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Society and the economy during the early stuarts and English Revolution > growth of London, banking and insurance > Flashcards

growth of London, banking and insurance Flashcards

1
Q

what did London become in the mid-17th century + what was it’s population

A
  • London became the largest city in Western Europe
  • population was approx 400,00
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2
Q

how much did the population of London increase to by 1700

A

increased to 575,00

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3
Q

how was London ideally placed to power the stuart economy

A
  • it was at the heart of the road and shipping network
  • could support the increasing demand for goods
  • became home for the new investment banking industry
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4
Q

what do many historians agree was the result of London’s economy growing

A

due to minor developments that happened to occur at the same time

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5
Q

what did London have to offer

A
  • banking and insurance industries that provided employment
  • centre of legal system
  • transport improved since Tudor times
  • skilled and educated workers moved to London as it offered more than substance work
  • number of markets meant that London was the focal point for economic activity
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6
Q

what was banking essential for

A

essential for the development of
- British economy
- International trade

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7
Q

what was the name of the first commercial building that opened in Britain and who was it opened by

A
  • Royal Exchange in 1571
  • opened by Gresham, rich merchant
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8
Q

what did the Royal exchange provide a space for

A

provided a space for brokers to do deals

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9
Q

how was the growth of lending made possible

A

due to the lowering of interest rates

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10
Q

what was the legal limit for interest rates in the years 1624, 1651 and 1714

A
  • 1624 it was 10%
  • 1651 it was 8%
  • 1714 it was 6%
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11
Q

what was the benefit of the legal limit for interest rate being 6% in 1714

A
  • made credit more attractive
  • banks and brokers were needed to provide the credit
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12
Q

what was the result of the demand for credit increasing

A

brokers established networks of contacts that could provide money

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13
Q

what was the market rate for a good loan in 1640 and 1688

A
  • 1640 it was 8%
  • 1688 it was 6%, below the legal limit
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14
Q

who established the first money-scrivening firm

A

Robert Abbot

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15
Q

why did royalist landowners face disaster in the decade after the civil war

A

due to the commonwealth’s move to confiscate their land and remove their capital

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16
Q

to who did royalist landowners turn to in the decade after the civil war + what did this encourage

A
  • to London, for loans in order to protect their assets and estates
  • encouraged men with wealth to offer their own capital as loans
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17
Q

how much money passed through Abbott’s accounts between 1652-1655

A

approx £1,138,000

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18
Q

who was Abbot’s firm taken over by after his death

A

by his nephew, Robert Clayton

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19
Q

how much did Clayton receive per year in interest from loans alone

A

he received £3,500

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20
Q

what were Clayton and and his business partner, Morris, responsible for

A

responsible for writing the first English cheque in 1659

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21
Q

what profession did the second half of the 17th century see a boom in

A

in the success of gold-smith bankers

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22
Q

what was seen as a safer option when the royal mint was seized by Charles I in 1640

A

storing valuables with goldsmiths

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23
Q

how much goldsmith-bankers did London have in 1670 and 1677

A
  • 32 gold-smith bankers in 1670
  • 44 gold-smith bankers in 1677
24
Q

what were the gold-smiths able to do as they were seen as trustworthy

A

they were able to borrow at 4%-6% so they could offer short-term loans at a rate above 6%

25
Q

what was the system that was used by gold-smiths and money scriveners based on

A
  • it was paper-based
  • goldsmiths would often accept bills and notes from other banks and then attempt to raise the funds to pay off debt
26
Q

how was banking not allowed to flourish

A

commonwealth attempted to regulate finance through The Hale commission which discussed a number of legal reforms

27
Q

what did the commonwealth suggest in order to not allow banking to flourish

A

it suggested the establishment of a register of property transactions, but this wasn’t acted upon

