In the early days of government borrowing, public borrowing went hand-in-hand with estates and inheritances. Bonds and annuities, both means by which states in early modern Europe borrowed, were also convenient ways of transferring wealth to widows and heirs. Perhaps nowhere was this association clearer than in London, especially in the 17th century. The City…
Financial development comes in waves, often washing up in the same place, whether 17th century Holland or 18th century London. In the Late Middle Ages, the centers of European finance were largely in Italy. Many innovations in finance during this era, from bills of exchange to insurance and double-entry bookkeeping to public bonds, either originated…
For the entirety of the 19th century, Paris had two stock exchanges. One was the official Paris Bourse, relatively well-regulated and selective in its listing of securities. The other was an unregulated market called the Coulisse. The Paris market was big enough for both exchanges and perhaps needed both of them, in contrast to the…
During the First World War, governments were financially strained to an unprecedented degree by the costs of war. Across Europe, governments introduced new taxes, including income taxes, suspended the link between gold and paper money, and raised new loans by appealing directly to the patriotism of the public. While these drastic maneuvers in times of…
In early modern Europe, currency was far less standardized than it is today. There were several different metals with monetary significance: gold, silver, and copper. Countries usually struck coins from all of these metals and often combinations of them together. In addition to local coins, circulating in any given place would be foreign coins made…
Throughout the 18th century, French public finances teetered on the brink. The state then found itself in deep financial ruin within a few years of the beginning of the French Revolution, culminating in a default on the debt in 1796-97. With this, the outlook for the next century would hardly seem promising. The 19th century…
In the 12th century, a senior official in the English treasury wrote a book describing the inner workings of his institution, likely for the benefit of decades of successors. It is also of great help to historians. The Dialogus de Scaccario, or ‘Dialogue of the Exchequer’, is a window into the English treasury in the…
When cities not previously known as banking and financier centers become such, they usually adopt something from the incumbent financial centers of the era. New banking cities mimic the old and often import talent from them. In the 14th century, Bruges became the first banking center in the north of Europe to match the scale…
It is easy to overestimate the role finance had in setting off the Industrial Revolution. To some extent, the early stages of the Industrial Revolution took place in spite of the financial system rather than because of it. Industrial enterprises in the first half of the 19th century had little access to the capital markets…
The general role of banks in free market economies is no mystery. However, listing what a banking contributes to a state-led economy, or even a wholly state-run economy, could require more thought. Thankfully, the early history of the Soviet Union reveals that banks had something to offer even in a system where the state budget…
While lending at interest came under official scrutiny in medieval Europe, annuities did not. Though an annuity is usually thought of today primarily as a tool in retirement planning, in the Middle Ages, annuities were used to raise money for monasteries, property developers, merchants, artisans, landowners, cities, and countries. After receiving official sanction, life and…
How do you verify a debt or payment in a mostly illiterate society? What records can you rely on? Trade and credit in the medieval world required some way of tracking amounts due and paid without the aid of written records. In medieval England, wood sticks were used to represent debts and by a simple…
