|
This page is part of a website based
on the life and achievements of eighteenth-century inventor Henry Cort. Please email site controller Eric
Alexander with any comments or queries. |
18th
century finance
For people like Henry Cort, in the upper strata of society, cash
transactions were unusual.
|
The heart of commercial operations was the Bill of Exchange (a written
request or order to pay a certain sum of money without conditions) and the
Promissory Note (a promise to pay), both of which rested on assumptions of
others' creditworthiness. From
Davidoff & Hall, Family fortunes: Men and women of the English Middle
Class, 1780-1850 (Routledge 1994). |
How much is it
worth?
|
Georgiana's father was only eleven when his own
father died of alcoholism, leaving behind an estate worth £750,00 – roughly
equivalent to £45 million today. It
was one of the largest fortunes in England and included 100,000 acres in
twenty-seven different counties, five substantial residences, and a sumptuous
collection of plate, jewels and old master paintings. Lord Spencer had an income of £700 a week
in an era when a gentleman could live off £300 a year. From Amanda Foreman, Georgiana
Duchess of Devonshire. A footnote adds: “The
usual method for estimating equivalent twentieth-century values is to
multiply by sixty.” |
This in a period when a top
skilled craftsman might earn £4 per week, while a textile worker outside London
earns 7s.6d. A common soldier's
earnings are £14 per year, as against £600 for the richest merchants (some 1000
families, according to one source). A
supper of bread, cheese & beer costs three (old) pence, a dentist charges
2s.6d to extract a tooth, a bottle of champagne sells for eight shillings. Expenses of installing new plant at
Cyfarthfa around 1789: £50,000.
Alexander Trotter's starting
salary as a Navy clerk is £50 per annum.
As Paymaster he receives £500, later raised to £800. At the same time the salary of the Treasurer
of the Navy is raised, from £2,000 to £4,000 per annum, "to discourage
peculation".
|
Joseph Priestley when he came to the New Meeting in 1780
was offered a stipend of £100. This
could not conceivably have covered the expenses of his comfortable
middle-class establishment with costs augmented by his scientific work. Priestley was able to rely on his richer friends and relatives to support him. From L Davidoff & C
Hall, Family fortunes: Men and women of the English Middle Class,
1780-1850 (Routledge, 1994). |
As from 1733, a candidate for the Bench needed to
have an income from land of over £100 a year.. a squire needed to have £500 a
year, at the very least. From Virgin, The Church in an Age of Negligence:
Ecclesiastical Structure and Problems of Church Reform, 1700-1840
(Cambridge 1989). |
Debt
|
For as small a debt as £2 on the oath of a single creditor a small
master or shopkeeper could be removed from his business and his family. From Rule, Albion's People: English
Society 1714-1815 (London 1992). |
A system of payment dependent on bills of exchange and
promissory notes places great emphasis on trust. If the trust breaks down and a creditor demands realisation of
money owed, his debtor is in difficulties.
Simon Winchester’s The Map That Changed The World tells how
geological mapmaker William Smith goes to a debtor’s prison following a suit
for payment of debts of over £300 by one Charles Conolly.
Some people suffer by association with debt run up by someone
else. Thus East India Company director Richard Becher has to resign his directorship, sell an
estate in England and return to India because of involvement a newphew’s
business failure.
Cort’s problem is effectively that he
is called upon by Adam Jellicoe’s most powerful creditor, The Crown, to pay to
them the debt he originally owed to Adam.
Bankruptcy
Bankruptcy is not necessarily a debilitating experience, as both
Henry Cort and Charles
Gascoigne discover. In Gascoigne’s
case, his creditors continue to employ him.
Cort is helped by his friends’ generosity, as are others…
|
John Perry, an Ipswich draper, was
twice declared bankrupt in the hard times of the 1820s and 1830s. He was supported by the powerful and
wealthy members of his local Quaker congregation. From John Rule, Albion's
People: English Society 1714-1815. |
Poor Davies, the bankrupt
Bookseller, is soliciting his Friends to collect a small sum for the
repurchase of part of his household stuff.
Several of them give him five guineas. It would be an honour to him, to owe part of his relief to Mrs.