28
Q

what led Charles to reforming banking in 1672

A
  • Charles was heavily indebted to a group of gold-smiths bankers in the 1670s
  • the gold-smiths bankers were borrowing money at 6% and lending it to the crown at 10%
  • reforming banking meant that the loans to the crown were levied from the general public, resulting in Charles paying a lower rate of interest
29
Q

what happened to the goldsmiths after Charles II reformed banking in 1672

A
  • received notification that the funds deposited by them in the royal treasury had been confiscated
  • goldsmiths weren’t refunded
30
Q

what resulted in a boom of private financers

A

the public losing their confidence in the crown to keep investments safe

31
Q

when was the publics trust and confidence regained in the crown to keep their investments safe

A
  • regained by William III
  • he restored the statues of goldsmith bankers by repaying the original loans
32
Q

what was the growth of insurance instrumental in

A
  • fostering the economic conditions required for successful trade
  • expanding empire
33
Q

when was marine insurance established and when did a developed industry appear

A
  • established by the 17th century
  • a developed industry didn’t appear until after 1688
34
Q

how did dutch merchants understand the value of marine insurance

A

often visited London to meet financiers in the late 16th century

35
Q

how did Italian merchants understand the value of marine insurance

A
  • brought the practice of insurance into Britain in 15th century
  • insurers Filippo Borromeo had a branch in London
36
Q

why was a marine insurance law introduced in 1601

A
  • regulate the market
  • create a separate ‘assurance court’ to deal with instance matters
37
Q

why were many British merchants reluctant to part with large amounts of money in order to take out insurance in the first half of the century

A
  • due to the high rates charged fro premiums
  • common for as little as half of the value of goods on a ship to be covered
38
Q

what company decided to accept the risk and avoid insurance completely

A

the East India Company

39
Q

by what year had it become normal for ships from Holland to be insured through English brokers

A

by 1657

40
Q

who did London merchants begin to replicate in terms of insurance

A

London merchants began to replicate the Dutch

41
Q

by how much did marine insurance prices to all destinations drop throughout the 17th century

A

by 75%

42
Q

what city became the leading instance market in the word

A

London

43
Q

what were the usual risks insured for

A

piracy, fire and natural disasters

44
Q

when did Lloyd open his coffee house in London and what did it develop into

A
  • opened his coffeehouse in 1688
  • became the world’s first insurance market, Lloyd’s of London
  • he welcomed merchants and ship owners and would share information about everything
  • coffeehouses proved to be convent meeting places and many others sprung up, such as one in Oxford in 1650
45
Q

before Lloyd, who carried out insurance business

A
  • by bankers and moneylenders
  • they ‘underwrote’ their names for a particular sum against a risk
46
Q

apart from coffeehouses, what was another resource available to insurers

A
  • city mercury
  • principle newspaper of London which published shipping announcements
  • from 1680, advertisements for insurance services appeared in the Mercury
47
Q

where did star-funded fire insurance begin

A

in Germany in 1623

48
Q

where were the first fire insurance companies established in

A

in London

49
Q

examples of fire insurance existing in London

A
  • 1615, Mr Havers was described as an assurer of fire insurance and had an estate worth £40,000
  • a scheme created by Charles I in 1638 to ensure London citizens and business owners against fire
50
Q

why was fire insurance in great demand in London

A
  • fires were common in the tightly packed streets of London
  • Great fire of London in 1666 increased the need for formal insurance policies
51
Q

what did the act passed in 1667 consist of

A
  • rebuilding the city after the fire
  • consisted of a reference to the settling of insurance claims at the Royal exchange
52
Q

what two specialist companies for fire insurance were set up towards the end of the period

A
  • Fire office in 1681
  • Friendly Society in 1683
53
Q

when were companies specialising in policies for private housing established

A

in 1720

54
Q

what was a downside to the fire and marine insurance

A

other categories of insurance that would later become essential for many people were still unheard of in the 17the century

55
Q

what were the overall effects of insurance

A
  • it’s clear that insurance was still in its infancy
    -but it was an essential ingredient in the growth of a prosperous economy
  • development of more formal banking made this possible

Society and the economy during the early stuarts and English Revolution (11 decks)

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