Holmes as Investor: The Great Game of High Finance

The veiled or widow image of Queen Victoria used on coinage as of 1893.
The so-called veiled or widow image of Queen Victoria used on coinage as of 1893. Did Sherlock Holmes amass piles of these during the same period?
The last Sherlock Holmes’ story, “The Adventure of Shoscombe Old Place,” was published in April, 1927, in The Strand Magazine. But long before that, 1911 to be exact, Monsignor Ronald A. Knox presented a paper to the Gryphon Club in London entitled “Studies in the Literature of Sherlock Holmes.” That paper was the cornerstone of Sherlockian research, an area of endeavor that continues unabated to this day.

The research starts with the forty-six short stories and four novels ostensibly written by Sir Arthur Conan Doyle. I say ‘ostensibly’ because Sherlockian scholars begin by assuming that Holmes and his dear friend and associate John H. Watson, M.D., actually lived, and that Dr. Watson authored the stories—which are written, after all, by him in the first person.  Conan Doyle was merely the literary agent. This fantasy is called ‘the great game’ and the playing of it can be one of the great joys of life.

From The Strand’s illustrations by Sidney Paget of The Adventure of the Beryl Coronet
From The Strand’s illustrations by Sidney Paget of The Adventure of the Beryl Coronet: Holmes is consulted by anxious banker Alexander Holder who’s made an unusual loan.
In myriad publications over the past one hundred years, relatively few Sherlockian scholars have played the great game with Holmes’ finances, and most of those are interested in calculating the income he received for his detective services and comparing that with his expenses. In general, what they find is that no matter how his income is estimated at any given time, Holmes always seemed to be able to spend money however he wished—whether in hot pursuit of a criminal, or for personal reasons. Two examples: In 1882, in “The Adventure of the Beryl Coronet,” Holmes suddenly writes a cheque for 3,000 pounds. He had been in practice for perhaps five years at that time and earning probably 200 pounds a year. In 1893, for strictly personal reasons, Holmes secretly buys the successful medical practice of his friend Dr. Watson at an astonishingly high price so that Watson could leave his practice in Kensington and rejoin Holmes at 221B Baker Street.

Thus, Sherlockian scholars were led to wonder how, in fact, Holmes managed it all. While dazzling fees are implied in a small number of cases—Holmes was in the habit of extracting extravagantly large fees from sovereign governments and royalty—his regular fees could not have been excessive, since he claimed to apply them equally to all clients, most of whom were quite ordinary people. Furthermore, in at least ten of the recorded cases, Holmes apparently did not collect any fee at all in spite of incurring large expenses. I began to wonder if Holmes supplemented his income by investing in the financial markets. Here’s where the fun begins.

In spite of Holmes’ obvious sophistication with respect to the governments and politics of many countries, there are no direct references to financial markets in the forty-six short stories and four novels. A banker and stockbrokers are featured, but even the tantalizingly named “The Adventure of The Stockbroker’s Clerk” does not reflect on the markets per se. However, we do know from an unrecorded case, that Sherlock Holmes was well acquainted with the insidious global reach of stock market crimes. Ah, those unrecorded cases!

In addition to the sixty published adventures of Holmes and Watson, sixty-nine more cases are referred to by ’twitters’ in The Canon (not to be confused with any other, more-modern appropriation of the term).  In “The Reigate Puzzle,” Watson refers to one of these unrecorded cases as follows:

“The whole question of the Netherland-Sumatra company and of the colossal schemes of Baron Maupertuis are too recent in the minds of the public, and are too intimately concerned with politics and finance to be fitting subject for this series of sketches.” … [Holmes] “had succeeded where the police of three countries had failed, and…had outmaneuvered at every point the most accomplished swindler in Europe…”

That’s all we know about that case, but it does give some indication of Holmes’ sophistication and acumen in the area.  Another Sherlockian scholar (in a paper titled “The Capitalist Holmes”) made detailed estimates of Holmes’ income and expenses during his working years, then calculated the interest Holmes would have earned if he had deposited his savings each year in a savings bank. The conclusion is that Holmes could indeed have saved enough for a comfortable retirement. But would a brilliant detective such as Sherlock Holmes put his money in the savings bank when the world around him was seething with more dynamic opportunities? How was I to find out when there is no evidence at all in the ‘sacred texts’ to guide me? 

