Abstract
An examination on whether the crisis was brought about by excessive speculation or whether poorly thought-out new legislation in the 1760s destabilised the economy by encouraging excessive risk-taking among market participants, especially the notorious Ayr Bank in Scotland. It is unlikely that the psychological reasons given in the traditional account (such as greed or panic) can be proven through surviving sources, but there might be some value in analysing the record under the prism of the theory of opportunism and self-restraint proposed by Mitchell Abolafia. Regulation was if anything overlax and ineffective and allowed the growth of opportunism, especially in the battles for control of the East India Company. This in turn brought about an increase of event risk through Parliamentary intervention. Though the Ayr Bank project was nowhere near as frivolous or venal as the traditional account would have it, its funding practices did encourage the creation of vectors of financial contagion.
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Notes
- 1.
In other words, Minsky’s ‘Ponzi’ finance units.
- 2.
Neal, Rise of Financial Capitalism; Mirowski, ‘Rise and retreat of a market’; Hancock, ‘Domestic bubbling’; Carlos and Neal, ‘The micro-foundations of the early London capital market’; Murphy, Origins of English Financial Markets.
- 3.
Goodspeed, Legislating Instability, pp. 80–1.
- 4.
Stratmann, Myths of Speculation, p. 10.
- 5.
Shiller, Irrational Exuberance, p. 135.
- 6.
McKenzie, The Mirror and The Lounger. These are entirely unconnected with Home’s business or legal interests.
- 7.
Goldgar, Tulipmania, 134–42, debunks the famous myth of the lower orders being carried away by a trading rage during the Tulipmania.
- 8.
Neal, Course of the Exchange, London, 1698–1823 and Amsterdamsche Beurs, Amsterdam, 1723–1794, dataset ICPSR01008-v1.
- 9.
Abolafia, Making Markets, pp. 82–3 (all quotations).
- 10.
Abolafia, Making Markets, p. 19, quoting economist Oliver Williamson.
- 11.
Abolafia, Making Markets, pp. 35–7.
- 12.
Abolafia, Making Markets, pp. 10–11. Both lists contain a mix of direct quotes and interpretative remarks by the present author and have been reordered in their sequence.
- 13.
Despite the emphasis on Abolafia’s analysis here, there have been others who have approached markets in a similar manner. One well-known approach that applies to the Early Modern period (but somewhat earlier than the period under observation here) is that by Carruthers, City of Capital, pp. 162–94. Carruthers has demonstrated what he terms the ‘endogamy’ of market participants, or the correlation of trading patterns with family and (especially) political relationships, and has made an especially convincing case for the influence of political allegiances on the trading of the big public joint-stock shares in the early eighteenth century.
- 14.
Abolafia, Making Markets, p. 11.
- 15.
10 Geo. II, c. 8. The Act was initially passed in 1734 for a limited period and was made permanent in 1737.
- 16.
Banner, Anglo-American Securities Regulation, pp. 100–7. Also noted in Preda, ‘In the enchanted grove’, pp. 291–2.
- 17.
General Evening Post, 18–20 August 1772. The size and leverage of the position is not divulged, but the paper estimated a loss arising from ‘the difference of stock to have been delivered the 16th of July’ of £150,000. Press estimates of securities losses were more often than not exaggerated, but it is notable that the report carries so much specific detail on the nature of the contracts. A 1775 letter by Fordyce’s partner, William James, referenced later on in Chap. 4, mentioned that NJFD had short positions of £800,000 in India stock, presumably through time contracts. Considering that a mere 5% temporary rise in the price of the stock was enough to break Fordyce’s short positions (see Fig. 3.4 below) and this reported size of the positions, it is fairly safe to say that he was running a highly leveraged strategy.
- 18.
See Chap. 4, footnotes 50 and 157 for contemporary references of this apocryphal story.
- 19.
