National Gallery of Art, London

By Andrew Odlyzko

Joseph Mallord William Turner( 1775 – 1851) is famous for his oil paintings, watercolors and drawings. His pioneering work in the graphical arts continues to be admired, enjoyed and celebrated, and many special exhibits in museums around the world have commemorated the 250th anniversary of his birth this year.

What has not been discussed are Turner’ s forays into risk-free arbitrage of British government securities. Those forays were also unknown to the public in his lifetime, and that is easy to understand. They were few in number and involved minor sums that were too small to move market prices. However, they are of interest for a few reasons.

The Fighting Temeraire, oil on canvas, by Joseph Mallord William Turner, 1839.

First, they show a fascinating side of Turner that was not known before— an artist who was financially sophisticated. Second, and more important, they illustrate what might be regarded as incomplete development of the British financial markets. Even though they were the most sophisticated in the world at the time, they produced very obvious pricing anomalies that Turner occasionally exploited. The big question is how those anomalies managed to persist for extended periods. Evidence suggests that cultural inhibitions stopped most participants from taking advantage of the arbitrage opportunities. It appears that it required eccentrics— such as Turner— to overcome those constraints.

John Constable, another famous painter of that period, wrote of Turner that“ he is uncouth but has a wonderful range of mind.” And, indeed, Turner had a wide range of friends and acquaintances, and not just among artists. But he was certainly

“ uncouth,” not one of the“ well-bred gentlemen” of his age. In particular, he was called a miser, with an unseemly preoccupation with money. This was rather unjust, as he left his entire estate to the public. It consisted of a very large and priceless collection of his works, along with a very substantial financial legacy, about £ 80,000, comparable to between $ 10 million and $ 200 million today, depending on whether one uses inflation adjustments or scales by per capita GDP.

Available evidence led Turner’ s biographers to believe he did not have a bank account, and when he accumulated substantial cash, he invested it through his broker in government securities. However, this conclusion was based on very fragmentary evidence. Much more can be done.

Details of Turner’ s dealings in government securities are available in full detail in the ledgers in the Bank of England Archive and have not been previously

38 FINANCIAL HISTORY | Fall 2025 | www. MoAF. org