Hostname: page-component-8448b6f56d-jr42d Total loading time: 0 Render date: 2024-04-24T07:11:59.244Z Has data issue: false hasContentIssue false
  • English
  • Français

The Stop of the Exchequer and the Secondary Market for English Sovereign Debt, 1677–1705

Published online by Cambridge University Press:  14 March 2019

Ling-Fan Li
Ling-Fan Li*
Affiliation:
Ling-Fan Li is Assistant Professor, Department of Economics, National Tsing Hua University, R703, TSMC Building, No. 101, Section 2, Kuang-Fu Road, Hsinchu, Taiwan 30013. E-mail: lilf@mx.nthu.edu.tw.
Get access Rights & Permissions [Opens in a new window]

Abstract

Based on information related to the Stop of Exchequer, 1672, this article calculates the current yields of sovereign debt and examines the effect of the Glorious Revolution on the government’s credibility. The results show that even though the interest payment had not been paid for years, when Parliament authorized the resumption of payment, the current yields fell not only below the level when the interest payment was made by Charles II, but quickly converged to the rates of return of alternative investment. The movement of current yields supports that the constitutional change of 1689 did enhance the government’s credibility.

Type
Article
Information
The Journal of Economic History , Volume 79 , Issue 1 , March 2019 , pp. 176 - 200
Copyright
Copyright © The Economic History Association 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 Ann Carlos, Anne Murphy, Patrick Wallis, and the two anonymous referees for their invaluable comments and suggestions in the preparation of this article. The errors that remain are, of course, my own responsibility.

