Great Britain

Dutch investment in the British public debt dated from the 1690s, when the royal debt was transformed into a public debt and Parliament guaranteed loan issues, securing them on specific sources of public revenue. British financial practices were partly fashioned after techniques introduced earlier in the Dutch Republic, although Britain made significant improvements. But the British debt may have attracted Dutch investment not so much because of reforms in progress in account keeping and other administrative practices as because the debt was made the responsibility of a representative institution and thereby came to resemble the public debts of major government institutions in the Dutch Republic. There bodies that claimed to have a representative character had long carried the principal burden of raising credit under a more appealing framework than the princely responsibility identified with absolutist monarchies.

Other factors, too, may explain the attractiveness of the British debt. Dutch rentiers were familiar with the loan formats employed in Britain: life and term annuities and, from 1715, redeemable (but in practice perpetual) annuities. The principal agencies administering the public debt were also familiar, the exchequer for its resemblance to the receivers general of the provinces and the Generality, and the Bank of England for its extensive involvement in discounting commercial paper. Moreover, the financial links necessary for direct investment in loans issued in London were available in long-standing contacts between the two states in commerce and commercial finance.