Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-19T11:48:15.509Z Has data issue: false hasContentIssue false
  • English
  • Français

Credit, confidence and the circulation of Exchequer bills in the early financial revolution

Published online by Cambridge University Press:  12 March 2019

Aaron Graham Open the ORCID record for Aaron Graham [Opens in a new window]
Aaron Graham*
Affiliation:
University College London
*
Dr A. Graham, University College London, Department of History, Gower Street, London wc1e 6bt, UK, aaron.graham@ucl.ac.uk.
Get access Rights & Permissions [Opens in a new window]

Abstract

The Exchequer bills were a key component in Britain's financial revolution of the 1690s. Using a range of archival sources not examined in previous work, this article argues that closer study of how these bills were given credit and circulation between 1696 and 1698 can offer a more nuanced reading of the mechanisms which helped to create credible commitment in this period. Though proper institutional design did help to give the bills credit, it was only one part of a wider series of informal measures used by the Treasury to secure subscribers for the fund for circulating the bills and to manage the emission of bills to prevent high discounts. This reflects the fact that credit and confidence in this period were influenced by a wide range of factors, including commercial advantage, patriotism and the example offered by other investors, all of which could be manipulated by the Treasury to promote the credibility of the Exchequer bills. Proper institutional and financial incentives were therefore not the only factors which could create credible commitment in Britain's financial revolution.

Keywords

financial revolutioncredible commitmentpublic creditmoney

JEL classification

N13: Europe: Pre-1913 B15: Historical • Institutional • Evolutionary N10: General, International, or Comparative N43: Europe: Pre-1913 N23: Europe: Pre-1913
Type
Articles
Information
Financial History Review , Volume 26 , Issue 1 , April 2019 , pp. 63 - 80
Copyright
Copyright © European Association for Banking and Financial History e.V. 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I would like to thank Anne Murphy, Patrick Walsh, Koji Yamamoto, Rui Esteves and the referees at the Financial History Review for their comments and advice. Research for this article was supported by a Postdoctoral Fellowship from the British Academy, with additional support from an Early Career Fellowship from the Leverhulme Trust. I am grateful to the Henry E. Huntington Library, San Marino, California and the Baker Library, Harvard Business School, Cambridge, MA, for permission to cite these records.

