Version classiqueVersion mobile

State Cash Resources and State Building in Europe 13th-18th century

 | 
Katia Béguin
, 
Anne L. Murphy

Markets for Public Debt Securities

Compromised Credibility: the Problems of Trading Debt at the Eighteenth-Century Bank of England

Anne L. Murphy

Texte intégral

Introduction

1The market is a key element of any financial system. If functioning well it allows those in need of finance, be they individuals, business or governments, to locate savers seeking investment opportunities, it facilitates the secondary transfer of already-issued securities, it can reduce costs, help to spread and control risk, and it can facilitate the flow of information. Without a market lenders and borrowers would have to locate each other, a process that in all likelihood would be costly and time-consuming and may result in projects going under- or unfunded.

  • 1 A. M. Carlos and L. Neal, ‘The micro-foundations of the early London capital market’, Economic Hist (...)
  • 2 Anon., Reasons humbly offered to the Members of the Honourable House of Commons, London, 1756?, quo (...)
  • 3 Anon., Some considerations on public credit and the nature of its circulation, London, 1733, quoted (...)

2For the market in government debt during the long eighteenth century, low transaction costs, liquidity and good information flow were not just desirable, they were key to creating the stability and credibility which allowed successive governments to borrow to fund the wars fought in the period between 1689 and 1815.1 This is not just the view formed with the advantage of hindsight. Contemporaries also understood the value of an effective market. As one anonymous pamphleteer writing in the mid-eighteenth century argued, sound public credit required an open market where people could complete their transactions with ‘ease, readiness and dispatch’.2 Another suggested that investors appreciated the market because ‘they can change their Property without Difficulty, and at a Small Expense’. He went on to argue that any regulation could be disastrous for the nation because, if the difficulties of trading in the national debt increased, the public might be ‘unwilling to engage in any new Loan, when the Emergencies of the State may require [its] Assistance’.3

  • 4 A. L. Murphy, ‘Demanding credible commitment: public reactions to the failures of the early financi (...)
  • 5 For a summary of these arguments, see P. G. M. Dickson, The financial revolution in England, London (...)

3Of course, the creation of a liquid market in English government debt was by no means straightforward. The early financial revolution was punctuated by shocks such as the South Sea Bubble and constituted a steep learning curve characterized by experiments in expensive and inefficient fund-raising instruments. For much of the late seventeenth and early eighteenth century the needs of the private individuals who devised those experiments in fund-raising took precedence over the needs of the state.4 Critics argued, as they do now, that the creation of a secondary market, especially one that permitted the use of derivative instruments, encouraged speculation and over-reaction to external shocks. They accused the market and its participants of being fundamentally unpatriotic, as they depressed the prices of the stocks during periods of military difficulties and seemed to be profiting from the nation’s exigencies.5

  • 6 D. North and B. R. Weingast, ‘Constitutions and commitment: the evolution of institutions governing (...)
  • 7 See, for example, G. Clark, ‘The political foundations of modern economic growth, 1540–1800’, Journ (...)
  • 8 For example, P K. O’Brien, ‘The political economy of British taxation, 1660–1815’, Economic History (...)
  • 9 P. G. M. Dickson, The financial revolution…, op. cit.

4Many words have been expended in explaining how and why these difficulties were overcome and a mature and credible system of public debt was established. Perhaps most notably, North and Weingast linked the credibility issue to the constitutional changes that followed the Glorious Revolution. It was this political change, they argued, that helped to enshrine secure property rights for public creditors.6 Their thesis has been challenged on a great number of points.7 Yet the notion of credible commitment itself has proved remarkably resilient. Patrick O’Brien in numerous interventions and John Brewer in the Sinews of power favoured explanations that focused on the system of taxation which underpinned the state’s borrowing activities. The efficiency of the administration of taxes and the appropriation of tax revenue to specific loans, they argued, formed the foundation for trust in public credit.8 Yet these assumptions too can be questioned since frequent and serious shortfalls in tax revenues led to the state’s inability to honour its financial promises especially during the later seventeenth and early eighteenth centuries.9

  • 10 A. M. Carlos and L. Neal, ‘The micro-foundations…’, op. cit.; A. L. Murphy, ‘Demanding credible…’, (...)

