Dealing with uncertainty : managing personal investment in the early English national debt

Abstract

During the late seventeenth century there was a ‘Financial Revolution’ in England. Prompted by the exigencies of the Nine Years War (1689–97), the state marked the beginnings of a permanently funded National Debt by introducing a series of measures, the most important of which was the foundation of the Bank of England in 1694. The state's financial innovations were enthusiastically supported by London's business community and also attracted the capital and the trust of investors of more limited means and financial knowledge. Through the surviving papers of Samuel Jeake, a merchant from the East Sussex town of Rye, this article considers the strategies used by those less prominent investors, and examines the methods they used to obtain financial information and the costs they faced. Jeake's experiences reveal much about the factors that led ordinary investors to commit their capital to the newly established public funds but show that, during the formative period of the Financial Revolution, the costs of placing faith in the state's financial promises often outweighed the benefits.