Bowen, ‘Lord Clive and speculation in EIC stock’, p. 908; ‘Little Parliament’, p. 867; Sutherland, East India Company, p. 103 and ‘Lord Shelburne and EIC politics’, pp. 453–6. It should be stressed that a modern repo agreement is executed at a contractually predetermined price and not at the current market.
- 20.
Banner, Anglo-American Securities Regulation, p. 116.
- 21.
7 Geo. III, c. 48.
- 22.
Sutherland, ‘Lord Shelburne and EIC politics’, p. 456 (both quotes).
- 23.
7 Geo. III, c. 49.
- 24.
Neither bill made it out of the Commons (Banner, as above).
- 25.
General Evening Post, 19–22 September 1772; ‘An Injured Creditor’, Public Ledger, 19 September 1772.
- 26.
Morning Chronicle, 19 September 1772.
- 27.
Morning Chronicle, 28 September 1772. As similar point had been made in the same publication on 22 June 1772.
- 28.
Old Bailey Proceedings Online, December 1770, trial of John Clark, John Joseph Defoe, otherwise Brown, otherwise Smith (t17701205-40).
- 29.
Middlesex Journal, 20–23 June 1772.
- 30.
4 and 5 Anne, c. 17, and 5 Geo. II, c. 30.
- 31.
12 Geo. III, c. 72. There is no indication that the two events were connected in any way.
- 32.
SM XXXIV (1772), pp. 424–7.
- 33.
For an overview of the practical operation of the bankruptcy process in England, see Hoppit, Risk and Failure, pp. 35–7.
- 34.
Price, France and the Chesapeake, p. 693.
- 35.
Hoppit, Risk and Failure, p. 23.
- 36.
Scott, Sermon, pp. 13–14.
- 37.
Morning Chronicle, 17 June 1772; Middlesex Journal, 20–22 June 1772. Much of this was a continuation of tropes dating back to the South Sea Bubble. Some press examples from 1720–21 that have much in common with the 1772 press coverage can be found in Post Boy, 13–15 October 1720 and 20–22 April 1721; Post Man, 9–12 September 1721. For the echoes of the 1720–21 ‘Bubble literature’ in this period, see Stratmann, Myths of Speculation, pp. 186–205. The popular image of stock-jobbing is perhaps best exemplified by the 1770 anonymous satirical print A Scene in Change-Alley, among the Bulls, Bears, & Lame Ducks (BM Satires 4471, 107 mm × 154 mm, etching and engraving): while a ferocious melee of (literal) bulls and bears rages on, a (human) trader brandishes a bag of gold rejoicing for winning ‘5,000 for telling one Lye,’ another exclaims that ‘the more they fight, the more I get,’ and a bystander mournfully concludes that ‘This will ruin public credit.’
- 38.
Mortimer, Every Man His Own Broker, 1st edition, 1761, 13th edition, 1801.
- 39.
Middlesex Journal, 11–13 June 1772 and 6–8 August 1772; Morning Chronicle, 17 June 1772; London Evening Post, 4–6 March 1773. There were nevertheless accusations against Fordyce’s partners that they had happily ridden his star to riches and influence and perhaps even supported him in his flight (‘Mercator’, Gazeteer and New Daily Advertiser, 21 November 1772).
- 40.
Morning Journal, 11–13 June 1772, 6–8 August 1772; Morning Chronicle, 17 June 1772; London Evening Post, 4–6 March 1773; Lloyds Evening Post, 29–31 March 1773.
- 41.
Morning Chronicle, 16 September 1772. A similar argument was made by ‘Socius’ in the Public Ledger, 10 October 1772.
- 42.
1772 press examples include Gentleman’s Magazine XLII (1772), 311; Middlesex Journal, 13–16 June 1772; Morning Chronicle, 19 September 1772.
- 43.
Réflexions, pp. 12–13.
- 44.
Wilson, Anglo-Dutch Commerce, p. 178, mentions that there were suspicions in the Dutch press that the author was a French Jew, but his identity has been never discovered. Editions in French, Dutch, and English (the latter apparently now lost) are known to have been published, so this was not a modest effort.
