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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.
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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 

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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.

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