From finance to management: Rui Ennes Ulrich, a Portuguese scholar of the early twentieth century

Abstract

Finance is usually considered to be a complex science, made up of unsatisfactory explanations interpreting the mystery and volatility of financial markets. Expectations, the mood of the market, as well as investment strategies to manage diversified portfolios, are intimidating issues for most people even today. This paper describes how early twentieth-century globalisation framed a network of stock exchanges, from local to regional and national scale, stimulating scientific knowledge on equities, shares, securities, bonds, debentures, transactions, and risk premiums. Both individuals and institutional investors needed financial education. In Portugal Ruy Ennes Ullrich wrote his doctoral dissertation on stock exchanges and financial markets. His book was published in Coimbra in 1906, by the University Press. This paper analyses his contributions in the context of the available literature, and his management performance.

Keywords::

• finance
• stock exchanges
• management
• social elites
• Portugal

Acknowledgements

This paper results from a three-year research project on The Cost of Capital in Portugal, funded by the Portuguese Science Foundation. We are grateful for the facilities we received from FEUNL, and to John Huffstot for correcting our English. Of course, any errors are our own.

Notes

^1.Amatori and Jones, Business History around the World.

^2.Rodrik, The New Global Economy and Developing Countries.

^3.Jones, Merchants to Multinationals.

^4.Bauer, Pool, and Dexter, American Business and Public Policy.

^5.Chandler, Strategy and Structure.

^6.Courtois, Traité d'Opérations de Bourse et de Change, 80–90.

^7.Cassis, Capitals of Capital.

^8. In Lisbon as in London, for example: London Stock Exchange Intelligence, Burdett's Official Intelligence.

^9.Mata, da Costa, and Justino, “Justificação da Nova Edição da Obra,” “Prefácio.”

^10.Schumpeter, History of Economic Analysis, 754. In the School of Law of the University of Coimbra Marnoco e Sousa taught Ullrich the course of political economy.

^11.Marshall, Economics of Industry.

^12.Ekelund and Hebert, History of Economic Theory and Method.

^13. Not to mention the singular case of ‘Confusion de Confusiones’ written in 1688 by Joseph de la Vega, a Portuguese Jew in Amsterdam where the workings of the local exchange are explained under the form of a trialogue between a merchant, a philosopher, and a shareholder. It is considered as the first text on such matters.

^14.Cosack, Traité de droit commercial; Hayaux, Du marché financier; Sayous, Les bourses; Vivant, Trattato; Fontaine, La bourse; Moysen, Le coulissier; Thaler, Traité; Weil, L'impôt; Franchi, Manuale; Marghieri, Il diritto; Lambert, Dictionnaire; Lyon-Caen and Renault, Traité; Pfleger and Gschwindt, La riforma; Passos, A Treatise; Say, Agents; Scherer, La bourse; Vidal, Agents; Guilmard, De la vente; Guillard, 1877; Tedeschi, Dei contrati.

^15.Schumpeter, History of Economic Analysis, 755.

^16.Ulrich quotes Lafargue's article “La fonction économique de la bourse,” 7, as well as Supino'sLa borsa e il capitale improduttivo.

^17.Bedarride, Des bourses de commerce, and Buriat, Le comissionaire contre-partiste en bourse, are good examples.

^18.Schumpeter, History of Economic Analysis, 510.

^19. Carreras and Gonçalez on stock exchanges and Eduardo Perez Pujol on history.

^20. F.J. Peleger, L. Gschwindt.

^21. On the UK stock exchanges, only Passos, A Treatise on the Law of Stock-brokers, is quoted.

^22. Before 1914 the American universities depended on the income flow of European experts, and ‘Teaching fed mainly on McCulloch and Say’ (Schumpeter, History of Economic Analysis, 515).

^23.Alphonse Courtois, Ambroise Buchere, André Moysen, André Sayous, Arthur Raffalovich, Buriat, Emanuel Vidal, Jean Bedarride, Jeannotte Bozerian, Charles Scherer, C. Colson, Boudon, G. Chevilliard, Henri Fontaine, Henri Oulman, Horace Say, Jean Hayaux du Tilly, J. G. Courcelle-Seneuil, Lafargue, Prosper, and Rambaud.

