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Charity Endowments as Sources of Local Credit in Seventeenth and Eighteenth-Century England

Published online by Cambridge University Press:  03 February 2011

Francis Godwin James
Francis Godwin James
Affiliation:
Tulane University
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Extract

The significant place of credit in everyday business is not a new phenomenon. If the last few centuries have witnessed a rapid development in the character and extent of credit facilities, it is still far from certain that the relative importance of credit is today greater than it was in the medieval period, or during the intervening centuries. In any case it is undeniable that the business affairs of men, from paupers to princes, have frequently required credit in one form or another. The king with his wars and splendid court, the noble with his extravagant ways, and the merchant with his speculative ventures have been the colorful debtors of history and fiction alike. The Jew, the Lombard, the Medici or Fugger, the goldsmith, and finally the modern professional banker have appeared as the masters of credit. But credit transactions have not been limited to these groups alone. As R. H. Tawney has pointed out, such a society as that of Elizabethan England was composed largely of small property holders, chiefly farmers and artisans. These yeomen, artisans, and small businessmen were often in need of loans to expand or retrieve their estates. Where did they find the credit they required?

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The Journal of Economic History , Volume 8 , Issue 2 , November 1948 , pp. 153 - 170
Copyright
Copyright © The Economic History Association 1948

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References

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16 Seventeenth-century writers argued strenuously over the question of how the national wealth was affected by the legal interest rate. In time they generally came to perceive that interest rates were chiefly governed by other factors. For a summary of these arguments, see Cassel, Gustav, The Nature and Necessity of Interest (London and New York: The Macmillan Co., 1903), pp. 6–16Google Scholar; and SirCunningham, W., The Growth of English Industry and Commerce in Modern Times (6th ed.; Cambridge: The University Press, 1925), Part I, pp. 384 ff.Google Scholar

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23 A Report from the Committee to whom the petition of the proprietors of the charitable corporations for the relief of the industrious poor, by assisting them with small sums upon pledges, at legal interest, assembled in general court, was referred (London, 1733), pp. 4–7.

24 Ibid., pp. 34–35, and Appendix IV, pp. 92–93.

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31 In 1547 SirWhite, Thomas founded an endowment which eventually established loan charities in Coventry, Leicester, Northampton, Nottingham, and Warwick.—Cox, J. Charles, ed., The Records of the Borough of Northampton (London: E. Stock, 1898), II, 345–48Google Scholar. For another loan charity in Leicester, see Stocks, Helen, ed., The Records of the Borough of Leicester (1603–88) (Cambridge: The University Press, 1923), 325–26Google Scholar. References for the other places cited are: Cambridge, Lynn, and Wisbech, Hampson, Ethel M., The Treatment of Poverty in Cambridgeshire, 1374–1834 (Cambridge: The University Press, 1934), pp. 29, 37Google Scholar; Chesterfield, , Charity Commissioners Reports, XVIII (1828), 183Google Scholar. Gloucester, Willcox, William B., Gloucestershire, A Study in Local Government, 1590–1640 (New Haven: Yale University Press, 1940), p. 259Google Scholar; Lynn and Newcastle, Lipson, Economic History of England, III, 247; Manchester, Gastrell, Notitia Cestriensis, II, 76; Norwich, Hudson, William and Tingey, J. C., The Records of the City of Norwich (Norwich: Jarrold & Sons, Ltd., 1910), IIGoogle Scholar, cix; Plymouth, Cunningham, Growth of English Industry and Commerce, p. 145, n. 1.

32 Leonard, Early History, pp. 232–33.

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35 Fry, Herbert, Royal Guide to the Principal London and Other Charities (London: Churchman Publishing Co., Ltd., 1939), pp. 6, 92, 246, 280Google Scholar.

36 Cox, ed., Records of the Borough of Northampton, II, 349, 378.

37 Charity Commissioners Reports, XXVI (1833), 785.

38 W. Hudson and J. Tingey, Records of the City of Norwich, II, cix.

39 Gastrell, Notitia Cestriensis, Vols. I and II. The figure 163 includes parochial chapels. Many nonparochial chapelries also had endowments.

40 Addy, Sidney O., Church and Manor (London: G. Allen & Co., 1913), pp. 316–21Google Scholar; Ashley, English Economic History and Theory, II, 310–11. Addy thinks the custom was of sufficient significance to assert that the parish thus became a kind of credit bank; and Tawney remarks upon the importance of the practice.—Wilson, Discourse Upon Usury, Introduction, p. 126. In two Cheshire villages cows were still let out on hire in the eighteenth century.— Gastrell, Notitia Cestriensis, I, 174, 182–83.

