Sir George Caswall vs. the Duke of Portland: Financial contracts and litigation in the wake of the South Sea Bubble

doi:10.1017/CBO9780511757419.006

5 - Sir George Caswall vs. the Duke of Portland: Financial contracts and litigation in the wake of the South Sea Bubble

Published online by Cambridge University Press: 04 August 2010

Gary S. Shea

Edited by

Jeremy Atack and

Larry Neal

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Jeremy Atack: Affiliation:
Vanderbilt University, Tennessee
Larry Neal: Affiliation:
University of Illinois, Urbana-Champaign

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Summary

In one of the more influential papers in economic history of the past twenty years, North and Weingast (1989) described the connections between a singular event, the English Glorious Revolution of 1688, and the subsequent evolution of political institutions and capital markets in the UK. Although it is usually difficult to argue that a particular series of events represents a true watershed in history, the arguments presented in their paper are quite persuasive in regards to public finance. In terms of both scale and unit cost of public finance, there is little similarity between the reigns of the Stuart and of the early Hanoverian monarchs. From about 1688, events were put in motion that would transform the relation between government and finance. North and Weingast persuasively argued that these events were: (1) royal political revolution, followed by (2) the complete seizure of taxation powers by parliament and by (3) an extension of parliamentary oversight of expenditure – all of which were made necessary by the financial exigencies of prolonged large-scale European warfare. These processes were coupled with the rise of a market for tradable government debt, which was in turn accompanied by the development of a smaller market for joint-stock company equity securities. All of these developments are part of the collection of events that is now called the Financial Revolution in England.

Type: Chapter
Information: The Origins and Development of Financial Markets and Institutions
From the Seventeenth Century to the Present
, pp. 121 - 160

DOI: https://doi.org/10.1017/CBO9780511757419.006 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2009

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