5More recently, historians of the financial revolution have focused on the value of a liquid market in securities in providing the guarantees required by public creditors.10 A liquid market, it is argued, allowed the negotiation of value of the state’s offerings, gave the public creditors a forum for expressing their views through the purchase and sale of securities and kept the state aware of market opinion through price movements. It encouraged a broad range of investors who were willing to make both short- and long-term investments in the knowledge that should they wish to liquidate their holdings that would be easily achieved, and it provided assurances for those many individuals who used the national debt for the purposes of creating nest-eggs, dowries, retirement funds or facilitating intergenerational transfers. As illustrated in figure 1, although the number of transactions supported by London’s market was initially limited, the issue of consolidated annuities in 1751 did provide a consistent and fully liquid debt instrument which stimulated the development of that market. Arguably, the establishment of an easily transferable security (the 3% consol) and the development of a mature, liquid market in that stock and others from the 1750s onwards was one of the key achievements of the English financial revolution.

Figure 1. Annual numbers of transfers of stock, 1694–1754

Figure 1. Annual numbers of transfers of stock, 1694–1754
P. G. M. Dickson, The financial revolution…, pp. 529–532.
  • 11 A. L. Murphy, ‘Learning the business of banking: the recruitment and training of the Bank of Englan (...)

6The Bank of England’s direct involvement in the provision of services to this market emerged in two ways. First, over the course of the eighteenth century and particularly in the period after the collapse of the South Sea Bubble, the Bank took on more and more responsibility for the management of the state’s debt. Hence, as indicated by table 1, by the middle of the eighteenth century the Bank of England was managing the lion’s share of that debt. Its involvement was to grow still further. War, and in particular, the War of American Independence and the later wars with Revolutionary and Napoleonic France provided the severe shocks of increased volume and volatility. This placed a significant strain on resources and manpower and required the creation of an effective and speedy infrastructure for the registration of transfers and the collection of dividends. There was a corresponding increase in the number of clerks employed by the Bank. From a complement of 17 clerks in 1694, the workforce expanded to around 100 in the 1730s when the Bank moved to Threadneedle Street. It then rose to 200 in the 1760s, to more than 300 by 1783 and more than 900 by 1815.11 The expansion in the Bank’s business also required significant physical expansion which led to consistent purchases and appropriations of land surrounding the Threadneedle Street site and the expansion of its office space.

Table 1. Agencies handling the national debt, c. 1764

Principal sum (£)

Percentage handled

Annual payments (£)

Percentage handled

Handled at the Bank

77,265,945

69.85

2,682,163

70.72

Handled at South Sea House

27,125,310

24.52

829,507

21.87

Handled at East India House

4,200,000

3.80

127,687

3.37

Handled at the Exchequer

2,022,582

1.83

153,236

4.04

Total national debt

110,613,837

3,792,593

Source: J. H. Clapham, The Bank of England: a history, Cambridge, Cambridge University Press, 1966, p. 103.

Note: Amounts rounded to the nearest £1.

7Secondly, the Bank provided a space for the negotiation of transactions. During the afore-mentioned building work in the early 1760s, the Bank undertook the construction of a new set of offices for the transfer of securities and payment of dividends. These stock transfer offices were arranged around a large rotunda, which was quickly co-opted by London’s large group of brokers and jobbers as a market for the buying and selling of the Bank’s shares and government securities. Although perfectly logical in spatial terms and much appreciated by potential participants in the market who could easily identify the place where their business could be done quickly and efficiently, the location of the market within the Bank created a potential problem of integrity. Given that the Bank considered itself to be the guardian of public credit, how was it to separate its management of the nation’s debt from the provision of an environment for the trading of that debt? How was it to appear aloof from the hustle, bustle and supposed duplicity of the financial market, when that market was housed under its roof? How was it to prevent its transfer and dividend clerks from taking advantage of their proximity to the market and either giving business to favoured brokers, trading in securities themselves or, taking advantage of a captive clientele by acting as brokers themselves? It is with these questions and the implications of their answers for the credibility of the English national debt during the later eighteenth century, that this chapter is concerned.

