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Performing Public Credit at the Eighteenth-Century Bank of England

  • Anne L. Murphy
Abstract

Much is known about the negotiation of personal credit relationships during the eighteenth century. It has been noted how direct contact and observation allowed individuals to assess the creditworthiness of those with whom they had financial connections and to whom they might lend money. Much less is known about one of the most important credit relationships of the long eighteenth century: that between the state and its creditors. This article shows that investors could experience the performance of public credit at the Bank of England. By 1760 the Bank was the manager of nearly three-quarters of the state's debt and housed the main secondary market in that debt. Thus, it provided a place for public creditors, both current and potential, to attend and scrutinize the performance of the state's promises. The article demonstrates how the Bank acted to embody public credit through its architecture, internal structures, and imagery and through the very visible actions of its clerks and the technologies that they used to record ownership and transfer of the national debt. The Bank of England, by those means, allowed creditors to interrogate the financial stability and reputation of the state in the same ways that they could interrogate the integrity of a private debtor.

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1 For example, see Anderson, B. L., “Money and the Structure of the Credit in the Eighteenth Century,” Business History 12, no. 2 (July 1970): 85101; Finn, Margot, The Character of Credit: Personal Debt in English Culture, 1740–1914 (Cambridge, 2003); Muldrew, Craig, The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England (London, 1998); Paul, Tawny, “Credit, Reputation, and Masculinity in British Urban Commerce : Edinburgh, c. 1710–70,” Economic History Review 66, no. 1 (February 2013), 226–48; Shepard, Alexandra, Accounting for Oneself: Worth, Status, and the Social Order in Early Modern England (Oxford, 2015). With regard to public credit, see Carey, Daniel and Finlay, Christopher J., The Empire of Credit: The Financial Revolution in the British Atlantic World (Dublin, 2011); Cox, Gary W., Marketing Sovereign Promises: Monopoly Brokerage and the Growth of the English State (Cambridge, 2016); Dickson, P. G. M., The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756 (London, 1967); Stasavage, David, States of Credit: Size, Power, and the Development of European Polities (Princeton, 2011).

2 Muldrew, Economy of Obligation; Finn, Character of Credit. For a detailed comparison of the two standpoints, see Tawny Paul, “Credit and Social Relations amongst Artisans and Tradesmen in Edinburgh and Philadelphia” (PhD diss., University of Edinburgh, 2011).

3 Defoe, Daniel, The Compleat English Tradesman (London, 1726), 119.

4 The True Briton, 26 July 1723, quoted in Hoppit, Julian, “Attitudes to Credit in Britain, 1680–1790,” Historical Journal 33, no. 2 (June 1990): 305–22, at 319.

5 North, Douglas C. and Weingast, Barry R., “‘Constitutions and Commitment’: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England,” Journal of Economic History 49, no. 4 (December 1989): 803–32; Clark, Gregory, “The Political Foundations of Modern Economic Growth: England, 1540–1800,” Journal of Interdisciplinary History 26, no. 4 (April 1996): 563–88; Cox, Marketing Sovereign Promises; Murphy, Anne L., “Demanding Credible Commitment: Public Reactions to the Failures of the Early Financial Revolution,” Economic History Review 66, no. 1 (February 2013): 178–97; Sussman, Nathan and Yafeh, Yishay, “Institutional Reforms, Financial Development and Sovereign Debt: Britain, 1690–1790,” Journal of Economic History 66, no. 4 (December 2006): 906–35.

6 The most comprehensive summary of these arguments can be found in Dincecco, Mark, Political Transformations and Public Finances: Europe, 1650–1913 (Cambridge, 2011). See also Acemoglu, Daron and Robinson, James A., Why Nations Fail: The Origins of Power, Prosperity, and Poverty (London, 2013).

7 Binney, J. E. D., British Finance and Public Administration, 1774–1792 (Oxford, 1958); Cooper, Richard, “William Pitt, Taxation and the Needs of War,” Journal of British Studies 22, no. 1 (October 1982): 94103; Dickson, Financial Revolution, 157–248.

8 Cooper, “William Pitt,” 95.

9 Brantlinger, Patrick, Fictions of State: Culture and Credit in Britain, 1694–1994 (Ithaca, 1996), 4849; Dickson, Financial Revolution in England.

10 Pocock, J. G. A., Virtue, Commerce and History: Essays on Political Thought and History, Chiefly in the Eighteenth Century (Cambridge, 1985), 112.

11 Brantlinger, Fictions of State, 20.

12 Quoted in O'Brien, John F., “The Character of Credit: Defoe's ‘Lady Credit,’ The Fortunate Mistress, and the Resources of Inconsistency in Early Eighteenth-Century Britain,” English Language History 63, no. 3 (Fall 1996): 603631, at 612.

13 O'Brien, “The Character of Credit,” 613.

14 Dickson, Financial Revolution, 249.

15 Dickson, 282, 301–2.

16 Macdonald, James, A Free Nation Deep in Debt: The Financial Roots of Democracy (Princeton, 2003), 471–72.

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18 Dickson, Financial Revolution, 285; Michie, Ranald, The Global Securities Market: A History (Oxford, 2006), 53.

