Money and trust. Amsterdam moneylenders and the rise of the modern state, 1478-1794

Money and trust. Amsterdam moneylenders and the rise of the modern state, 1478-1794

By Marjolein ‘t Hart

XIV International Economic History Congress (2006)

Synopsis: The aim of this paper is to establish how trust came about between the investing public and the central (aka provincial) rulers in the Netherlands, and how the settings of the state loans evolved over time. Throughout the late medieval and early modern period, particular loans and their investors are investigated. In correspondence with the models from the studies of urban public debt, the following characteristics are of interest:
1) were investors a small, typical ethnical or occupational elite, specialised in financial services in general (bankers, banking houses, goldsmiths, Lombards/Italian, Jews), or were they dispersed over several communities
2) did they belong to a close circle around the government centre (in our case usually The Hague) or were investors not directly tied to the bureaucracy of the emerging state
3) did loans come predominantly from societal institutions, such as orphanages or church boards or town governments, or were the investors operating individually
4) did the subscribers belong to the richest layers in society only (top-merchants, urban political elites) or were they broadly dispersed over society

Some other characteristics are of importance as well. Could the bonds be transferred to a third party? Were the bonds sold on the free market of were the investors pressurised or forced? A great degree of freedom and easy tradability of the bonds suggests depersonalised relations. Such ‘abstract’ settings point to a high degree of trust in the state. This proved of particular importance in the English financial revolution.

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