I. Managing the Space within the Bank

  • 12 D. Abramson, Building the Bank of England: money, architecture, society, 1694–1942, Yale, Yale Univ (...)

8There is strong evidence to suggest that, when undertaking the rebuilding of the Bank of England during the eighteenth century, both its architects and its directors were concerned with the image the building and its adornments presented to London. The historian of the Bank’s architecture argues that the Bank was designed along lines that represented corporate virtue and connections to the state. Thus, overt ostentation was eschewed although the aesthetic of the building was considered important and did surpass that of the Exchequer and at least equal that of the grand new buildings of the Treasury and the Admiralty.12 The iconography within and outside the building emphasized the Bank’s usefulness to the country and its government and its connections to same. Thus the entrance to the Pay Hall was topped by a figure of Britannia pouring out the fruits of commerce from her cornucopia, while also carrying the shield and spear which symbolized the defence of the nation.

9The key point to be made here is that in its architecture and adornments, the Bank was making a statement of probity and security and emphasizing its connections to the state. Yet there were spaces within the Bank, notably the Rotunda where securities were traded and the surrounding transfer and dividend offices where the shareholders and public creditors went to register their sales and purchases and collect their dividends, which also contradicted this message. Of course, the provision of a central market place for the exchange of these securities contributed to making the market efficient enough that the state could keep borrowing significant amounts at reasonable rates. Yet, the Bank’s physical connections to the stock-jobbers, brokers, noise, confusion and potential fraud and deceit of the secondary market still had to be managed in terms of organization and provision of services.

  • 13 Ibid., pp. 52–54.
  • 14 Ibid., p. 70.

10This attempt at management began with the physical layout of the Bank. In the Bank of the 1730s–1750s, the architect, George Sampson, ensured that the market area and the accountants’ office in which the records and stock ledgers pertaining to this business were kept were separated by the greatest possible physical distance. This symbolized the segregation of the market and its administration, thus underlining the Bank’s neutrality and credibility.13 In Robert Taylor’s later extensions to the Bank, the new east wing became the centre for market activity. The centrepiece was the Rotunda, a domed, circular hall, 62 feet high and wide.14 As we have seen, it was here that the market made its home. Around the Rotunda were arranged four transfer offices where the buyers and sellers would go to officially register their transactions. But just as Sampson had enforced the physical separation of the Bank and market, so did Taylor. The new east wing had no direct access to the interior of the Bank and not even to the Pay Hall. Those wishing to conduct other sorts of business at the Bank and even its own clerks had either to access the east wing directly from the street or, if coming from the interior of the Bank, to walk through the Bank’s courtyard in order to access the new east wing.

  • 15 Quoted in D. Abramson, Building the Bank…, op. cit., p. 70.
  • 16 T. Mortimer, Every man his own broker: or a guide to Exchange-Alley, London, 1762, p. 133.
  • 17 Bank of England Archives (hereafter BEA), Old Book of Orders for Porters and Watchmen, M5/607, fos. (...)
  • 18 D. Abramson, Building the Bank…, op. cit., p. 74.

