance Fire & Accident Insurance Corporation Ltd, which the executors of his will valued at £200,000, and Pilsdon Manor, were held in his wife’s name. In 1939 the business’s annual profit was £19,835, and it paid dividends of £3,460, of which Jenks’s 90% shareholding would net £3,114.Footnote 151 This arrangement allowed him to emerge from bankruptcy proceedings in 1929 with substantial assets intact.
Jenks also acquired a controlling interest in the Harrison Ainslie & Company, which operated iron mining and smelting in Furness, Cumbria. Between 1908 and 1914 he invested £250,000 of his Colombian profits into the company, underwriting its loss-making operations through repeated loans and in the process being appointed a company director in 1910.Footnote 152 In 1914 the company entered financial difficulties, and he used this £250,000 liability to him to take control. He wrote off the debt and invested an additional £50,000 to write off all existing liabilities, reorganizing the company as the Pennington Mining Company. He successfully steered the company to profitability, maintaining a steady income stream until 1921, when reduced iron demand following World War I adversely affected the business.Footnote 153
Jenks also maintained assets of businesses incorporated in Colombia valued at £39,000, including one of the national beer companies. These assets also escaped bankruptcy because, as they were not London-listed companies, he could conceal them from liquidators.Footnote 154 Moreover, these investments had a lower risk profile, as the beer sector catered to a growing domestic demand for European-style beer.
Jenks’s failure in the mid- to late 1920s stemmed from a sharp turn in public policy toward foreign investment, but antiforeign investment sentiment had emerged much earlier. The tide had turned against foreign investment as early as the 1910s, when British railway companies faced legal challenges and contract repudiations similar to those that would eventually befall Jenks’s mining and water concessions in the late 1920s.Footnote 155 What distinguished Jenks’s experience was his ability to shield his business interests from this hostile environment for over a decade. This was made possible by way of carefully cultivated relationships with figures in successive administrations, particularly Santiago Perez Triana and Baldonero Sanin Cano. Indeed, Villamizar describes both men as using their positions as Colombia’s diplomatic representatives in London to shield the group’s interests.Footnote 156 When these political connections finally weakened in the mid-1920s, Jenks’s enterprises faced the same legal challenges and contract repudiations that had forced other British companies out of Colombia years earlier.
Conclusions
This article set out to answer the call of Gareth Austin, Carlos Dávila, and Geoffrey Jones by studying business enterprise that weathered “extended turbulence” and depended on “illegal and informal forms of business” to succeed where others had failed.Footnote 157 Purported actions of Jenks’s “incinerating” the accounts of the Colombian National Railway Company during the process of its nationalization illustrate the extent to which the business group accurately fits within this conceptual framework for an “alternative business history.”Footnote 158 So too do minutes of his bankruptcy hearing, where in the face of the officials’ efforts to delve into his business dealings, he feigned ignorance on the basis that “all my papers were kept for six years, and then were destroyed.”Footnote 159 Jenks’s activities were of such interest to contemporary observers that an extensive exposé, which went into his affairs in minute detail because of his perceived threat to national sovereignty, was published.Footnote 160
Shirley Jenks represents a specific type of gentlemanly capitalist investor who leveraged free-standing companies to construct strategically interconnected business interests that exhibited a disproportionate influence over host economies. The influence that Jenks exerted is impressive considering that the nominal sums invested in Colombia were relatively modest compared with regional peers such as Argentina, Brazil, or even Chile. Moreover, he did not enjoy the influential connections in the city shared by contemporaries such as the Rothschilds in Brazil.Footnote 161 Jenks also lacked the significant local presence upon which conglomerates such as the United Fruit Company were predicated. Indeed, excepting his brother Norman, who acted as his agent and local manager, his local footprint was almost entirely absent until 1918, when the business group had already reached its zenith.
Shirley Jenks demonstrated a consistent pattern of adapting to local challenges and implementing effective risk management business strategies. His holdings in Colombia had a high-risk profile, as evidenced by his nonchalant comment in 1943: “I put £250,000 into the Colombian Mining Co., which I never saw again.”Footnote 162 The national historiography portrays the mining sector as one of “poor performance,” arguing that few companies ever paid dividends.Footnote 163 Jenks’s initial successes in this sector highlight the atypical nature of his business in the country, as he succeeded in accumulating wealth from activities in the country where many others had failed. To successfully form a business group, Jenks had to employ many of the risk management strategies considered essential for success in such environments.Footnote 164 Recent scholarship recognizes that entrepreneurs in emerging markets face unique challenges that require different approaches.Footnote 165 The Jenks case study provides examples of the approaches necessary to succeed in a high-risk country.
