Adam family values: The rise and fall of a property company

They were the most fashionable architects of the 18th century, and the most imprudent property speculators. The Adelphi was their most audacious project. Their downfall has uncanny contemporary echoes.

Financial panics, stock market crashes, banking crises, credit squeezes, falling property prices: all these have made their mark on London in the year 2007. But that list could as well describe the London of the second half of the 18th century, as a new exhibition at Sir John Soane's Museum in Lincoln's Inn Fields reveals.

Entitled Vaulting Ambition, it tells the story of the rise and fall of the four Adam brothers; and of the Adelphi, the hugely ambitious and glamorous development they built on the north bank of the Thames between what is now Charing Cross station and the Savoy Hotel.

It is not there now – it was torn down in the 1930s and replaced with the art deco New Adelphi building. What remains, however, is a fascinating series of parallels between the creation of an upscale riverside development in London in 1768 and the capital's property market 240 years later. Together they tell a story that has all the ingredients of a classical myth: ambition; greed; and tragedy.

It seems astonishing today, when – thanks principally to Robert, the second eldest – the name Adam has become synonymous with a golden age of architecture, that the Scottish brothers who did so much to beautify the capital were not always regarded with such awe and affection. But they were not.

First, as the curator of the exhibition, Professor Alistair Rowan, points out, there was a feeling towards the second half of the 18th century that too many Scots filled important places in government. (It's amusing to discover that the Sassenach tendency to resent being ordered about by dynamic, talented and intelligent individuals from north of the border is nothing new.)

The brothers came in for their share of opprobrium, with one contemporary song beginning: "Four Scotchmen, by the name of Adams, Who keep their coaches and their madams ..."

Second, it seems that dislike of developers, the mess and chaos they generate in a busy city, and the inconvenience they inflict upon neighbouring businesses, is also far from being a 21st century phenomenon. As Professor Rowan says: "If Robert and James Adam were, in a sense, the first celebrities in British architectural history, in the methods they employed within their building company they displayed all the traits of some big developers today."

The Adam brothers and their Adelphi building site, an area known as Durham Yard, managed to upset the City of London, the Watermen and Lightermen's Company, the Coal and Corn Lightermen and even the Dean and Chapter of Westminster Abbey. That's a fair number of people. It's pretty safe to say that they would fail to qualify for Westminster's Considerate Builders, Scheme if they were operating today.

The City of London, in the form of the Lord Mayor and aldermen, claimed the dumping of rubble and rubbish in the Thames would adversely affect the navigation of the river. The Adam brothers argued that the rubble would provide footings for new wharves which would improve access from the river. By that time, however, blood was up on both sides and the dispute, which took two years to resolve, went as far as the Lords. It probably helped that Robert Adam was an MP and that the King, George III, was one of his employers.

Third, it seems Robert and James, who themselves had a taste for sophisticated society, were alive to the benefits of celebrity endorsement. One of the first residents at the Adelphi was their friend David Garrick, the actor, producer and playwright who had become the first stage superstar following his acting debut in 1741 as Richard III and who went on to revolutionise British theatre as manager of the Theatre Royal in Drury Lane. It was a bit like Richard Rogers or Norman Foster persuading Brad Pitt or David Beckham to buy an apartment in their new block of flats and it generated much the same sort of media buzz. Even before the Adelphi was complete, artists were sketching and painting it.

The Adelphi consisted of a huge precinct of houses, shops and public buildings, with the grandest terrace of all overlooking the river, supported by a subterranean tier of streets and warehouses. Remnants of it can still be seen today, notably the Royal Society of Arts building.

In planning terms, says Professor Rowan, it was a dense development. "Just as city centre schemes today tend to maximise the plot ratio, Robert and James Adam exercised all their ingenuity to fit as many properties on to the site as they could."

The Adam brothers were shrewd enough to suck up to their royal patron by promising to call the riverside thoroughfare Royal Terrace. They called the rest of the streets after themselves. The most flamboyant gesture of all, however, was the choice of the name Adelphi. Taken from the Greek word for brothers, it was intended to stand as a tribute to an architectural dynasty and all that it had achieved.