19 Amounts rounded to the nearest £1.

20 Defoe, Daniel, A Tour Thro’ the Whole Island of Great Britain, new ed. (1968; repr. London, 1724), 338.

21 A Letter to a Friend concerning Credit, and how it may be restor'd to the Bank of England (London, 1697), 1.

22 Backscheider, Paula R., “Defoe's Lady Credit,” Huntington Library Quarterly 44, no. 2 (Spring 1981): 89100, at 96.

23 Quoted in Clapham, J. H., The Bank of England: A History, 2 vols. (Cambridge, 1966), 1:181.

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25 Roxburgh, Natalie, Representing Public Credit: Credible Commitment, Fiction and the Rise of the Fictional Subject (London, 2016), 41.

26 Bank of England Archive (hereafter BEA), M5/213, Minutes of the Committee of Inspection, fols. 178–79.

27 Paul, “Credit and Social Relations,” 250.

28 Finn, Character of Credit, 21.

29 Paul, “Credit and Social Relations,” 136.

30 Hudson, Pat, “Correspondence and Commitment: British Traders” Letters in the Long Eighteenth Century,” Cultural and Social History 11, no. 4 (December 2014): 527–53.

31 Hudson, “Correspondence and Commitment,” 535–37.

32 Daniel Defoe, quoted in Abramson, Daniel M., Building the Bank of England: Money, Architecture, Society, 1694–1942 (New Haven, 2004), 9.

33 Abramson, Building the Bank of England, 34.

34 Abramson, 34.

35 Abramson, 54.

36 Walter, Ryan, “The Economy and Pocock's Political Economy,” History of European Ideas 34, no. 3 (September 2008): 334–44, at 335.

37 Fielding, John, A Brief Description of the Cities of London and Westminster (London, 1776), 3.

38 North and Weingast, “Constitutions and Commitment.”

39 Abramson, Building the Bank, 57.

40 See, for example, The Ambulator; or the Stranger's Companion in a tour round London (London, 1774), ix; Malton, Thomas, A Picturesque Tour through the Cities of London and Westminster (London, 1792–1801).

41 Malton, Picturesque Tour, 76.

42 Quoted in Booker, John, Temples of Mammon: The Architecture of Banking (Edinburgh, 1990), 5.

43 Black, Iain S., “Spaces of Capital: Bank Office Building in the City of London, 1830–1870,” Journal of Historical Geography 26, no. 3 (July 2000): 351–75, at 357.

44 For example, see BEA, G4/23, fol. 167.

45 Acres, W. Marston, The Bank of England from Within, 2 vols. (London, 1931), 1:191.

46 Quoted in Clare Walcot, “Figuring Finance: London's New Financial World and the Iconography of Speculation, circa 1689–1763” (PhD diss., University of Warwick, 2003), 103.

47 Defoe, Daniel, A Tour thro the Whole Island of Great Britain (London, 1724), 135, quoted in Walcot, “Figuring Finance,” 88.

48 North, Roger, Of Building (London [1695–96?]), quoted in Walcot, “Figuring Finance,” 93.

49 BEA, M6/19, Memorandum on the introduction of the King's Guard.

50 Abramson, Building the Bank, 86.

51 Mortimer, Thomas, Every Man His Own Broker, or a Guide to Exchange Alley (London, 1785), 133.

52 The Bank of England's Vade Mecum: Or Sure Guide (London, 1782).

53 BEA, M5/607, Old Book, Orders for Porters, fols. 6–7.

54 Quoted in Roxburgh, Representing Public Credit, 87.

55 Abramson, Building the Bank, 11.

56 Murphy, Anne L., “Learning the Business of Banking: The Recruitment and Training of the Bank of England's First Tellers,” Business History 52, no. 1 (February 2010): 150–68; Giuseppi, John, Bank of England: A History from Its Foundation in 1694 (London, 1966), 56; Kynaston, David, The City of London, vol. 1, A World of Its Own (London, 1995), 30.

57 Bowen, H. V., The Business of Empire: The East India Company and Imperial Britain, 1756–1833 (Cambridge, 2006), 139; Boot, H. M., “Real Incomes of the British Middle Class, 1760–1850: The Experience of Clerks at the East India Company,” Economic History Review 52, no. 4 (November 1999): 638–68, at 639. The East India Company employed a total staff of more than seventeen hundred, if warehouse laborers and dock workers are included in the count. Supple, Barry, The Royal Exchange Assurance: A History of British Insurance, 1720–1970 (Cambridge, 1970), 70.

58 BEA, M5/213. Mortimer also explains the process in his Every Man His Own Broker, 137–45.

59 BEA, M5/213, fols. 60–61.

60 BEA, M5/212, Minutes of the Committee of Inspection; BEA M5/213.

61 Defoe, A Tour Thro’ the Whole Island of Great Britain, 342.

62 Cobbett, William, ed., The Parliamentary History of England, from the Earliest Times to the Year 1803, 36 vols. (London, 1806–20), 22:517–20.