Jenks purportedly made a profit of £600,000 in 1908 in only his second year managing the family firm.Footnote 166 Among all the foreign businessmen drawn to Colombia in the century after independence, Jenks uniquely succeeded in building a substantial personal fortune entirely from Colombian enterprise—a modern El Dorado that had eluded so many others. In London the Quinquenio represented a bonanza, in which Jenks constructed his personal fortune through the business group, the scale of which should not be understated. His interests in the Colombian Mining and Exploration company alone, which his brother Norman managed, represented a £950,000 market value in 1919. Based on the information available, Jenks’s peak net worth was well over £1 million, perhaps approaching £2 million, which would have placed him within the upper few hundred individuals within contemporary British society.Footnote 167 The total nominal capital value of enterprises he had interests within stood at £5.05 million, close to 40% of the 12.9 million total British investment in the country.Footnote 168
The case of Jenks represents both a story of wealth creation and its subsequent redistribution through state expropriation. His success was not merely based on political influence—the dramatic increase in his companies’ market values reflected genuine business growth and asset development. The Cartagena Waterworks expanded to serve a growing urban population, the Mining and Exploration Company successfully developed the Marmato mine, and his transportation companies created an integrated network serving Colombia’s export trade. These operational successes made his assets increasingly valuable to the Colombian state, ultimately inspiring their nationalization in accordance with Raymond Vernon’s framework.Footnote 169 Rather than failing owing to poor performance, Jenks’s enterprises became victims of their own success—their increasing value and strategic importance made them attractive targets for state takeover, resulting in the redistribution of wealth from private British capital back to the Colombian state.
What is particularly surprising and informative for the wider historiography of business history is that Colombia is generally not considered to have played host to this kind of informal imperialism or business imperialism, however one might choose to define it.Footnote 170 The case also provides important insights for understanding the historical development of business groups. As discussed at the outset, the Jenks case both confirms and advances Geoffrey Jones’s framework for understanding British business groups, by providing empirical evidence for how these leveraged connections with local elites to develop a “quasi-local” status for legitimacy that was crucial in both their formation and survival.Footnote 171 The Jenks case shows how these dynamics operated in the context of British imperial capitalism, where London-based gentlemanly capitalists could construct and control business groups in peripheral economies through sophisticated networks of collaborating elites and interlocking directorships. As with Weetman Pearson in Porfirian Mexico, Jenks’s experience illustrates Raymond Vernon’s obsolescing bargain—as his companies became more successful and their assets more valuable to the host economy, they became increasingly vulnerable to nationalization despite their political connections. Both Raymond Vernon and Geoffrey Jones highlight the Porfiriato as an example of where positive relations with elites formed the basis of positive foreign direct investment outcomes in the short term.Footnote 172 The case of Jenks illustrates that the same was true in Colombia during the shorter-lived Quniquenio of Rafael Reyes (1904–1909).
This study is among the first to identify and explore in detail a British business group amassed through the conduit of free-standing companies in Colombia. As with other British business groups analyzed by Geoffrey Jones, Jenks’s enterprises illustrate how such structures could be used to manage risk and coordinate activities across diverse sectors.Footnote 173 However, the case also reveals distinctive features of imperial business groups in peripheral economies—particularly their heavy reliance on London capital markets and diplomatic networks rather than the family ties and local embeddedness that characterized many business groups of the period. The case of the Jenks business group—both in terms of its influence and the scale of the personal fortune it created—provides a strong justification for similar studies of smaller Latin American countries, which have generally received less attention within the field than those of the southern cone, Brazil and Mexico.
Acknowledgments
Many people assisted me in the development of this manuscript, but one person’s actions were instrumental in preserving the history of the Jenks business group. Tacy Rickard, who inherited the Jenks papers from her father-in-law (Jenks’s accountant), stored these valuable documents for many years in her Teignmouth home before donating them to the University of Bristol in 2018. Sadly, Tacy did not live to see this manuscript published, as she passed away in 2020. I dedicate this article to her memory. I would also like to thank Matthew Brown, Mark Casson, Rory Miller, Colin Lewis, Peter Scott, and Carlos Davila for their invaluable comments on previous drafts, as well as the four anonymous peer reviewers whose feedback greatly improved this article from its initial 2019 draft.
Author biography
Andrew Primmer is an early career researcher in the field of economic, business, and financial history who recently completed a British Academy Postdoctoral Fellowship at the University of Reading, collaborating closely with esteemed scholar Prof. Mark Casson. Known for their research on the impact of railway development on economic growth and nationalism in Colombia during the early twentieth century, they are the author of “British overseas railway investment and economic development: The Colombian National Railway Company and its impact on the Colombian interior” (2020) and “Railway Nationalism and “Railway Imperialism” in Colombia and the Economic Decline of Santander, 1907–1918” (2021), among other contributions to the field.
Open access