11As can be seen in Thomas Rowlandson’s 1792 image of the Rotunda, the space contrasted with the chaos of Exchange Alley and its environs in terms of style but much else remained the same: noise and confusion reigned. As one contemporary put it: ‘a vast crowd of Stock-brokers, Stock-jobbers, and other persons having business in the Funds, daily assemble to make purchases, drive bargains, etc.’.15 On high volume days the business even spilled out into the transfer halls. Other sources too emphasized the crowds and confusion in the Rotunda. Mortimer warned people what they would find when entering this space. He advised novices to ‘be not dismayed at the wild uproar, and confused noise which will at first strike your astonished senses’.16 The Bank’s own records also note the crowds, the crush and the cacophonous noise. In the Bank’s porters’ written orders, they were instructed, in respect of the Rotunda, to suppress any disorderly behaviour ‘and to preserve peaceable conduct as much as possible’!17 This also seemed to encompass the removal of undesirables from the Rotunda: beggars and street sellers were directly mentioned, as were street entertainers and pickpockets. There are indications that prostitutes found the Bank’s environs a good place to find customers. The Bank also attracted tourists who came to experience one of London’s landmarks and view the workings of the financial market. It is probable that local spectators also came to gawp. The Rotunda, therefore, was much more than just the market in securities, it was spectacle, entertainment. This point is underlined by its architecture which echoed that of places of commercialized leisure such as Ranelagh Gardens, the music room at Vauxhall Gardens and the domed ballroom at Oxford Street Pantheon.18 Unsurprisingly though, this made it a very difficult space to manage and made the business which underpinned this market, the registration of securities and the payment of dividends, equally problematic.

Thomas Rowlandson, The Bank, London, 1792. © The Trustees of the British Museum

II. How Did the Bank Support the Transfer and Registration of Securities and the Payment of Dividends?

  • 19 BEA, An outline of the history and working of the inscribed stock system, AC4/5, fo. 2.
  • 20 Ibid.., fo. 3. So efficient was this system that it remained in place until the late nineteenth cen (...)

12The Bank’s attempts to manage its physical space were matched by its attempts to ensure the effectiveness of its procedures for managing the national debt. It is clear from the records that it had to dedicate very significant resources and manpower to the management of the state’s debt. Moreover, the high degree of specialization, evident from the way the offices were organized and jobs allocated, points to the complexity and importance of the work undertaken. The actual process of transferring shares and government debt at the Bank of England, on the other hand, was fairly straightforward. The Bank operated what was known as the inscribed stock system, which simply meant that the transfer of any holding out of a stock-holder’s name was achieved by record in the Bank’s books and that the stock-holder’s title was evidenced only by entries in the Bank’s books. Thus no stock certificate was issued and although receipts were issued, these were only to act as a memorandum for the stock-holder. They were in no way legally binding.19 Because of the way the system worked, personal attendance was required by the seller or their appointed attorneys. The buyer was also supposed to attend to sign his acceptance of the stock in the transfer book but, in practice, although it remained part of the constitution of the Bank, the requirement seems to have been dropped from around the 1760s onwards. The advantages of this system were that it was simple, quick and straightforward. It fulfilled all the requirements then for the support of a liquid and efficient market. Moreover, no consequence was attached to the loss or theft of a stock receipt since the Bank itself held the only legally binding record of ownership.20 As a consequence, of course, the pressure on the Bank to maintain accurate records and to protect those records was tremendous.

  • 21 BEA, Minutes of the Committee of Inspection, M5/213, fos. 60–61.

13It is possible to reconstruct the business of managing the national debt from the reports of a Committee of Inspection that was appointed in 1783 to examine the conduct of the Bank of England’s business. That report details the work of the transfer offices in some depth. The largest of those offices was the 3% consols office. There were 54 clerks working there, under the control of Mr Bowler Miller and Mr Abraham Vickery. Mr Miller informed the Committee of Inspection that there were 22 ledgers and alphabets, 24 dividend books and 48 transfer books in use.21 When the seller or buyer and seller came to the Bank to register their transaction, they would first fill out a ticket. Before any transfer was registered the stock ledger had to be checked to establish that there was indeed that amount in the seller’s account. This job was done by the looker. A specially prepared abstract was made of the main jobbers’ accounts since it was assumed that they would be regularly at the Bank and it was deemed more efficient to have their details to hand. These abstracts seem also to have acted as a running balance during the day. Once it was established that there was sufficient stock on the account, the enterer completed the transfer in the transfer book. Each party was supposed to sign but in practice only the seller’s signature was insisted upon. The signatures were not checked by anyone in the Bank. Each transfer was also counter-signed by one of the clerks. It was then the clerks’ task to update the stock ledgers; this generally happened the following day. Those records were also subject to an independent check.