References

Binney, J. E. D. (1958). British Public Finance and Administration 1774–92. Oxford: Oxford University Press.Google Scholar
Broz, J. and Grossman, R. (2004). Paying for privilege: the political economy of Bank of England charters, 1694–1844. Explorations in Economic History, 41, pp. 48–72.Google Scholar
Chaudhuri, K. N. (1978). The Trading World of Asia and the English East India Company, 1660–1760. Cambridge: Cambridge University Press.Google Scholar
Clapham, J. H. (1945). The Bank of England: A History. Cambridge: Cambridge University Press.Google Scholar
Clay, C. G. A. (1978). Public Finance and Private Wealth: The Career of Sir Stephen Fox, 1627–1716. Oxford: Oxford University Press.Google Scholar
Coffman, D. and Neal, L. (2013). Introduction. In Coffman, D., Leonard, A. and Neal, L. (eds.), Questioning Credible Commitment: Perspectives on the Rise of Financial Capitalism. Cambridge: Cambridge University Press.Google Scholar
Cox, G. (2016). Marketing Sovereign Promises: Monopoly Brokerage and the Growth of the English State. Cambridge: Cambridge University Press.Google Scholar
Cruickshanks, E., Handley, S. and Hayton, D. W. (2002). History of Parliament: The Commons, 1690–1715, 5 vols. Cambridge: Cambridge University Press.Google Scholar
Dale, R. (2004) The First Crash: Lessons from the South Sea Bubble. Princeton: Princeton University Press.Google Scholar
De Krey, G. S. (1985). A Fractured Society: The Politics of London in the First Age of Party, 1688–1715. Oxford: Oxford University Press.Google Scholar
Deringer, W. (2015). For what it's worth: historical financial bubbles and the boundaries of economic rationality. Isis: A Journal of the History of Science Society, 106, pp. 646–56.Google Scholar
Desan, C. (2014). Making Money: Coin, Currency, and the Coming of Capitalism. Oxford: Oxford University Press.Google Scholar
Dickson, P. G. M. (1967). The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756. London: Cass.Google Scholar
Doolittle, I. G. (1983). The City of London's debt to its orphans, 1694–1767. Bulletin of the Institute of Historical Research, 56, pp. 46–59.Google Scholar
Felix, J. (2018). ‘The most difficult financial matter that has ever presented itself’: paper money and the financing of warfare under Louis XIV. Financial History Review, 25, pp. 43–70.Google Scholar
Gallais-Hamonno, G. and Rietsch, C. (2013). Learning by doing: the failure of the 1697 Malt Lottery loan. Financial History Review, 20, pp. 259–77.Google Scholar
Graham, A. (2018a). The War of the Spanish Succession, the financial revolution, and the Imperial loans of 1706 and 1710. In Pohlig, M. and Schaich, M. (eds.), The War of the Spanish Succession: New Perspectives. Oxford: Oxford University Press for the German Historical Institute of London.Google Scholar
Graham, A. (2018b). ‘I carry a serpent in my bosom, which devours me’: finance, morality and the public service in the Nine Years War, 1688–1697. In Felix, J. and Dubet, A. (eds.), The War Within: Private Interests and the Fiscal State In Early-Modern Europe. London: Palgrave Macmillan.Google Scholar
Horsefield, J. K. (1960). British Monetary Experiments, 1650–1710. Cambridge, MA: Harvard University Press.Google Scholar
Horwitz, H. (1977). Parliament, Policy, and Politics in the Reign of William III. Manchester: Manchester University Press.Google Scholar
Jones, D. W. (1988). War and Economy in the Age of William III and Marlborough. Oxford: Blackwell.Google Scholar
Kleer, R. (2008). ‘Fictitious cash’: English public finances and paper money, 1689–97. In Mcgrath, C. I. and Fauske, C. (eds.), Money, Power and Print: Interdisciplinary Studies on the Financial Revolution in the British Isles. Newark, DE: University of Delaware Press.Google Scholar
Kleer, R. (2015). ‘A new species of money’: British Exchequer bills, 1707–1711. Financial History Review, 22, pp. 179–203.Google Scholar
Kleer, R. (2017). Money, Politics and Power: Banking and Public Finance in Wartime England, 1694–1696. London: Routledge.Google Scholar
Melton, F. T. (1986). Sir Robert Clayton and the Origins of English Deposit Banking, 1658–1685. Cambridge: Cambridge University Press.Google Scholar
Murphy, A. (2005). Lotteries in the 1690s: investment or gamble? Financial History Review, 12, pp. 227–46.Google Scholar
Murphy, A. (2009). The Origins of English Financial Markets: Investment and Speculation before the South Sea Bubble. Cambridge: Cambridge University Press.Google Scholar
Murphy, A. (2013). Demanding ‘credible commitment’: public reactions to the failures of the early Financial Revolution. Economic History Review, 66, pp. 178–97.Google Scholar
North, D. C. and Weingast, B. R. (1989). Constitutions and commitment: the evolution of institutions governing public choice in 17th century England. Journal of Economic History, 49, pp. 803–32.Google Scholar
Paul, H. J. (2011). The South Sea Bubble: An Economic History of Its Origins and Consequences. London: Routledge.Google Scholar
Rabinowicz, O. K. (1974). Sir Solomon de Medina. London: Jewish Historical Society of England.Google Scholar
Rowlands, G. (2012). The Financial Decline of a Great Power: War, Influence, and Money in Louis XIV's France. Oxford: Oxford University Press.Google Scholar
Rowlands, G. (2014). Dangerous and Dishonest Men: The International Bankers of Louis XIV's France. London: Palgrave Macmillan.Google Scholar
Sainty, J. C. (1972). Treasury Officials, 1660–1870. London: Athlone Press for the Institute of Historical Research, University of London.Google Scholar
Sainty, J. C. (1983). Officers of the Exchequer. London: List and Index Society.Google Scholar
Shea, G. S. (2007). Understanding financial derivatives during the South Sea Bubble: the case of the South Sea subscription shares. Oxford Economic Papers, 59, pp. 73–104.Google Scholar
Sundstrom, R. A. (1992). Sidney Godolphin: Servant of the State. Newark, DE: University of Delaware Press.Google Scholar
Waddell, B. (2015). The politics of economic distress in the aftermath of the Glorious Revolution, 1689–1702. English Historical Review, 130, pp. 318–51.Google Scholar
Wennerlind, C. (2011). Casualties of Credit: The English Financial Revolution, 1620–1720. Cambridge, MA: Harvard University Press.Google Scholar