Paper #860

Title:

Private borrowing during the financial revolution: Hoare’s Bank and its customers, 1702-1724

Authors:

Peter Temin and Joachim Voth

Date:

May 2005

Abstract:

The financial revolution improved the British government’s ability to borrow, and thus its ability to wage war. North andWeingast argued that it also permitted private parties to borrow more cheaply and widely.We test these inferences with evidence from a London bank.We confirm that private bank credit was cheap in the early eighteenth century, but we argue that it was not available widely. Importantly, the government reduced the usury rate in 1714, sharply reducing the circle of private clients that could be served profitably.

Keywords:

Financial Revolution, growth, finance, rationing, usury laws, institutional evelopment, eighteenth-century England

JEL codes:

E44, N23, N13, G21, G18, G28

Area of Research:

Economic and Business History

Published in:

Economic History Review, August 2008, 61 (3), pp. 541-564.

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