- 45.
Goodspeed, Legislating Instability, as the title implies comes exactly to this conclusion.
- 46.
Banner, Anglo-American Securities Regulation, pp. 106, 107n; Morgan, Stock Exchange, pp. 63–5.
- 47.
Banner, Anglo-American Securities Regulation, p. 119 (both quotations).
- 48.
John Brooke, ‘VERNEY, Ralph, 2nd Earl Verney [I] (1714–91), of Claydon House, Bucks’, History of Parliament, 1754–1790, accessed online at http://www.historyofparliamentonline.org/volume/1754-1790/member/verney-ralph-1714-91
- 49.
Contemporary disgust with Colebrooke’s role in East India affairs is illustrated in the anonymous satirical print Shah Allum in Distress and the India-man wrecked (January 1773, BM Satires 5100, Etching 18 1mm × 110 mm): Set during the 1 December 1772 meeting of the General Court of Proprietors of the Company, Colebrooke, as ever ridiculed for his small stature, is held up by his breeches for the derision of the proprietors. At the bottom half of the print, an East India-man is shown driven to wreck upon ‘Treasury Cape’, with a reference on the edge of the picture to the annual £400,000 levy paid to the Treasury after the 1769 agreement between the Government and the Company. The derisory nickname ‘Shah Allum’ is a pun referencing the reigning Mughal Emperor Shah Allam II.
- 50.
Bowen, ‘Lord Clive and speculation in EIC stock’, p. 913.
- 51.
Sutherland, East India Company, p. 141.
- 52.
Sutherland, ‘Lord Shelburne and EIC politics’, pp. 450–1.
- 53.
For all the various estimates and their contemporary sources, see Bowen, ‘Lord Clive and speculation in EIC stock’, p. 909.
- 54.
The opinion of some contemporaries over the impact of the Government’s intervention in EIC affairs, and the role of the likes of Clive and Colebrooke in bringing it about, is illustrated in the anonymous satirical print, The Present Times, or the Nabobs Cl[i]ve and C[o]l[brook]e brought to Account (1 May 1773, 169 mm × 105 mm, Etching, BM Satires 5111). Clive and Colebrooke can be seen calling on the Prime Minister, Lord North to ‘Save us my Lord or we Perish,’ and receive the bags of gold that chain them and their Company to the Government. The Premier, with the Report of the Secret Committee of the Treasury sticking out of his pocket, admits that ‘I know the vileness of your deeds, but I must have more cash Money.’ Clive bestows the tenth part of his controversial Jaghir in return, while the notoriously small-statured Colebrooke has a paper reading ‘Job in the Alley £30,000’ sticking out of his pocket. A kilted Scot brandishing a claymore is driving the personification of Justice away, while the crashed India stock, quoted at ‘no price’, is trampled underfoot. The motto in pidgin Scots English reads underneath: ‘Deel awa[y] wi’ em au Rogues all alike, Bribers & Bribed’.
- 55.
Lucy Sutherland and Huw Bowen’s articles and books are still the best sources for this. In addition to those already referred to, see also Bowen, ‘Investment and Empire’, Sutherland, ‘The EIC and the Peace of Paris’. For other overviews of the EIC saga, see also Lawson, East India Company, 112–25; Watson, Reign of George III, pp. 162–72.
- 56.
Gentleman’s Magazine XLII (1772), p. 311.
- 57.
Colebrooke, Retrospection, pp. 49–51, 53–4, 76–82. It should be stressed that at the time of the Peace of Paris Colebrooke was not yet a director of the EIC.
- 58.
Bowen, ‘Lord Clive and EIC speculation’.
- 59.
Colebrooke, Retrospection, pp. 205–24. According to Sutherland, ‘Sir George Colebrooke’s corner’, p. 243, Gilbert was in fact ‘believed to be… little more than a cover for Sir George Colebrooke himself’.