The Adam story was not one of rags to riches. The two elder brothers – John (1721-1792) and Robert (1728-1792) – were born in Kirkcaldy, Fife, which is famous today as the birthplace of Gordon Brown. Like him, they were well-educated in the traditional Scottish manner. Their father, William, was Scotland's foremost architect during the first half of the 18th century, and by 1728 he had moved his family to Edinburgh, where Robert attended the Royal High School and Edinburgh University.

John went into the family business, where Robert, whose studies were interrupted by the Jacobite rebellion of 1745, joined him. Following the death of their father in 1748, the business was renamed Adam Brothers. But John was content to stay at home in Edinburgh: not only had he inherited Blair Adam, the estate his father had built up in Kinross-shire, and the largest share of his father's wealth, but he had also assumed responsibility for his brothers' welfare.

Robert found this attitude puzzling and frustrating. The most talented and ambitious of the brothers, he was determined to travel, and in 1754, he set off on a Grand Tour which took in France, Italy and Croatia, where he studied the ruined palace of Diocletian at Split. He even published a book on the subject 10 years later and Professor Rowan observes that the construction of the Adelphi is similar to that of the Roman emperor's palace. Robert did not just copy classical motifs, he says, but sought to understand the underlying concepts of Roman architecture.

Upon his return to Britain in 1758, Robert was determined not to return to the parochial life his brother so much enjoyed in Edinburgh. He opened an office in London, and by 1761, he had been appointed joint architect to the King, alongside Sir William Chambers (another Scot – and the architect of Somerset House). Robert was joined in London by his younger brother James (1732-1794), who was as ambitious and worldly as himself.

By 1764, John realised that joining forces with the London operation could only be beneficial, while his brothers, though they may have made fun of his provincial tastes, welcomed his experience. Together they set up William Adam & Co, named after their youngest brother, (1738-1822), who became in effective its business manager.

The firm had got the Adelphi site cheap, and the brothers might well have gone on to become multimillionaires had it not been for a spectacular banking crash known as the Panic of 1772. This followed the collapse of the Ayr Bank, which had amassed a mountain of credit thanks to speculative investments.

The repercussions of the collapse were felt throughout Europe and as far away as the American colonies. (The economist Adam Smith, another Kirkcaldy boy, was a shareholder at the time.) The Ayr Bank was indeed a northern rock on which 18th-century finance foundered.

Undeterred, the Adam brothers came up with the idea of holding a lottery, and in 1774 the proceeds allowed them to clear their debts. In an extraordinary stroke of luck, they even won the main prize themselves. But their brush with financial disaster failed to make them more prudent, and their next venture, Portland Place in Marylebone, built between 1776 and 1790, ran them into further financial difficulties.

House prices in London had slumped, and the Adam family firm was now exposed to the perils of negative equity – they found it hard to sell the Adelphi properties for anything like their real value. A purchase agreement on a house in the development's Adam Street in 1773 sets the price at £1,100. Six years later, a comparable house would struggle to fetch a third of that. By the time of their last speculation, in 1789 – the construction of a huge new development bordered by Tottenham Court Road to the east and what is now Euston Road to the north – the eldest and most prudent Adam brother, John, was urging his siblings to put their company into receivership.

At the centre of the new development was Fitzroy Square – for which only two sides of the Adam design were completed. The brothers had managed to offload some of the Fitzrovia sites on to John Nash – who ironically had been forced by bankruptcy to work as an architect and was just beginning to make a name for himself. But it was too late.

By the end of 1792, both Robert and John Adam, who by this time were barely on speaking terms, were dead, and James died two years later. Their youngest brother, William, was left to struggle on alone, sinking further into debt. At the age of 84, he committed suicide in 1822. The ambition symbolised by the Adelphi had destroyed not only the brothers and their company, but also their love for each other.

Vaulting Ambition, The Adam Brothers: contractors to the metropolis in the reign of George III, is at Sir John Soane's Museum, 13 Lincoln's Inn Fields, London WC2A 3BP until 12 January 2008. Open Tuesdays to Saturdays, 10am-5pm, admission free. For more details, go to www.soane.org