From The Adventure of the Empty House, illustrations by Sidney Paget for The Strand Magazine
From The Adventure of the Empty House, illustrations by Sidney Paget for The Strand Magazine: Shocking Watson, Sherlock returns. Did he return rich?
I decided to look at the period in Holmes’ life immediately prior to the time he secretly purchased Watson’s medical practice, apparently without a care in the world as to where the money would come from. The time I refer to is the two to three-year period when Holmes dropped out of sight after his reported death at Switzerland’s Reichenbach Falls in the spring of 1891 (also roughly two or possibly three years after apprehending international swindler Baron Maupertuis). Holmes does not turn up again until three years later, in March or April of 1894 in “The Adventure of the Empty House.” When Holmes does return, Watson, a former soldier, is so shocked by his friend’s reappearance that he faints, for the first and only time in his life.

Among other details, Holmes tells Watson that he traveled extensively under an assumed name during those years, mentioning many exotic locales including Tibet, Persia, and Khartoum, where he visited the Khalifa, “the results of which I [Holmes] have communicated to the Foreign Office.” During the years 1891-1894, Holmes communicated only with his brother, Mycroft, upon whom he depended for money since his own was unavailable to him. Watson never tells us how much money Holmes had at the time. Probably, Holmes never told him. But—and this is the critical point—not long after Holmes reappeared in Watson’s presence in the spring of 1894, he purchased Watson’s practice for “the highest price I [Watson] ventured to ask.” (Watson only finds out many years later that it was Holmes who financed the purchase.) Accordingly, it was reasonable for me to conclude that Holmes had a lot of money by 1894.

The late 19th century and the early 20th in Britain was a time of tremendous growth with respect to the financial system in general; enormous hoopla attended each new offering to investors. The deeper I delved into the world of finance in the late Victorian era, the more fascinating the question became, for I learned that Holmes lived in a world of rampant speculation, swindles, and subsequent banking crises eerily similar to our own contemporary financial debacles.

A Catalog from the 1895 Auction of Membland Estate, previously owned by Edward Baring of Barings Brothers Bank.
A Catalog from the 1895 Auction of Membland Estate, previously owned by Edward Baring of Barings Brothers Bank: Back then, bailed-out bankers had to try to repay the Bank of England from their personal holdings.
In Britain, a near-fatal crisis hits the Barings bank, an important British merchant bank, in 1890. The Bank of England, with a consortium of other institutions including the Rothschilds, ’bail out’ the imperiled firm.  Nonetheless, the global credit crunch then triggers an Australian financial crisis, which is one of the most catastrophic financial collapses in history. Their economy plummets 17 per cent over 1891-1893, and it takes nine years to return to the 1891 level. Building societies, mortgage banks, and trading banks fail, and half of all banks in Australia suspend payments to depositors. Here is the kicker: the British banks which avoided the severest effects of the credit crunch had separated ‘banking’ business from the mortgage business. The Australian financial crisis of 1893 was blamed on imprudent mortgage practices. Sound familiar?

I can say, for sure, that Holmes didn’t lose his money during those years. He probably did invest in joint-stock companies of the day, but ones he knew about. He was surely not taken in by swindlers, even the best of them like the Baron, or he would not have been able to buy Watson’s practice. And finally, if some of his money was kept in a savings bank, as another Sherlockian scholar hypothesized, he didn’t chase higher interest rates by depositing his savings in Australian banks, but kept it at home in conservative British banks that had nothing to do with real estate.  These are guesses, of course, but decent ones based upon the economic climate of the day and what we know about Holmes’ own finances.

Most importantly, the fun is in the research. In playing ‘the great game,’ I learned about Victorian times (and hard times) in a very personal way. I also learned of the truth in that old adage that those who do not study history are doomed to repeat it.

Images via Comerford Antiques and David Tearle’s blog.

Maggie Schnader


  1. Barb

    I have gotten the impression over the years that Sherlock and his brother came from a wealthy family. Money held in trust until the receiver was of a certain age. Once they came into their money it was usually more then they could manage to spend in a lifetime. The fact that he took money for his consultations is irrelevant.

  2. Editmec

    Very informative article! Thanks for sharing.

  3. Jonathan Jones

    The content you share is really helpful for me. I hope you will provide more great information.

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