- 60.
Also known as Creighton, or by the nickname of Orator Crichton due to his numerous fiery speeches on East India affairs. See Bowen, ‘The Little Parliament’, pp. 865–6, and ‘Crichton, William (1733–1782)’, DNB:40,651.
- 61.
It is notable that Colebrooke had been educated in the University of Leiden and well acquainted with Dutch finance. See Retrospection, pp. 2–5.
- 62.
London Evening Post, 22–24 September 1772. The claim on Fordyce’s oddly timed misfortune was repeated as an unattributed letter to the publisher in the same publication in 19–22 September, displaying a striking similarity in wording.
- 63.
General Evening Post, 17–19 December 1771.
- 64.
London Evening Post, 17–19 December 1771.
- 65.
‘Publicus’, Public Advertiser, 24 January 1772. To drive home their allegations, Colebrooke’s accusers did not hesitate to use innuendo concerning his father, who as ‘a banker in Threadneedle-street got half a million of money by his alley transactions [in the South Sea year]’ and as ‘a member of Mercer’s company… nearly brought them down to a state of bankruptcy, by playing a game with that company’s bonds… Who can say that Shah Allum is not a Chip of the Old Block?’ (Gazeteer and New Daily Advertiser, 21 January 1773, and Morning Chronicle, 6 January 1773, respectively).
- 66.
BM Add. 29,133, ff. 533–6, Laurence Sullivan to Warren Hastings, 28 April 1773. For other defences of Colebrooke’s 1771 ‘bulling’ of the stock, see ‘Zingis’, Public Advertiser, 19 December 1771, and London Evening Post, 26–28 December 1771.
- 67.
London Evening Post, 18–20 March 1773. The comment about ‘half their incomes’ refers to the reversion of the stock dividend to 6% per annum in October 1772 after a number of years of very high dividends reaching up to 12.5%. For other attacks in a similar vein, see also ‘Veritas’, London Evening Post, 15–18 August 1772; ‘A Sufferer’, Public Advertiser, 18 December 1773.
- 68.
‘Surena’, the Public Advertiser, 4 December 1772; General Evening Post, 19–22 September 1772.
- 69.
‘A Broker’, Morning Chronicle, 20 November 1773.
- 70.
The Stocks, or High Change in ’Change Alley (1734). Anonymous etching (BM Satires 2016). For other examples of eighteenth-century literary hostility to stock manipulation, see Stratmann, Myths of Speculation. For information manipulation being commonplace and for some of the market frauds an investor might have encountered at the time, see Poley, History of the Stock Exchange, pp. 8–12.
- 71.
Insider dealing as such became a crime officially in 1934 in the United States, while Britain added its own legislation in 1980. Even as recently as 1966, Henry Manne’s influential though controversial Insider Trading and the Stock Market argued that the modern statutory framework was ill-designed and counterproductive in its restriction of the free market for information. For an overview of insider dealing regulation theory, including the debate over Manne’s ideas, see Schotland, ‘Unsafe at any price’; Suter, Regulation of Insider Dealing, pp. 14–50; Ashe and Murphy, Insider Dealing, pp. 24–34; Brazier, Insider Dealing, Law and Regulation, pp. 75–88; Barnes, Stock Market Efficiency, Insider Dealing, and Market Abuse; Hopt and Wymeersch, European Insider Dealing, pp. 3–62; Bainbridge, Research Handbook on Insider Trading, pp. 1–30, and ‘Insider Trading: an overview’; Banerjee and Eckard, ‘Why regulate insider trading?’; Krawiec, ‘Fairness, efficiency, and insider trading’; Dalley, ‘From horse trading to insider trading’. The historical literature on insider dealing and information manipulation in general is both limited in size and does not cover this period or indeed go much farther back than the 1934 US legislation. One exception is George Robb’s White-Collar Crime in Modern England, which nevertheless does not extend its treatment before 1845. Wilson, Origins of Modern Financial Crime, also deals exclusively with the Victorian era. Alex Preda’s sociological review of eighteenth-century securities markets ‘In the enchanted grove’ also deals with information manipulation in passim, for example, pp. 290–2. Otherwise there are some scattered references in the introductory chapters of legal treatises, for instance, Ashe and Murphy, Insider Dealing, pp. 14–15. Brazier, Insider Dealing, Law and Regulation, pp. 2–20. As for the disreputable nature of insider dealing before criminalisation, we will just refer to one famous example: Oscar Wilde’s 1895 play An Ideal Husband, one of whose central themes is a fictitious minister trading on the inside information of the British Government’s purchase of the Egyptian Khedive’s Suez Canal shares in 1875.
