International Government Finance and the Amsterdam Capital Market, 1740–1815

377 Pages·2009·4.44 MB·English

by  James Riley

INTERNATIONAL
GOVERNMENT FINANCE AND
THE AMSTERDAM CAPITAL MARKET
1740-1815

INTERNATIONAL
GOVERNMENT FINANCE
AND THE
AMSTERDAM
CAPITAL MARKET
1740-1815
JAMES C. RILEY
Indiana University
CAMBRIDGE UNIVERSITY PRESS
Cambridge
London New York New Rochelle
Melbourne Sydney
CAMBRIDGE UNIVERSITY PRESS
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Cambridge University Press
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Published in the United States of America by Cambridge University Press, New York
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© Cambridge University Press 1980
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of the copyright holder.
First published 1980
This digitally printed version 2008
A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication data
Riley, James C
International government finance and
the Amsterdam capital market, 1740-1815.
Bibliography: p.
1. Loans, Dutch - History.
2. Capital - Netherlands - History.
3. International finance - History. I. Title
HJ8707.R54 332.4'5'09492 79-152
ISBN 978-0-521-22677-6 hardback
ISBN 978-0-521-10110-3 paperback
Portions of Chapter 7 were originally published in the following
articles by the author: "Dutch Investment in France, 1781—1787,"
Journal of Economic History, XXXIII, no. 4 (December, 1973),
733, 736-9, 743, 744-51, and 753-5; "Foreign Credit and Fiscal
Stability: Dutch Investment in the United States, 1781-1794,"
Journal of American History, LXV, no. 3 (December, 1978), 656-
7, 659, 660, 662, 663, 664, 665-6, 667-8, 669-71, 677, and 678.
To
JOHN MCCONNELL
and
JULIA CLIFFORD RILEY

CONTENTS
List of tables and charts page ix
Acknowledgments xi
1 Introduction 1
Financing deficits in the eighteenth century 1
Format of exposition 4
The setting of borrowing 7
2 The Amsterdam capital market 28
The bequest of commerce and commercial finance 28
Government finance 35
3 Public credit in the Dutch Republic 68
Decentralization and its consequences 69
Borrowing formats 73
Myth and reality in the public's appraisal of credit
worthiness 76
Public finance and the Dutch economy 80
4 Supply and demand patterns 83
The period of British domination 83
The period of dispersal 94
5 International government finance 101
Resources 101
Fiscal alternatives 109
National debts 114
6 The debtor states: I 119
Great Britain 119
Austria 126
vn
Contents
Denmark 136
Sweden 144
7 The debtor states: II 153
Russia 153
Poland 159
Spain 165
France 174
The United States 185
8 The collapse of solvency 195
Contraction in Amsterdam 195
Pandemic of bankruptcy on the continent 201
9 Economic consequences of lending to foreign
governments 217
Financial flows and economic flows 219
Capital abundance and a modern sector of industry in
the Republic 224
Erosion of the Dutch capital stock 240
Abbreviations 250
Notes 252
List of sources and works cited 336
Index 353
vm
TABLES AND CHARTS
Tables
3-1 Estimates of outstanding debts, debt service, and tax
revenues in the province of Holland, 1652-1794 77
4-1 Distribution of the estimated balance of foreign gov-
ernment loans 84
5-1 Approximate debt-revenue ratios, 1689-1811 116
6-1 Borrowing as a percentage of expenditures in war-
time 120
6-2 Danish state debt 138
6-3 Danish foreign debt, 1781-8 138
6-4 Danish loans in the Dutch Republic from 1774 139
6-5 Swedish foreign debt as a percentage of the total
debt, 1777-1809 148
7-1 Assignats in circulation and market rates, 1769-
1815 156
7-2 Polish loans in Amsterdam, 1786-92 161
7-3 Gross and net proceeds of Dutch loans to the United
States 186
7-4 Foreign loans and central government revenues and
expenditures of the United States, 1789-94 188
9-1 Estimated totals of long-term foreign loans outstand-
ing compared to balances attainable through 100%
reinvestment of annuity earnings 221
9-2 Average readable returns on selected domestic gov-
ernment annuities, 1796-1814 236
9-3 Inflationary trends and the 1790 capital stock 245
IX