Montague. From letter of Samuel Johnson to Elizabeth Montagu, 5 March 1778. |
I have myself subscribed £500 and
have the satisfaction to find several persons who have offer'd upon this occasion
their £50 and £100. From letter of Thomas Pitt to
Elizabeth Montagu concerning popular society figure Richard Berenger, March
1778. |
Such
generosity helps Cort to escape from bankruptcy after
a few months.
|
When sufficient creditors, (the
proportion varied from 3/4 to 4/5, by number and value), were satisfied and
had signed a request for a Certificate of Conformity (a statement that the
bankrupt had satisfied all the legal requirements), the Commissioners could
issue the certificate which effectively discharged him, although dividends
might continue to be paid after that date.
From PRO information leaflet L005, Bankrupts
and Insolvent Debtors: 1710-1869. |
Cort’s certificate of conformity is registered on 14 April 1790.
Gambling debts
A few weeks after the demise
of Cort and Jellicoe (is it just coincidence?) Samuel
Homfray visits a gaming house in Cardiff and loses over £300 at
"Lazarus". Small beer.
|
Mr. Homfray if you take my advice don't give any note for you
have been most egregiously cheated.
The cards were marked. Words attributed to John Richards, "a
young gentleman of unimpeachable character", at a gaming session in
Cardiff on Saturday 6th October, 1789. |
According to Cowie (Hanoverian
England 1714-1837), Lord Stavordale lost £12,000 in a single throw of dice
in 1770, while Charles James Fox (at the age of
sixteen) and his elder brother lost £32,000 at cards over three days and
nights. At one point the Duchess of
Devonshire is reckoned to have run up debts of £60,000 by borrowing, gambling
and general extravagance: she is offered a generous loan by Thomas Coutts. As for the Prince of Wales...
|
The debts must have had a beginning, but they had no end. So far back as August 1784, the Prince
admitted to a sum of £269,000, but the King was angered at the disclosure and
the debts were allowed to accumulate.
In 1787, after Fox had categorically denied that the Prince was
privately married to Mrs Fitzherbert, Parliament voted £161,000 towards the
payment of back debts, and £25,000 to the completion of Carlton House; but in
April, 1795, when the Prince had consented to what was in reality a bigamous
union with the Princess Caroline of Brunswick, Pitt stated in Parliament that
the Prince owed a sum of £630,000. From E.H. Coleridge, The Life of Thomas
Coutts, Banker (London 1920). |
Do these figures put Cort's
alleged debt of £27,500 into perspective?
On the fiddle
Your bank will use money you deposit to enrich itself
(hopefully) by lending it for a profitable venture. For some types of current account, you will gain nothing from the
bank’s investment.
Bankers’ ethics are applied by some enterprising individuals in
the eighteenth century to make profits for themselves by judicious application
of other people’s money. One such is Alexander Trotter, Paymaster to the Navy under
Treasurer Henry Dundas.
|
He admitted that he had made the bulk of his fortune by
transferring public money from the Bank of England to his own credit at Coutts',
making such payments to annuitants and others as became due, and investing
the unclaimed balances into the Exchequer and Navy Bills and other Government
Securities, and, generally, by lending it at interest. |
I made no secret of my financial transactions, which were known
to ministers of state, and everybody whom it might concern, and when I was
assailed in the press and denounced by the Managers of the Impeachment I
received from such men as Sir George Rose, Sir Samuel Shepherd, and last but
not least my relative, Thomas Coutts, the assurance of their unabated
confidence and esteem. |
|
From E.H.
Coleridge, The Life of Thomas Coutts, Banker. |
|
What Trotter avoids is a situation in which the money he has temporarily
appropriated is needed for the purpose it was originally intended. This is the fate that befalls Adam Jellicoe with the money he has invested in Cort’s
business. Thomas
Homfray, after returning from Merthyr to the West Midlands, likewise makes
an unsound investment as treasurer of a canal company, leading it into
financial difficulty. A similar
situation develops with Queen Anne’s Bounty from
the activities of its treasurer John Paterson.
|
RELATED TOPICS John Becher and
the American War Thomas Morgan and
the American War Shelburne, Parry
and associates The Arethusa,
Sandwich and Keppel |
henrycort.net
hm