References

REFERENCES

Barsky, Robert B., Juster, F. Thomas, Kimball, Miles S., et al. “Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study.” Quarterly Journal of Economics 112, no. 2 (1997): 537–79.CrossRefGoogle Scholar
Browning, Andrew, ed., English Historical Documents, Volume VI, 1660–1714. Oxford: Routledge, 1996.Google Scholar
Carlos, Ann M., Fletcher, Erin K., Neal, Larry, et al. “Financing and Refinancing the War of the Spanish Succession, and then Refinancing the South Sea Company.” In Questioning Credible Commitment: Perspectives on the Rise of Financial Capitalism, edited by Coffman, D’Maris, Leonard, Adrian, and Neal, Larry, 147–68. Cambridge: Cambridge University Press, 2013.10.1017/CBO9781139856034.008CrossRefGoogle Scholar
Carlos, Ann M., Key, Jennifer, and Dupree, Jill L.. “Learning and Creation of Stock-Market Institutions: Evidence from the Royal African and Hudson’s Bay Companies, 1670–1700.” Journal of Economic History 58, no. 2 (1998): 318–44.10.1017/S0022050700020532CrossRefGoogle Scholar
Carlos, Ann M., and Neal, Larry. “Women Investors in Early Capital Markets, 1720–1725.” Financial History Review 11, no. 2 (2004): 197–224.10.1017/S0968565004000137CrossRefGoogle Scholar
Carlos, Ann M., and Neal, Larry. “The Micro-Foundations of the Early London Capital Market: Bank of England Shareholders during and after the South Sea Bubble, 1720–1725.” Economic History Review 59, no. 3 (2006): 498–538.10.1111/j.1468-0289.2005.00332.xCrossRefGoogle Scholar
Carlos, Ann M., and Van Stone, Jill. “Stock Transfer Patterns in the Hudson’s Bay Company: A Study of the English Capital Market in Operation, 1670–1730.” Business History 38, no. 2 (1996): 15–39.10.1080/00076799600000049CrossRefGoogle Scholar
Carruthers, Bruce G. City of Capital: Politics and Markets in the English Financial Revolution. Chichester, U.K. and Princeton, NJ: Princeton University Press, 1996.Google Scholar
Chandaman, C. D. The English Public Revenue, 1660–1688. Oxford: Clarendon Press, 1975.Google Scholar
Chaudhuri, K. N. The Trading World of Asia and the English East India Company 1660–1760. Cambridge: Cambridge University Press, 1978.10.1017/CBO9780511563263CrossRefGoogle Scholar
Clark, Gregory. “The Political Foundations of Modern Economic Growth, 1540–1800.” Journal of Interdisciplinary History 26, no. 4 (1996): 563–88.10.2307/205042CrossRefGoogle Scholar
Coffman, D’Maris. Excise Taxation and the Origins of Public Debt. London: Palgrave MacMillan, 2013.10.1057/9781137371553CrossRefGoogle Scholar
Coleman, Donald C. Sir John Banks, Baronet and Businessman: Study of Business, Politics, and Society in Later Stuart England. Oxford: Clarendon Press, 1963.Google Scholar
Davies, K. G. “Joint-Stock Investment in the Later Seventeenth Century.” Economic History Review 4, no. 3 (1952): 283–301.10.2307/2599423CrossRefGoogle Scholar
Dickson, P. G. M. The Financial Revolution in England: A Study in the Development of Public Credit 1688–1756. London: Macmillan, 1967.Google Scholar
Eckel, Catherine C., and Grossman, Philip J.. “Sex Differences and Statistical Stereotyping in Attitudes toward Financial Risk.” Evolution and Human Behavior 23, no. 4 (2002): 281–95.10.1016/S1090-5138(02)00097-1CrossRefGoogle Scholar
Epstein, S. R. Freedom and Growth: The Rise of States and Markets in Europe, 1300–1750. London: Routledge, 2000.10.4324/9780203183281CrossRefGoogle Scholar
Feavearyear, Albert E. The Pound Sterling: A History of English Money. Oxford: Clarendon Press, 1963.Google Scholar
Figley, Paul F., and Tidmarsh, Jay. “The Appropriations Power and Sovereign Immunity.” Michigan Law Review 107, no. 7 (2009): 1207–67.Google Scholar
Horsefield, J. Keith. “The ‘Stop of the Exchequer’ Revisited.” Economic History Review 35, no. 4 (1982): 511–28.10.2307/2595405CrossRefGoogle Scholar
Melton, Frank T. Sir Robert Clayton and the Origins of English Deposit Banking, 1658–1685. Cambridge: Cambridge University Press, 1986.Google Scholar
Melton, Frank T. “Deposit Banking in London, 1700–90.” Business History 28, no. 3 (1986): 40–50.10.1080/00076798600000029CrossRefGoogle Scholar
Milevsky, Moshe A. The Day the King Defaulted: Financial Lessons from the Stop of the Exchequer in 1672. London: Palgrave Macmillan, 2017.10.1007/978-3-319-59987-8CrossRefGoogle Scholar
Murphy, Anne L. “Demanding ‘Credible Commitment’: Public Reactions to the Failures of the Early Financial Revolution.” Economic History Review 66, no. 1 (2013): 178–97.10.1111/j.1468-0289.2011.00649.xCrossRefGoogle Scholar
Murphy, Anne L. The Origins of English Financial Markets: Investment and Speculation before the South Sea Bubble. Cambridge: Cambridge University Press, 2009.Google Scholar
North, Douglass C., and Weingast, Barry R.. “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice on Seventeenth-Century England.” Journal of Economic History 49, no. 4 (1989): 803–32.10.1017/S0022050700009451CrossRefGoogle Scholar
Quinn, Stephen. Banking before the Bank: London’s Unregulated Goldsmith-Bankers, 1660–1694. Unpublished, Ph.D. thesis, University of Illinois, 1994.Google Scholar
Quinn, Stephen. “The Glorious Revolution’s Effect on English Private Finance: A Microhistory, 1680–1705.” Journal of Economic History 61, no. 3 (2001): 593–615.Google Scholar
Quinn, Stephen. “Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1688–1750.” Unpublished Manuscript, Texas Christian University, 2006.CrossRefGoogle Scholar
Richards, Richard D. “The ‘Stop of the Exchequer’.” Economic History: Supplement to the Economic Journal 2 (1930): 45–62.Google Scholar
Richards, Richard D. The Early History of Banking in England. Oxford: Routledge, 1958.Google Scholar
Roseveare, Henry G. The Advancement of the King’s Credit, 1660–1672. Unpublished, Ph.D. thesis, Cambridge University, 1962.Google Scholar
Shaw, William A. ed. Calendar of Treasury Books, Volume 5, 1676–1679. London, 1911. British History Online, https://www.british-history.ac.uk/cal-treasury-books/vol5/pp534-551 (accessed 8 November 2018).Google Scholar
Sundén, Annika E., and Surette, Brian J.. “Gender Differences in the Allocation of Assets in Retirement Savings Plans.” American Economic Review 88, no. 2 (1998): 207–11.Google Scholar
Sussman, Nathan, and Yafeh, Yishay. “Institutional Reforms, Financial Development and Sovereign Debt: Britain 1690–1790.” Journal of Economic History 66, no. 5 (2006): 906–35.10.1017/S0022050706000374CrossRefGoogle Scholar
Temin, Peter, and Voth, Hans-Joachim. “Private Borrowing during the Financial Revolution: Hoare’s Bank and Its Customers, 1702–24.” Economic History Review 61, no. 3 (2008): 541–64.10.1111/j.1468-0289.2007.00420.xCrossRefGoogle Scholar
Wells, John, and Wills, Douglas. “Revolution, Restoration, and Debt Repudiation: The Jacobite Threat to England’s Institutions and Economic Growth.” Journal of Economic History 60, no. 2 (2000): 418–41.10.1017/S002205070002516XCrossRefGoogle Scholar