The financial and economic crisis since 2007 and the uproar stemming from the extremely high incomes and bonuses of some executives and traders have tarnished the image of the financial industry. As Michie shows in his new book on the City, this was by no means a new phenomenon; it occurred whenever a bubble burst – which happened quite frequently between 1815 and 1914, the period studied in Guilty Money.

But the book is not a conventional one. Economic history is there, but it is mostly seen through the mirror of novels published in the UK at the time. The French used to say: if you want romance, try history (loosely translated). Michie has subverted that saying. For years, he has been reading these novels, which must occasionally have been an ordeal, as alongside great books such as Dickens' Little Dorrit or Trollope's The Way We Live Now, he had to plough through a great deal of what is now called ‘pulp fiction’, or ‘railway station books’ as the French call them. Most of the plots are the same: the ‘hero’ of foreign or ‘low’ origin, who goes from rags to riches, marries a poor aristocrat (or tries to), then fails and has to flee to the continent, allowing the poor aristocrat to marry her sweetheart.

Thus, during most of the long nineteenth century, these novels presented a fairly bad image of the City – hence the adjective ‘guilty’ of the title. As Michie shows, several dimensions were blended to create that image: first, the traditional Christian antipathy towards usury which, Protestantism notwithstanding, persisted largely after the Reformation; then the speculations – linked to the Industrial Revolution, particularly the railway and mining manias – which created the conditions for all sorts of swindles; and finally, the foreign origin of many financiers, particularly Central and Eastern European Jews, which in turn led to crude antisemitism. One of the novels quoted even succeeded in combining two ‘races’ renowned for their links with money: in Crotchet Castle (1831), we have Ebenezer MacCrotchet born in London of a Scottish father and a Jewish mother (Michie writes: ‘this augurs up an image of expertise in money combined with meanness’).

Michie's book is divided into seven chapters, the first two dealing with the periods 1800-46 (‘Capitalism and culture’) and 1856-1970 (‘Financiers and merchants’). Chapter 2 includes the true story of the Overend & Gurney panic (1866), which can itself be read as a novel, with characters such as Quakers, Smyrna Englishmen, Eastern European Jews and a Roman Catholic priest from Galway – see G. Elliott, The Mystery of Overend and Gurney (London, 2006), unfortunately not quoted here. The two main observers of the panic – Walter Bagehot in Lombard Street and Karl Marx in book III of Das Kapital – are also omitted. Chapter 3, ‘Damnation and forgiveness’, takes us to 1885. Partly due to France's defeat in 1871, the City had become the first international centre, peopled with even more foreigners. This was also the period when two of the great swindler novels were published: Trollope's The Way We Live Now (1874–5) is centred on A. Melmotte, who promoted, among other ventures, a railway from Salt Lake City to Mexico. The Vampires (1875), published pseudonymously by ‘The Specter’, dubs the stock exchange ‘The Vortex’ and defines it as ‘the great national swindling house’. For the novelists of the time only land and 3 per cent consols were safe investments. Chapter 4, ‘Advance and honesty’, shows the beginning of respectability, badly shattered during the 1890s by a series of failures: that of Baring's impacted by Argentina, and then the Liberator Building Society, the chairman of which, Jabez Balfour, had undertaken massive fraud and then fled to France, the favourite destination for the fraudsters of the day, in order to escape prosecution. Chapter 5, ‘Gold and greed’, takes us back to gold mines, mainly in South Africa, where discoveries led to a new era of monetary expansion, thus ending the ‘Great Depression’ of the late nineteenth century. The year 1896 also saw the publication of Guilty Gold, the novel which inspired the title of Michie's book. Guilty Gold is ‘a romance of finance fraud and city crime’, about a gold mine with no gold; again, this is no romance. More recently we have the true story of Borneo's Penang ‘gold mine' in 1997: the samples were ‘salted’ and a geologist who was too curious fell from a helicopter. Chapters 6 and 7, ‘Money and mansions 1900-1910’ and ‘Wealth and power (1910-14)’, describe the belle époque, with even more romance and more crime.

Both informative and witty, Michie's book is a must for historians of finance as well as for those of ‘culture’. I have but one regret: neither C. P. Kindleberger's Manias, Panics and Crashes nor J. H. Donnard's Balzac are quoted here, especially since Donnard's thesis has done for the France of Balzac's time what Michie has done for Victorian and Edwardian Britain – link literature and reality. But again, we have such pleasure reading this book that these are minor quibbles compared to the true gems one finds in Guilty Money.