63 The Kentish Companion: Or useful Memorandum and Accompt Book (Canterbury, 1775), 8.

64 BEA, M5/212; M5/213.

65 BEA, M5/213, fol. 61.

66 I am indebted to Natalie Roxburgh for discussions about the transparency of the functions of the Bank of England, especially bookkeeping, and their value in demonstrating the integrity of public credit. Natalie Roxburgh, “The Rise of Public Credit and the Eighteenth-Century English Novel” (PhD diss., Rutgers University, 2011).

67 BEA, M5/213, fol. 68.

68 Roxburgh, Representing Public Credit, 91.

69 BEA, AC4/5, An outline of the history and working of the inscribed stock system, fol. 2.

70 BEA, AC$/5, fol. 3. So efficient was this system that it remained in place until the late nineteenth century.

71 BEA, M5/213, fol. 32.

72 BEA, M5/212, fol. 148.

73 BEA, M5/213, fol. 23.

74 Acres, Bank from Within, 132.

75 Acres, 133.

76 Acres, 179.

77 Defoe, Compleat English Tradesman, 324.

78 Major, Emma, Madam Britannia: Women, Church, and Nation, 1712–1812 (Oxford, 2012), 1.

79 Abramson, Building the Bank, 54.

80 Cited in Mulcaire, T., “Public Credit: Or the Feminization of Virtue in the Marketplace,” PMLA 114, no. 5 (October 1999): 1029–42, at 1031.

81 Mulcaire, “Public Credit,” 1033.

82 Sherman, Sandra, Finance and Fictionality in the Early Eighteenth Century: Accounting for Defoe (Cambridge, 1996), 157.

83 The South-Sea Scheme Detected (London, 1720) quoted in Sherman, Finance and Fictionality, 53.

84 Quoted in Walcot, “Figuring Finance,” 82.

85 Quoted in Walcot, 82.

86 North and Weingast, “Constitutions and Commitment.”

87 Dome, Takuo, The Political Economy of Public Finance in Britain, 1767–1873 (Abingdon, 2004).

88 Reitan, Earl A., Politics, Finance, and the People: Economical Reform in England in the Age of the American Revolution, 1770–92 (Basingstoke, 2007), 134.

89 Dickson, Financial Revolution, 228–41.

90 Dickson, 157–98.

91 Hoppit, Julian, “Compulsion, Compensation and Property Rights in Britain, 1688–1833,” Past and Present, no. 210 (February 2011): 93128, at 125.

92 Cope, S. R., “The Stock Exchange Revisited: A New Look at the Market in Securities in London in the Eighteenth Century,” Economica 45, no. 177 (February 1978): 121, at 3.

93 Abramson, Building the Bank, 70.

94 Quoted in Abramson, 70.

95 BEA, M5/607, fols. 2–3.

96 BEA, M5/213, fol. 120.

97 BEA, M5/213, fol. 120.

98 Trial of John Davis (T17831029-41), 29 October 1783, Old Bailey Proceedings Online, https://www.oldbaileyonline.org/browse.jsp?div=t17831029-41 access date 27 December 2018.

99 Borsay, Peter, “A Room with a View: Visualising the Seaside, c. 1750–1914,” Transactions of the Royal Historical Society 23 (December 2013): 175201, at 181.

100 Abramson, Building the Bank.

101 Abramson, 74.

102 Leemans, Inger, “Verse Weavers and Paper Traders: Financial Speculation in Dutch Theater,” in The Great Mirror of Folly: Finance, Culture and the Crash of 1720, ed. Goetzmann, William N. et al. (New Haven, 2013), 182.

103 Defoe, Daniel, The Anatomy of Exchange Alley: or, a System of Stock-Jobbing (London, 1719), 23.

104 Mortimer, Every Man His Own Broker, 122.

105 BEA, M5/607, Order Books for Porters, fols. 2–3.

106 BEA, M5/213, fol. 64.

107 Ibid, fols. 154, 173.

108 Ibid, fols. 67, 84–85.

109 Ibid, fol. 96.

110 BEA M5/451, Samuel Beachcroft Governor's diary, 1775–1777, fol. 76.

111 Carlos, A. M. and Neal, L., “The Micro-Foundations of the Early London Capital Market: Bank of England Shareholders during and after the South Sea Bubble, 1720–25,” Economic History Review 59, no. 3 (August 2006): 498538; Murphy, Anne L., “Demanding ‘Credible Commitment’: Public Reactions to the Failures of the Early Financial Revolution,” Economic History Review 66, no. 1 (February 2013): 178–97.

112 Reasons Humbly Offered to the Members of the Honourable House of Commons (London, [1756?]) quoted in Banner, Stuart, Anglo-American Securities Regulation: Cultural and Political Roots, 1690–1860 (Cambridge, 1998), 97; Some Considerations on Public Credit and the Nature of Its Circulation (London, 1733) quoted in Banner, Anglo-American Securities Regulation, 103.

113 Pocock, Virtue, Commerce and History, 112.

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