41 On the poor stock see Trotter, Eleanor, Seventeenth Century Life in a Country Parish (Cambridge: The University Press, 1919), pp. 60–61Google Scholar; S., and Webb, B., English Poor Law History, Part I, The Old Poor Law (London and New York: Longmans, Green & Co., 1927), pp. 9–11Google Scholar; Leonard, Early History, p. 118. An Elizabethan statute (43 Eliz. c, 4) is entitled, “An act to redress the misemployment of lands, goods and stocks of money heretofore given to charitable uses.” In Cheshire at the opening of the eighteenth century, Gastrell reports many cases where school and church incomes were derived in all or in part from money out on interest, some of which are referred to as stock.—Notitia Cestriensis, I, 132, 137–38, 171, 229, 232, 245, 269–70, 275, 293, 309, 321, 343, 356, 359 (for schools); ibid., 257, 258, 288, 294, 297, 342, 355 (for chapels or parish churches).

42 Ashley, English Economic History and Theory, Part II, pp. 342–43; Steinbicker, Carl R., Poor Relief in the Sixteenth Century (Washington: Catholic University of America Press, 1937), pp. 138–41.Google Scholar

43 In different communities different local officials handled the parish stock. For example, in Manchester both the manorial officials and the churchwarden attempted to control £575 out on interest—Redford, Arthur and Russell, Ina Stafford, The History of Local Government in Manchester (London and New York: Longmans, Green & Co., 1939), I, 172Google Scholar. In Oxford the mayor and council administered such a fund.— Hobson, Mary G., Oxford Council Acts, 1665–1701 (Oxford: Clarendon Press, 1939), p. 184Google Scholar. In one Cheshire parish the vicar seems to have held the bonds.—Gastrell, Notitia Cestriensis, I, 144.

44 Richards, Early History of Banking p. 15, n. 1. Sometimes there were countersigners of the notes.—Mellows, W. T., ed., Peterborough hoed Administration, Feofees Accounts, 1614–14 (Kettering: Northamptonshire Printing and Publishing Co., 1937), p. 3Google Scholar. Charity Commissioners Reports, XXI (1829), 159Google Scholar. Loans were usually made for a definite period but in one Wiltshire parish a loan for £67 was made payable on demand.—Ibid., XXVI (1833), 484.

45 For examples of the use of real property as security see Gastrell, Notitia Cestriensis, I, 229, 282; II, 14, 406, 488, 501–2, 534, 546. Also see An Official Account of the Parochial and Public Trust Funds Belonging to Each Parish in the Blyihing Union (Halesworth, 1838), pp. 61, 102.Google Scholar

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47 Smith, Toulmin, The Parish, Its Powers and Obligations at Law (2d ed.; London: H. Sweet, 1857)Google Scholar, Appendix B, pp. 626–44. See also pp. 432–33. Smith believed that the lending of charity funds was largely confined to small borrowers but his conclusion appears to have been based upon very limited evidence.

48 Nicolson, William, Miscellany Accounts of the Diocese of Carlile (1705), Ferguson, R. S., ed. (London and Carlisle, 1877), p. 172Google Scholar. For two other exapmles of small loans, see Gastrell, Notitia Cestriensis, I, 279; II, 225.

49 Ibid., II, 505, 534; Nicolson, Miscellany, p. 214; Charity Commissioners Reports, XXI (1829), 126; XXVI (1833), 515–16.

50 Ibid., XXI (1829), 97.

51 Gastrell, Notitia Cestriensis, I, 279; II, 225.

52 Hobson, Oxford Council Acts, p. 210.

53 Gastrell, Notitia Cestriensis, I, 138, 275. Two hundred pounds was held on bond by a Devonshire knight in 1791. — Reports of Commissioners to enquire concerning charities …. relating to the County of Devonshire (London, n. d.) I, 52–53.

54 Charity Commissioners Reports, XXI (1829), 318. It is not clear whether or not this sum equals the original loans or bonds for twice the sums.

55 Ibid., IX (1823), 639.

56 Ibid., XIX (1828), 263.

57 Ibid., IX (1823), 688.

58 Gastrell, Notitia Cestriensis, II, 157.

59 Charity Commissioners Reports, XIX (1828), 243–44.

60 Mellows, Peterborough Local Administration, pp. 7, 59.

61 Stocks, Records of the Borough of Leicester, pp. 385, 441, 495, 551.

62 The Liverpool corporation held £610 and the parish £542 of charity money.—Charity Commissioners Report, Analytical Digest, 1843, Part I, pp. 540–41. The corporation of Southwold held £569 of such money on bond.—Official Account of the Parochial and Public Trust Funds …. in the Blything Union, p. 81.