  • 22 Ibid., fo. 23.

14Indeed, security procedures to eliminate mistakes and prevent the loss of records were numerous. Each day an abstract of all transfers made was taken and put into the mail to be removed from the Bank overnight as a precaution against the loss of the records due to fire or some other accident. Records that had to remain in the Bank overnight were stored in wheeled trucks that could be easily rolled out of the Bank in an emergency. The paper record of the Bank’s business was to be protected at all costs. Thus, while there were certainly gaps in the system, such as the failure to check signatures, the procedures were consistently concerned with maintaining the integrity of the record of the public debt whilst still providing a speedy service to the public. Indeed, the Committee of Inspection observed that ‘so many checks [were] established as to render it scarcely possible that an error should be overlooked’.22

  • 23 Ibid., fo. 68.

15The Bank’s openness to scrutiny reinforced the investing public’s sense of the security and integrity of its record-keeping. Much of the Bank’s public-facing business took place in open plan offices which allowed the process of maintaining and recording ownership of the public debt to be observed. Ledgers could also be called by customers who wished to observe their account and by notaries and attorneys acting on their client’s behalf. Indeed, the clerks reporting to the Committee of Inspection emphasized that the notaries who came to inspect the foreign accounts did so daily at around five o’clock and that they expected to find the records up to date.23

  • 24 Ibid., fo. 136.

16It was the timeliness, rather than the security, of the service to customers that seemed to create the greatest problems. In their testimonies to the Committee of Inspection, the clerks in the transfer and dividend offices mentioned time and again the stresses of working under pressure, the need to provide a timely service to the public and the number of customer complaints when that could not be achieved. The Committee also particularly noted the ‘very frequent complaints, in regard to delays and inconveniences experienced by the Publick in receiving their Dividends’.24 The problem it transpired was that very often transfers were not completed before a Bank-imposed deadline of one o’clock, which then delayed the payment of dividends which was not supposed to start until all transfers had been completed. The problems were apparently exacerbated by the jobbers all putting their tickets in at around a quarter to one and by the confined space in the offices which often necessitated piling books on top of each other. The problem was common to all the transfer offices but particularly bad in the 3% consols office. In this office that meant that while the transfers were supposed to be completed by 1.00 pm, the work invariably dragged on until 2.00 pm or later, thus delaying those who were waiting to collect their dividends.

17It is notable that, in response to the complaints made by customers, the Committee of Inspection did recommend a series of alterations to working practices. Hours of opening were changed so that the final time for putting in transfer tickets became 12.30, working practices were revised and more clerks were taken on in response to numerous clerks pointing out the difficulties of accommodating customers and public creditors in a timely fashion. In all these alterations, the first consideration seems to have been the service to the public. Arguably, the Bank of England worked hard to ensure the timely and effective management of the national debt as part of its perceived duty both to the public and to the state.

III. Managing the Clerks

  • 25 Ibid., fo. 64.

18Although the concern evinced by the clerks for the public and their needs was unquestionable, the line that the Bank had tried to create between its own functions and the market was blurred in almost every respect. The open plan offices that represented transparency and accountability also allowed persons who were familiar with the system to go behind the desks and peruse the ledgers whenever they pleased. The clerks protested but, as Mr Vickery noted, ‘there are 2 or 3 Gentlemen of the first consideration in Trade who persist in doing so, notwithstanding his remonstrances against it’.25 Most problematic of all though was the blurring of the lines between the Bank and the market that flowed from the Bank itself as the clerks who worked in the transfer offices supplemented their incomes by acting as brokers and jobbers.

  • 26 Ibid., fos. 173, 154.
  • 27 Ibid., fos. 67, 84, 85.