^24. Abel Waldeman, C. Cosack, Edmond Weil, Edmond Guilard, Georges Boudon, and J. Baptiste Say.

^25. A. Bouche-Leclerq, Eliezer Lambert, Ch. Lyon-Caen, L. Renault, and Emile Laveleye.

^26. Eugene Petit, E. Thaler, Joachim Marquardt, and Paul Frederic Girard.

^27.Alberto Marghieri, Augusto Graziani, Camilo Supino, David Supino, Ferdinando Piccinelli, and Prof. Grunhut, on Stock Exchanges; Ferrari on Political Economy, and Ercole Vidari, Luigi Franchi, David Supino, and Dott Errico Thol, for Law.

^28. In Portuguese: ‘Sendo raríssima a venda de valores fora da Bolsa, é vulgaríssima a venda de mercadorias fora d'ella’, 6.

^29. Pages 6–7, 16.

^30.Schumpeter, History of Economic Analysis, 998–1026, on the Walrasian system, and 858–861 on the Paretian school.

^31.Pressman, Fifty Major Economists, 92.

^32. The Code had been approved by a law of 28 June, 1888, and was enacted from 1 January 1889.

^33. Pages 433–503 and 507–542.

^34.Oulmann, De l'étendue, 265, 286, 342, 346, 370, 384.

^35. ‘o monopólio, sendo sempre preferível a qualquer outro systema, é incontestavelmente o único que se harmoniza com as circunstâncias próprias do nosso meio económico’, 383.

^36. Pages 125–130.

^37. Let us recall the book by Proudhon, Manuel du spéculateur à la bourse, 387–417.

^38. See Ulrich, Da Bolsa, 467–471, for example.

^39. In 1902, Emanuel Vidal re-published Alph. Courtois' book Traité des Opérations de Bourse et de Change, after 10 editions from the first in 1850, and in the Preface he describes Alph. Courtois as his master.

^40. Louis Jean-Baptiste Alphonse Bachelier (11 March 1870–28 April 1946).

^41. As many others in academia, Besançon was scientifically flawed. Other mathematical authors in economics also had to wait a long time to see their theories praised. Recall Cournot's pioneering contribution to the study of market equilibrium, Recherches. Published in 1838, few understood its importance at the date of his death in 1877 (Ekelund and Herbert, History of Economic Theory and Method, 209).

^42. Such as Diogo Pereira Forjaz Pimentel, Joaquim Pedro Martins, José Ferreira Borges, José da Silva Lisboa, and M. A. Coelho da Rocha.

^43. Such as Arnaldo Gama, Costa Lobo, Gama Barros, José Anastácio de Figueiredo, Pinheiro Chagas, and Rebelo da Silva.

^44. Adrien Balbi, José Alberto dos Reis and Marnoco e Sousa.

^45. University Yearbook (Anuário da Universidade de Coimbra) 1899–1900, 57.

^46. Along with another colleague José Caeiro da Matta, born in 1877, page 131, who also would be a distinguished intellectual.

^47. The 1903–04 University Yearbook already registers him as a fifth-year student (Universidade de Coimbra, Anuário, 1903–04, 128), adding his address (Arco do Bispo n° 3).

^48.Estudos sobre a condição legal das ordens e congregações religiosas em Portugal. De 1834 a 1901, Coimbra, 1905.

^49.Universidade de Coimbra, Anuário, 1904–05, 25.

^50. Art 5, Decree of 15-06-1870, Diário do Governo n° 155, 14 July 1871.

^51. Preamble to the Decree of 15-06-1870, Diário do Governo n° 155, 14 July 1871, 375.

^52.Universidade de Coimbra, Anuário, 1906–07, 25–27.

^53. For this purpose Ulrich presented another work, ‘Do Reporte no Direito Comercial Português’ as his ‘Dissertação para o concurso ao magisterio na Faculdade de Direito da Universidade de Coimbra, o primeiro despacho para o magistério de Professor Cathedratico’. Universidade de Coimbra, Anuário, 1907–08, 10–11. Reis, Uma Elite Financeira, is wrong in quoting this work as Ulrich's PhD dissertation.