63 The parish of Warmington, Cheshire, paid interest to the school fund for £60 borrowed to build a church steeple.—Gastrcll, Notitia Cestriensis, I, 263. Wibonbury, Cheshire, borrowed £312 from a local endowment, the whole parish being “security for the interest.”—Ibid., p. 229. Mansfield-Woodhouse in Nottingham borrowed £100 to build a workhouse.—Charity Commissioners Reports, XXV (1833), 441Google Scholar.

64 Ibid., IX (1823), 632; Gastrell, Notitia Cestriensis, I, 315.

65 Charity Commissioners Reports, XXV (1833), 488.

66 Ibid., XXI (1829), 25; Reports of Commissioners…. relating to Devonshire, I, 46.

67 For example, see Gastrell, Notitia Cestriensis, I, 155; II, 41–42, 176, 406.

68 Gray, History of English Philanthropy, p. 226.

69 Hobson, Oxford Council Acts, pp. 219–20.

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71 Charity Commissioners Reports, XXI (1829), 97.Google Scholar

72 Ibid., p. 241.

73 See below, p. 167.

74 Charity Commissioners Reports, Analytical Digess, 1843, Part I, 133, 137, 543, 545, 555, 557, 567. These examples are from Cheshire and Lancashire reports, but there are numerous cases from other counties in the same volume.

75 These figures are compiled by adding all of the sums (as classified above) which are reported in the two volumes of Notitia Cestriensis. The figures are given to the nearest pound but it is obvious that the reports cannot be perfectly accurate. Therefore the totals given here should be considered only as reasonably close estimates.

76 For instance, at Tilston, Cheshire, £182 are described as “put out, interest distributed every year,” wording typical of the reports. But in this case the report adds that the bonds are in the parish chest.—Gastrell, Notitia Cestriensis, I, 199. In most instances all that is told is that the money is out on interest.

77 This is especially likely where the reports are vague. For example, that for Macclesfield, Cheshire, simply notes that there is an annual income of £45/19/04 from all sources for the use of the poor.—Ibid., p. 292.

78 There is one case where evidence from a different source indicates that this was probably true. Gastrell's report for Manchester lists, £1,448 in charity funds, almost all of which are unspecified (ibid., II, 77), yet in 1655 £575 of the Manchester money was “out upon interest in several hands.”—Redford and Russell, History of Local Government in Manchester, I, 172. We also know that money destined to be invested in real estate brought interest from whomever held it in the meantime.—Gastrell, Notitia Cestriensis, II, 157.

79 Charity Commissioners Reports, Analytical Digest, 1843, Part I. The Cheshire statistics are found on pages 110–41, those for Lancashire on pages 516–73. The totals given arc derived by adding all the sums listed as on personal security. For an explanation of terms, see ibid., Introduction, p. v.

80 Sir Robert Giffen estimated the national wealth at £370,000,000 in 1720 and £500,000,000 in 1800. Porter, G. R., The Progress of the Nation (London: Methuen & Co., Ltd., 1912), new ed. revised by F. W. Hirst, 1912, p. 696Google Scholar.

81 Charity Commissioners Reports, Analytical Digest, 1843, Part II, pp. 826–28. The total capital invested in all other securities amounted to £5,656,746, or £6,668,528 including loans, mortgages, and turnpikes. The interest from these investments was £255,151 Per annum. Rents and rent charges yielded £954,244 so that the total capital invested in real estate must have been nearly £20,000,000.

82 Marshall, English Poor in the Eighteenth Century, p. 77.

83 Clapham, The Bank of England, I, 300–2. The figure £300,000 seems a fair estimate since the discount rate was 4 to 6 per cent.—Ibid., p. 299. Clapham does not give the interest rates on personal loans but the Bank charged the East India Co. from 4 to 6 per cent. During the period 1700 to 1750 that company was normally in debt to the Bank for from £50,000 to £ 150,000.—Ibid., p. 119.

84 Eden, The State of the Poor, III, Appendix III, cvi.

85 Gilboy, Elizabeth W., Wages in Eighteenth Century England (Cambridge, Mass.: Harvard University Press, 1934), p. 220Google Scholar.

86 Clark, G. N., The Later Stuarts, 1660–1714 (Oxford: Clarendon Press, 1934), p. 25.Google Scholar