19Paid involvement in the financial market was banned by the Bank for a number of reasons. It distracted the clerks, led to problems with the gentlemen of the stock exchange and was incompatible with the Bank’s attempts to assert its distance from the market. As the Committee of Inspection asserted, clerks who did indulge were in danger of having their minds seduced ‘from regular employment in an easy service, and attaching them to objects inviting though dangerous …’.26 But it seems that the rules were commonly flouted. Hence when the Committee took testimony from the clerks themselves Mr Aldridge confessed that he had now and again acted as a broker but had never jobbed. Mr Windsor said he had acted as a broker and although he had not jobbed recently, ‘he has now and then sold and bought a little stock which he has held for his friends’. Mr Crockford allowed that ‘he had made Bargains in Stock for time, both on his own account and on that of his Principals’.27

  • 28 Ibid., fo. 96.

20Mr Brown also admitted to acting as a broker occasionally ‘but in a very trifling way’. He, in common with many of other clerks who admitted transgressions, claimed that he did not know of any order against acting as a broker.28 This seems disingenuous at best. Samuel Beachcroft’s governor’s diary, which covered the period from 1775 to 1777, contained a number of references to anonymous informers against clerks acting as jobbers and brokers, suggesting that this kind of activity was brought to the Bank’s attention on a regular basis. Moreover, Beachcroft’s disapproval was passed on to the clerks. He recorded in his diary:

  • 29 Ibid., fo. 76.

‘Upon an anonymous letter from the stock brokers and jobbers, Mr Pearce and Mr Pemberton were called in and reprimanded for dealing in Stocks by the Brokers transferring stock into their names and retransferring said stock by way of cloak to the brokers name, upon their promising never to act again in the same manner they were forgiven … Mr Stonehouse and Mr Jewson were called in and ordered to acquaint every clerk in each of their departments that if they were found acting as brokers in future they would certainly be discharged.’29

  • 30 Ibid., fos. 111, 109.

21Mr Beachcroft’s admonishments seem to have made little impact. Both Pearce and Pemberton were still employed by the Bank in 1783 when the Committee of Inspection convened and both confessed to still being involved in the financial markets.30

  • 31 Ibid., fo. 56.

22Transfer office clerks, therefore, did have opportunities for taking advantage of their positions to generate additional earnings. Indeed, stock-jobbing and broking were practiced with worrying regularity by clerks in the right place at the right time. It is impossible to know how much these activities yielded. Some men undoubtedly dabbled occasionally in the markets making a few pounds here and there. Others, especially those operating in partnerships with brokers, might have made significant profits. But it should also be acknowledged that such activities encompassed some risk for the clerk. Mr Kingdon of the 3% reduced consols office informed the Committee that while he did not regularly act as a jobber or broker he had in the past purchased £2,000 stock on time for a friend who had later refused to accept the deal, leaving Mr Kingdon with an £150 debt.31

  • 32 BEA, Memorandum book of Samuel Bosanquet, 1783–1791, M5/471, passim.
  • 33 W. M. Acres, The Bank of England from within, 1694–1900, London, printed for the Governor, 1931, pp (...)

23Although the full story did not emerge at the time of the Committee of Inspection’s report, one of the most interesting violators of the Bank’s rules was one of the heads of the 3% consols office: Abraham Vickery. He was clearly a complex and probably not very pleasant character. He was the only one of the office heads to criticize his staff openly to the Committee of Inspection and he made a myriad of off-the-record complaints which were recorded in a private notebook kept by Samuel Bosanquet, one of the inspectors. Many of those complaints touched on clerks operating in the markets. But also in the pages of Bosanquet’s notebook we find other clerks’ criticisms of Vickery. It seems that a number of clerks had poor relations with Vickery, that ‘bad words’ had been exchanged in a number of instances and that there was ‘cause for discontent in the Consols office against Mr Vickery’. Moreover, Mr Nesbitt reported that Mr Vickery had many enemies in the Stock Exchange because he was viewed to have too close a connection with one of the brokers. He also noted that Vickery ‘acts improperly and over rough with the clerks’ and that he sometimes came late to work. Nesbitt himself was judged by Bosanquet to have been intelligent, gentlemanlike and respectable, so his testimony might be judged as being reliable.32 Other clerks too spoke of Mr Vickery as being a partner in a broking firm and privileging his own customers over those of the Bank. It is not possible at such a distance to know precisely the rights and wrongs of the squabbles in the consols office but one thing clearly emerges and that is that the supposed separation between Bank and market was thoroughly compromised in the case of Abraham Vickery. Indeed, in the 1790s it was discovered by the Bank that Abraham Vickery was still in partnership with a stockbroker named Salmon. After promising to dissolve the partnership, he was allowed to continue in his position only to be found a few years later still indulging in the stock-broking business, at which point he was forced into early retirement from the Bank.33