- 72.
‘Fabricius’, London Evening Post, 18–20 March 1773.
- 73.
Morning Chronicle, 19 August 1772; ‘Veritas’, London Evening Post, 15–18 August 1772. Colebrooke’s dubious reputation was used in a convoluted court case in Scotland in August 1773 between George Home (by then officially the liquidator of the Ayr Bank) and Drummonds Bank in London, on the matter of a protested bill for £1,000 with a chain of six endorsers that included Colebrooke (by then a bankrupt). Home’s main defence was centred on Colebrooke’s underhandedness. He alleged that he put his brother-in-law, one Joshua Smith, to put a claim on the bill so that effectively the claim on Colebrooke himself be cancelled out (NAS CS 271/32001). See also NAS GD44/43/89/42, John Balfour to James Ross, 12 April 1773, for Colebrooke’s reputation as a rich, powerful, but shady operator, and GD44/43/88, Charles Gordon to the Duke of Gordon, 31 March 1773, where he is even referred to (perhaps ironically) as ‘the great Colebroke’ (sic).
- 74.
The alum corner is best described in Sutherland, ‘Sir George Colebrooke’s Corner’, pp. 244–51. The hemp corner is described in a petition to the Lord Chancellor by Isaac Mallison and others, 4 August 1780, TNA B1/69, fos. 199–208.
- 75.
Sutherland, East India Company, p. 81.
- 76.
Sutherland, East India Company, pp. 102–3.
- 77.
BOE, Minutes of the Court Of Directors, G4/21, fos. 286–7, 290, 292, 294–7, 307, 309, 311.
- 78.
Bowen, ‘Lord Clive and speculation in EIC stock’; Sutherland, East India Company, pp. 101–3, 122, 142–3. Other financiers are mentioned there in connection to the splitting campaigns, but as they do not enter into the 1772 picture, their names have been omitted from the list above to maintain some clarity.
- 79.
The partnership was officially Colebrooke, Lessingham and Binns. To quote Sutherland, ‘Sir George Colebrooke’s corner’, p. 239: ‘Lesingham and Binns (the latter of whom had formerly been a clerk in the bank) were only nominal partners’.
- 80.
Public Advertiser, 25 January 1773.
- 81.
Middlesex Journal, 20–23 June 1772.
- 82.
Sutherland, East India Company, p. 215.
- 83.
Burke, Memoirs, 116. Called this the ‘epidemical phrenzy of the people’ that was infecting the Commons. See Sutherland, East India Company, p. 222 for the same reference.
- 84.
An example is the sequestration proceedings against John Fordyce in Scotland, which list his house assets in exhaustive detail (NAS CS228/H/6/30).
- 85.
Suspect for the same reasons outlined in Chap. 2.
- 86.
The high return-on-equity ratio for 1763–65 is unrepresentative for the same reasons discussed in Chap. 2: the Dundee Bank was still building up its business in those years.
- 87.
Please refer back to Figs. 2.8–2.10, and Tables 2.6 and 3.2.
- 88.
This is according to contemporary press rumours, see Graham, Arbiter of Elegance, p. 267. Just before the crisis, in January 1772, the Adam brothers’ Adelphi debts amounted to £124,000, the majority of them in bills of exchange, while the cost to complete the project was estimated at close to another £30,000. Ibid., p. 269.
