2.3.1 The growth of banking and insurance - Banking, Money Scriveners, Marine In. + Fire In. Flashcards
The growth of money-lending in the Stuart period was due to…
the lowering of interest rates.
Why was the growth of banking and insurance necessary?
development of brit economy and international trade (existed befre stuarts)
Businessmen and commerce needed a credit system that was flexible.
Why was the growth of lending made possible?
due to lowering interests.
legal limit 1624 = 10% —> 1651 6%
== more attractive = demand increased in 1688 it was between 4-6% below the legal limit = shows profit and amount of merchant and gentry wanting this shit
Define Money Scriveners
Someone who lends or arranges the lending of money or acting as brokers, lending money on behalf of others.
First Money-Scrivening Firm- ?
Robert Abbot
The first money-scrivening firm was established by Robert Abbott. Show his immense success as someone who arranged the lending of money, charging a fee for his services
between 1652 and 1655 over £1million passed through his accounts.
Wat stimulated the growth of the Money Scrivener’s industry?
Royalist Landowners faced disaster after Civil War, as Commonwealth confiscated land and removed capital. They turned to London for Loans to protect assets and estates for protection. = Encourged men with wealth to offer their own capital as loans and ABBOTT did what he was good at
Firm taken over by Robert Clayton following Abbott’s death. By 1672, Robert Clayton’s wealth. £3,515 per year in interest. Responsible for the first?
Responsible for first cheque, 1659.
Scrivening important as allowed other industries to be funded and furthermore flourish- for example?
Cloth Industry. Lowering credit rates made lending attractive
Goldsmith Banking
Storage of Gold within vaults intended for Goldsmiths forged items- seen as safer in comparison to Royal Mint- seized by Charles I
Lent money they held in storage with interest.
London- estimated 32 Goldsmith Bankers 1670. Rose to 44 1677. Because
trustworthy, Goldsmiths able to borrow between 4 and 6%. Could offer short term loans at rate above 6%.
32 44 trustworthy 4% 6%. 6%.
The second half of the 17th century saw a boom in the success of Goldsmith-bankers. Give figures to show a rise in the number of goldsmith-bankers.
London had an estimated 32 goldsmith-bankers, rising to 44 in 1677.
The trustworthiness and reputation of goldsmith-bankers meant that people were more willing to…
pay higher interest rates in order to invest in them.
In the early 1670s, what was Charles II’s relationship with goldsmith-bankers?
He was heavily indebted to a group of goldsmith-bankers, who were lending to the Crown at 10%.
Charles II was heavily indebted to goldsmith-bankers in the early 1670s. This led to him…
reforming banking in 1672, so that loans to the Crown were could now be levied from the general public (resulting in him paying lower interest). = confidence in the crown to keep investments safe lost = boom for private financers.
How did charles II lead to a boom for private financers?
Charles was heavily indebted to goldsmiths bakners - borrowing 6% and lending to the crown at 10% lollllll
SOo Charles reformed bankning in 1672 so that loans to the crown levied.
== confidence in the crown to keep investments safe lost = boom for private financers.
confidence restored when WII rerstored the status of Goldsmith-bankers by repaying originla loans
Bankers not always able to Flourish?
Commonwealth attempted to regulate finance through Hale Commission 1652- discussed legal reforms. Not acted on.
Marine insurance instrumental for successful trade in…
expanding empire and trading in general
Did the Dutch mrchants understand the value of marine insurance? what did in lead to lonodn merchants to do?
yes in the late 16thC - VISITED LONDON TO MEET Financers.
London merchants began to replicate the Dutch in seeing the calulation of risks -
evidence of the rise marine insurance
17th Century prices fell by 75% = BUSINESS MORE EST = London became the leading insurance market in the world.
Great fire of London (1666)
Following the fire, 1667 the act to rebuild the city referenced settling insurance claims at the Royal Exchange.
Two specialist companies later set up offering fire insurance:
the Fire Office (1681) and the Friendly Society (1683).
Marine insurance prices dropped by up to 75% as the industry became more established, and consequently, London became…
the leading insurance market in the world.
When was the Fire Office set up?
1681
In the 17th century the insurance industry was still… , but was an…
in its infancy
essential ingredient in the growth of the economy.
Overall, whilst this industry had already been established, it was instrumental ………….
in fostering the economic conditions required for a successful trade and an expanding empire
In 1688 ….. ,…. opened his coffee house in London, which would eventually develop to become the world’s first insurance market
Lloyd welcomed merchants and ship owners and would share shit about weather and prices.