Conclusion

24The chief theme of this chapter has been that by the middle of the eighteenth century, the Bank of England found itself in a most peculiar position. It was the self-styled guardian of public credit, an institution which stood aloof as mediator between the state and its creditors, and, at the same time, the location of a market that was often criticized for its supposed attempts to undermine the stability of the state and for taking advantage of the exigencies of war. The Bank dealt with this by attempting to create both physical and business separation between the business of managing the public credit and the business of trading the government’s debt. In this, it was largely unsuccessful. The market encroached on the office spaces. The chief jobbers and brokers took advantage of their positions by going behind the desks to check ledgers, dividend and transfer clerks were tempted often into jobbing and broking and the admittance of the public into the Bank’s inner spaces created endless security risks. The Bank, in other words, could not maintain that distance from the market that it deemed necessary to demonstrate its careful management of the state’s debt. But, on the other hand, the location of the market within the Bank’s walls did serve several useful purposes. It made the market easy to locate and accessible, if not always easy to negotiate. It allowed the visitor to the Bank to observe all the processes of providing public credit. Indeed, the Bank was undeniably a space in which public credit was put on display. From its grand architecture to the open-plan arrangement of the offices to the Rotunda where the brokers and jobbers gathered, visitors were presented with images of public credit at work. Finally, the location of the market within the Bank helped to turn the Bank itself into a spectacle, an attraction for tourists and locals where the financial integrity of the state was enacted almost as entertainment. Arguably then, despite all the potential disadvantages of locating the market within the Bank, wider and more important purposes were indeed realized, those of exposing the functioning of the market in the state’s debt to scrutiny and demonstrating the credibility of public credit.

Notes

1 A. M. Carlos and L. Neal, ‘The micro-foundations of the early London capital market’, Economic History Review, 59, 2006, pp. 498–538.

2 Anon., Reasons humbly offered to the Members of the Honourable House of Commons, London, 1756?, quoted in S. Banner, Anglo-American securities regulation: cultural and political roots, 1690–1860, Cambridge, Cambridge University Press, 2002, p. 97.

3 Anon., Some considerations on public credit and the nature of its circulation, London, 1733, quoted in S. Banner, Anglo-American securities regulation…, op. cit., p. 103.

4 A. L. Murphy, ‘Demanding credible commitment: public reactions to the failures of the early financial revolution’, Economic History Review, 66, 2013, pp. 178–197.

5 For a summary of these arguments, see P. G. M. Dickson, The financial revolution in England, London, Macmillan, 1967, chapter 2.

6 D. North and B. R. Weingast, ‘Constitutions and commitment: the evolution of institutions governing public choice in 17th-century England’, Journal of Economic History, 49, 1989, pp. 803–832.

7 See, for example, G. Clark, ‘The political foundations of modern economic growth, 1540–1800’, Journal of Interdisciplinary History, XXV, 1996, pp. 563–588; M. Flandreau and J. H. Flores, ‘Bonds and brands: foundations of sovereign debt markets, 1820–1830’, Journal of Economic History, 69, 2009, pp. 646–684; P. K. O’Brien, ‘The nature and historical evolution of an exceptional fiscal state and its possible significance for the precocious commercialization and industrialization of the British economy from Cromwell to Nelson’, Economic History Review, 64, 2011, pp. 408–446; N. Sussman and Y. Yafeh, ‘Institutional reforms, financial development and sovereign debt: Britain, 1690–1790’, Journal of Economic History, 66, 2006, pp. 906–935.