- 89.
Ibid., p. 274. The first is a press quote, and the second, unsurprisingly, a snide remark by Horace Walpole.
- 90.
Ibid., pp. 270–1. The brothers’ finances were another matter: they needed an Act of Parliament to authorise a lottery to restructure their debts. See Chap. 5.
- 91.
Smith, Correspondence, Charles Townshend to Adam Smith, 25 October 1763, pp. 95–6.
- 92.
And of the Douglas family more specifically, considering both Dukes and Archibald Douglas were part of it.
- 93.
Munn, Provincial Banking Companies, p. 30 (both quotes). See also Checkland, Scottish Banking, p. 125.
- 94.
Wilson, Anglo-Dutch Commerce, p. 171.
- 95.
Munn, Provincial Banking Companies, p. 33. Checkland, Scottish Banking, p. 125, makes the same point: ‘In a sense, the Ayr Bank represented the dream, held since the time of John Law, of a Scottish land bank, for the acres of all these noblemen and lairds were banking for the company’. He does, however, point out that this basis was leavened by a strong contingent of merchants and urban professionals, as indeed shown by the demographics presented here in Table 4.1.
- 96.
‘Atticus’, Public Advertiser, 8 July 1772; Gentleman’s Magazine XLII (1772), pp. 310–11. In Fordyce’s case at least this was an exaggeration. Though he may have started out as a hosier and a bank clerk at Boldero, Carter & Co. before he made his fortune, his family was an eminently respectable one; one of his brothers was a prominent physician, while another was the celebrated clergyman whose Sermons To Young Women (1765) were to become such a standard accessory of respectable homes as to be the target of Jane Austen’s irony in Pride and Prejudice. See Alan Ruston, ‘Fordyce, James (1720–1796)’, DNB: 9879.
- 97.
General Evening Post, 5–7 January 1773. Similar feelings were expressed in the Morning Chronicle, 10 February 1773, and Scott, Sermon, pp. 2–3.
- 98.
Hume, On the Balance of Trade, p. 358.
- 99.
Middlesex Journal, 28–30 January 1773.
- 100.
London Chronicle, 16–18 July 1772.
- 101.
‘E.M.’ in the Public Advertiser, 15 July 1772. Other personal attacks on Fordyce’s luxurious living can be found in Bingley’s Journal, 11–18 July 1772 and Bingley’s London Journal, 12–19 September 1772. Speculators were often equated with so-called Macaronis, the fashionable young crowd often just returned from their Grand Tour with a taste for Continental (especially French) fashions. Macaronis were already a press controversy in 1772, so the association with gambling and speculation was quickly made. Fordyce was referred to as a ‘Macaroni Gambler’ in the satirical print referred to in Chapter 1, footnote 4. More contemporary associations of macaronis with speculators can be found in General Evening Post, 31 March–2 April 1772; Morning Chronicle, 26 May 1772; Public Ledger, 5 August 1772; Middlesex Journal, 14–17 March 1772; Public Advertiser, 11 June 1772. For macaronis and macaroni prints in general, see Donald, Age of Caricature, pp. 75–93. For an introduction to the vast literature on the luxury debate, see Andrew, Aristocratic Vice; Sekora, Luxury: The Concept in Western Thought.
- 102.
Bingley’s London Journal, 11–18 July 1772.
- 103.
Morning Chronicle, 15 August 1772.
- 104.
Bingley’s London Journal, 12–19 September 1772.
- 105.
Steuart, Political Economy IV.ii.I–VI, pp. 350–63. For an analysis of Steuart’s banking theory, see Sen, Economics of Sir John Steuart, pp. 79–105; Diatkine and Rosen, ‘Steuart & Smith: banking systems and growth’; Ülgen, ‘Steuart’s Principles as a modern analysis of monetary economy’; Checkland, ‘Adam Smith and the bankers’; Lapavitsas, ‘Banks and the design of the financial system’.