^54.Universidade de Coimbra, Anuário, 1909–10, 160. One may associate this position to his book on Science of Colonial Administration (Ciência e Administração Colonial) that he published in Coimbra, in 1908. His lessons were published in 1909 and 1910, and he went on publishing on colonial issues in 1911 and 1912, namely on the colonial monetary regime and colonial finances, after leaving the University of Coimbra.

^55. Born in 1886, died in 1963.

^56. The Companhia el Fenix Español, headquartered in Madrid for life, maritime and fire insurance, and the French L'Atlantique, from the Havre, with Fr. 1,000,000 equity. Mata, “A Forgotten Country in Globalisation?,” 189.

^57. Maria, who would found the pre-school care and Kindergarten system in Portugal in the 1960s.

^58. A son was born there in 1912, Jorge Lima Mayer Ulrich.

^59. ‘On August 21, 1911 he was elected the first member by legal substitute for the Board of Public Credit for three years 1911–1914, and was called to replace a full member of that Board on September 7, serving up to 5 November. Called again on the 25th of that month, he stayed until January 6, 1912’. http://www.arqnet.pt/dicionario/ulrichre.html (accessed 26 July 2012).

^60.Reis, Uma elite.

^61. Recall his teaching on colonial administration at the University of Coimbra, and his published works on monetary colonial subjects and colonial finances.

^62.Mata, “Large Portuguese Firms from the Marshall Plan to EFTA,” 126.

^63. This period, however, was crowned by the most dramatic family event, as Ullrich's son committed suicide in 1932, following the example of his grandfather Carlos Lima Mayer in 1910. http://www1.ionline.pt/conteudo/5895-a-excentrica-das-amoreiras (accessed 26 August 2012).

^64. He replaced General Tomaz Garcia Rosado, who reached retirement age. On the reasons for Ulrich's replacement in London, because of a Republican campaign against him in Portuguese newspapers, for having invited the pretender to the Portuguese crown, D. Duarte Nuno, to dinner, see Brandão, A demissão de Rui Ulrich, 125–137.

^65.Ulrich, ‘Relações económicas luso-britânicas’ (1936), reflects his diplomatic activity on Portuguese–British economic relations in foreign markets.

^66.Brandão, A demissão de Rui Ulrich, 135. He was also on the Board of the scholarly journal of the school, Revista da Faculdade de Direito.

^67. From the 1st to the 4th Parliamentary terms (Legislaturas).

^68. To compensate Ulrich for his unfair dismissal from this position in 1935, according to Brandão, A demissão de Rui Ulrich, 136 (quoting an elegant letter from Salazar to Genoveva Lima Mayer): Ironically, the Portuguese Foreign Office Minister, Armindo Monteiro, who recalled Ulrich from London in 1935, was the new ambassador in London in 1936.

^69. Raquel Sofia Lemos, Ficha bio-bibliográfica de Rui Ennes Ulrich (1883–1966), available in the following site of the School of Law of UNL university: http://www.fd.unl.pt/ConteudosAreasDetalhe_DT.asp?I = 1&ID = 1372.

^70. As there were no grandchildren, the family patrimony was devoted to two Foundations, both of them located in Ulrich's Lisbon house: The Veva Mayer Foundation, to honour his wife's professional name, and the Maria Ulrich Foundation, after their daughter's death, in 1988.

^71. The Coimbra artist Lourenço Chaves de Almeida mentions Mrs Ulrich as a patron of his works of forged iron in his book of memoirs (Mendes, ‘Prefácio,’ in Almeida, Memórias). In 1935 more silver, decorations and furniture were added to the house, amounting to £3000, coming from London, where they were bought for the Portuguese Embassy (but rejected for public expenditure by the Lisbon Foreign Office). Brandão, A demissão de Rui Ulrich, 135.

^72.Almodovar and Cardoso, A History of Portuguese Economic Thought.

^73. Ibid.

Additional information

Notes on contributors

Maria Eugénia Mata

José Rodrigues da Costa is Professor of Finance at the Instituto Superior de Ciências do Trabalho e da Empresa, and advisor of EURONEXT-NYSE.

J.C. Rodrigues da Costa

Maria Eugénia Mata is Associate Professor of Economic History and History of Economic Thought at Nova SBE. Oliveira Marques Prize 2010, by the Association of Spanish and Portuguese