Abstract
The literature on the financial revolution and the rise of the English fiscal-military state frequently gives the impression that a singular set of reforms emanating from the Glorious Revolution of 1688 changed the entire landscape of English army finances, allowing a fundamental shift from patchwork solutions based on short-term credit and managed through a system of wholesale venality to a solid system of long-term funded loans raised on an impersonal market. This article focuses on the crucial role that merchant networks and the personal connections of financial intermediaries continued to play in international troop payments arranged by the English state through the Dutch Republic. Even when the English or Dutch treasuries could find the necessary money to pay and provision the troops in time, getting the money to the military commanders in the field or to their distant suppliers often depended on long and complex credit lines. Short-term loans acquired in making military expenditure – consisting of unpaid bills to suppliers, payments advanced by officials and officers, and temporary loans contracted by financial intermediaries – as well as the widespread reliance on commercial credit in the form of bills of exchange as a way to transfer funds effectively formed the life thread of army finance. The ability to finance the military in times of exploding costs and permanent emergencies without defaulting rested not only on the capacity to draw on financial resources at home, but also on the strength of commercial and financial networks abroad. In doing so, closeness to the centres of emerging international financial capitalism seems to have been of greater importance than a specific set of institutional innovations.
Highlights
The literature on the financial revolution and the rise of the English fiscal-military state frequently gives the impression that a singular set of reforms emanating from the Glorious Revolution of changed the entire landscape of English army finances, allowing a fundamental shift from patchwork solutions based on short-term credit and managed through a system of wholesale venality to a solid system of long-term funded loans raised on an impersonal market
These soldiers had to be paid and provisioned over long distances. The great strains this posed on state finances, and the potentially dangerous consequences for the economies that carried the burden, did not escape contemporaries. In his An Essay upon Ways and Means of Supplying the War, which went through several reprints in the following years, the mercantilist thinker and staunch Tory Charles Davenant wrote: For War is quite changed from what it was in the time of our Forefathers; when in a hasty Expedition, and a pitch’d Field, the Matter was decided by Courage, but the whole Art of War is in a manner reduced to Money; and now-a-days, that Prince, who can best find Money to feed, cloath and pay his Army, not he that has the most Valiant Troops, is surest of Success and Conquest
Many later authors have either questioned or nuanced the direct and positive links drawn by North and Weingast between political regimes and interest rates, between interest rates on public loans and private loans, and between the Glorious Revolution, economic growth, and the Industrial Revolution (Clark ; Quinn ; Sussman and Yafeh ; Temin and Voth ; Coffman, Leonard and Neal )
Summary
The literature on the financial revolution and the rise of the English fiscal-military state frequently gives the impression that a singular set of reforms emanating from the Glorious Revolution of changed the entire landscape of English army finances, allowing a fundamental shift from patchwork solutions based on short-term credit and managed through a system of wholesale venality to a solid system of long-term funded loans raised on an impersonal market. By examining the operations of James Brydges, the English Paymaster-General during the later phases of the War of the Spanish Succession, as well as the networks of merchants, bankers, and a specialised group of financial intermediaries in troop payments called solliciteurs-militair (military solicitors) that he drew on in the Dutch Republic, this article will provide details on the practical side of managing the massive funds required for paying the army. What especially the issue of South Sea Company stock in did was to put a break on the downward slide of the rate at which this short-term paper was accepted and to provide financiers of the state with a new range of options for raising money quickly This can be seen from the accounts of Paymaster-General James Brydges, preserved as part of the Stowe. The final column in Table gives troop remittances to the
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