2.3.1 The growth of banking and insurance - Banking, Money Scriveners, Marine In. + Fire In.

Question 1

The growth of money-lending in the Stuart period was due to…

Answer 1

the lowering of interest rates.

Question 2

Why was the growth of banking and insurance necessary?

Answer 2

development of brit economy and international trade (existed befre stuarts)

Businessmen and commerce needed a credit system that was flexible.

Question 3

Why was the growth of lending made possible?

Answer 3

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

Question 4

Define Money Scriveners

Answer 4

Someone who lends or arranges the lending of money or acting as brokers, lending money on behalf of others.

Question 5

First Money-Scrivening Firm- ?

Answer 5

Robert Abbot

Question 6

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

Answer 6

between 1652 and 1655 over £1million passed through his accounts.

Question 7

Wat stimulated the growth of the Money Scrivener’s industry?

Answer 7

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

Question 8

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?

Answer 8

Responsible for first cheque, 1659.

Question 9

Scrivening important as allowed other industries to be funded and furthermore flourish- for example?

Answer 9

Cloth Industry. Lowering credit rates made lending attractive

Question 10

Goldsmith Banking

Answer 10

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.

Question 11

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%.

Answer 11

32 
44 
trustworthy
4% 
6%.
6%.

Question 12

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.

Answer 12

London had an estimated 32 goldsmith-bankers, rising to 44 in 1677.

Question 13

The trustworthiness and reputation of goldsmith-bankers meant that people were more willing to…

Answer 13

pay higher interest rates in order to invest in them.

Question 14

In the early 1670s, what was Charles II’s relationship with goldsmith-bankers?

Answer 14

He was heavily indebted to a group of goldsmith-bankers, who were lending to the Crown at 10%.

Question 15

Charles II was heavily indebted to goldsmith-bankers in the early 1670s. This led to him…

Answer 15

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.

Question 16

How did charles II lead to a boom for private financers?

Answer 16

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

Question 17

Bankers not always able to Flourish?

Answer 17

Commonwealth attempted to regulate finance through Hale Commission 1652- discussed legal reforms. Not acted on.

Question 18

Marine insurance instrumental for successful trade in…

Answer 18

expanding empire and trading in general

Question 19

Did the Dutch mrchants understand the value of marine insurance? what did in lead to lonodn merchants to do?

Answer 19

yes in the late 16thC - VISITED LONDON TO MEET Financers.

London merchants began to replicate the Dutch in seeing the calulation of risks -

Question 20

evidence of the rise marine insurance

Answer 20

17th Century prices fell by 75% = BUSINESS MORE EST = London became the leading insurance market in the world.

Question 21

Great fire of London (1666)

Answer 21

Following the fire, 1667 the act to rebuild the city referenced settling insurance claims at the Royal Exchange.

Question 22

Two specialist companies later set up offering fire insurance:

Answer 22

the Fire Office (1681) and the Friendly Society (1683).

Question 23

Marine insurance prices dropped by up to 75% as the industry became more established, and consequently, London became…

Answer 23

the leading insurance market in the world.

Question 24

When was the Fire Office set up?

Answer 24

1681

Question 25

In the 17th century the insurance industry was still… , but was an…

Answer 25

in its infancy

essential ingredient in the growth of the economy.

Question 26

Overall, whilst this industry had already been established, it was instrumental ………….

Answer 26

in fostering the economic conditions required for a successful trade and an expanding empire

Question 27

In 1688 ….. ,…. opened his coffee house in London, which would eventually develop to become the world’s first insurance market

Answer 27

Lloyd welcomed merchants and ship owners and would share shit about weather and prices.