8 For example, P K. O’Brien, ‘The political economy of British taxation, 1660–1815’, Economic History Review, 41, 1988, pp. 1–32; J. Brewer, The sinews of power: war, money and the English state, 1688–1783, London, Unwin Hyman, 1989.

9 P. G. M. Dickson, The financial revolution…, op. cit.

10 A. M. Carlos and L. Neal, ‘The micro-foundations…’, op. cit.; A. L. Murphy, ‘Demanding credible…’, op. cit.

11 A. L. Murphy, ‘Learning the business of banking: the recruitment and training of the Bank of England’s first tellers’, Business History, 52, 2010, pp. 150–168; J. Giuseppi, The Bank of England: a history from its foundation in 1694, London, H. Regnery Co., 1966, p. 56; D. Kynaston, The City of London, vol. I: A world of its own, 1815–1890, London, Chatto & Windus, 1995, p. 30.

12 D. Abramson, Building the Bank of England: money, architecture, society, 1694–1942, Yale, Yale University Press, 2005, p. 57.

13 Ibid., pp. 52–54.

14 Ibid., p. 70.

15 Quoted in D. Abramson, Building the Bank…, op. cit., p. 70.

16 T. Mortimer, Every man his own broker: or a guide to Exchange-Alley, London, 1762, p. 133.

17 Bank of England Archives (hereafter BEA), Old Book of Orders for Porters and Watchmen, M5/607, fos. 2–3.

18 D. Abramson, Building the Bank…, op. cit., p. 74.

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

20 Ibid.., fo. 3. So efficient was this system that it remained in place until the late nineteenth century.

21 BEA, Minutes of the Committee of Inspection, M5/213, fos. 60–61.

22 Ibid., fo. 23.

23 Ibid., fo. 68.

24 Ibid., fo. 136.

25 Ibid., fo. 64.

26 Ibid., fos. 173, 154.

27 Ibid., fos. 67, 84, 85.

28 Ibid., fo. 96.

29 Ibid., fo. 76.

30 Ibid., fos. 111, 109.

31 Ibid., fo. 56.

32 BEA, Memorandum book of Samuel Bosanquet, 1783–1791, M5/471, passim.

33 W. M. Acres, The Bank of England from within, 1694–1900, London, printed for the Governor, 1931, pp. 244–245.

Table des illustrations

Titre Figure 1. Annual numbers of transfers of stock, 1694–1754
URL http://books.openedition.org/igpde/docannexe/image/3984/img-1.jpg
Fichier image/jpeg, 120k
Crédits Thomas Rowlandson, The Bank, London, 1792. © The Trustees of the British Museum
URL http://books.openedition.org/igpde/docannexe/image/3984/img-2.jpg
Fichier image/jpeg, 997k

Auteur

Anne L. Murphy is Reader in History at the University of Hertfordshire. Her research focuses on eighteenth-century British financial markets and institutions. She is particularly interested in the role of the Bank of England as intermediary between the state and its creditors. She has recently published: ‘Demanding credible commitment: public reactions to the failures of the early financial revolution’, Economic History Review, 66, 2013, pp. 178–197; The origins of the English financial markets, Cambridge, Cambridge University Press, 2009 (paperback, 2012); ‘Learning the business of banking: the recruitment and training of the Bank of England’s first tellers’, Business History, 52, 2010, pp. 150–168; ’Trading options before Black-Scholes: a study of the market in late seventeenth-century London’, Economic History Review, 62, 2009, pp. 8–30.

© Institut de la gestion publique et du développement économique, 2017

Conditions d’utilisation : http://www.openedition.org/6540

Acheter

Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search