University of Portsmouth's History Blog

Rehabilitating Exchange Alley: why it was possible to trust eighteenth-century stock-brokers

On 26 April 2023 Professor Anne Murphy, Executive Dean of the Humanities and Social Science here at the University of Portsmouth, presented her paper on the nature of trust in financial markets in the eighteenth century. If you missed the paper, the recording is available to watch here. You will need the following password r?Qo7xmt to access the recording. An abstract for Anne’s paper can be found below.

Anne’s latest monograph, Virtuous Bankers: A day in the life of the late eighteenth-century Bank of England, which presents an in-depth study of the eighteenth-century Bank of England at work, is published on 9 May 2023. For more details, please follow this link.

This paper explores the nature of trust in financial markets in the absence of formal institutions. It focuses on London’s late-eighteenth-century stock market. This was an unregulated, dispersed, often disorderly market that was framed by factual and fictional discourses of the moral degeneracy of financiers and the risks, both economic and personal, faced by naïve investors. Yet the primary instruments traded in this market – government debts and the shares of the large monied companies, the Bank of England and the East India Company – were judged to be gilt-edged. They were the cornerstone of the investment portfolios of large-scale corporations and prudent lady’s maids. ‘The funds’ became the repository for the idle balances of businessmen, for dowries, nest-eggs and retirement funds and they were the preferred facilitator of inter-generational transfers, especially for perceived vulnerable recipients, such as orphans and spinsters. I will, therefore, discuss how, in the absence of institutions and constraints, trust was generated in the market that provided the mechanism for purchase of these securities and determined their overall value.

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