- 106.
For instance, SM XXV (1763), pp. 558–62, 580–8, 646–8; SM XXVI (1764), pp. 18–33, 89–92.
- 107.
Young, Political Arithmetic, p. 51.
- 108.
Law, Money and Trade Consider’d. For a modern analysis of his argument, see Murphy, ‘John Law—aspects of his monetary and debt management policies’ and Genesis of Macroeconomics. For other eighteenth-century examples of the argument, see Discourse on Land-Bank (1706) and Method of establishing paper credit on a solid foundations by means of a National Land-Bank (1745).
- 109.
Thayer, ‘Land-bank system’, p. 145. Two private land banks had been actually founded in Massachusetts, but they had proved short-lived. Ibid., p. 154.
- 110.
Young, Political Arithmetic, as above.
- 111.
Mayne and Nedham. Both were shareholders in the bank for one share each. Robert Mayne went bankrupt in 1781 (TNA B1/70, fos. 61–3).
- 112.
Price, Capital and Credit, pp. 67–9.
- 113.
Refer again to Table 2.11 in the previous chapter, and note that the rest of the bank’s assets consisted of bills of exchange which were part of its financing operations.
- 114.
As a reminder: the Precipitation was the 1778 report produced by the Committee of Inquiry set up after 1773 to investigate the causes of the Ayr Bank’s failure and was almost certainly written in person by George Home of Branxton, the factor and manager empowered by the Committee to oversee the unwinding of the bank. Please refer again to Chap. 1 as needed.
- 115.
Precipitation, p. 21.
- 116.
Precipitation, p. 22, and Appendix VII, pp. 89–91.
- 117.
NAS GD207/149, printed pamphlet by ‘A Partner’. Wight and Ferguson (1778), Fordyce (1779), Ferguson (1778).
- 118.
NAS GD224/178/4/6.
- 119.
Precipitation, Appendix IV, pp. 32–47.
- 120.
Precipitation, p. 22 and Appendix VII, pp. 89–91. Munn, Provincial Banking Companies, p. 32, dismisses many of the Precipitation’s charges as ‘either highly contentious or sheer nonsense’.
- 121.
Refer back to Chap. 2.
- 122.
Patrick Home was at the time in Italy on his Grand Tour, so George was overseeing both the work at Wedderburn and all the financial affairs of the family. The two remained very close, as evidenced by George’s numerous and chatty letters to his cousin over a period of several decades.
- 123.
NAS GD 267/12/18, George Home to Patrick Home, 22 March 1773. As is made evident by the letter, Patrick was reluctant to accept this source of funds, even after taking into account the extreme cash shortage after the crisis.
- 124.
NAS GD 224/178/2. This was forwarded by Dundas to the Duke of Buccleuch.
- 125.
This will be discussed in more detail in Chap. 4.
- 126.
As will be seen in Chap. 5, this proved to be wildly optimistic.
- 127.
NAS GD267/22/7/89, George Home to Patrick Home, 26 August 1773.
- 128.
NAS GD224/178/6.
- 129.
Brady, ‘So Fast To Ruin’, pp. 25–44. Checkland, Scottish Banking, p. 133, also condemns the bank’s directors for ‘acting as fools to a major degree and as knaves to a lesser’.
- 130.
Munn, Provincial Banking Companies.
- 131.
Precipitation, p. 18, WoN, II.ii.57.
- 132.
These were the islands won from the French in the Seven Years’ War.
- 133.
NAS GD267/1-4. It must be stressed however that there is no evidence that the Homes’ Grenada investments were financed by the Ayr Bank, which they had predated by some years.
- 134.
Colebrooke, Retrospection.
- 135.
BOS 1/30/4: pp. 35, 45, 47–8, 54, 62; ABC 2/2/1: pp. 32, 41, 43, 45–6, 68.
- 136.
Munn, Provincial Banking Companies, pp. 24–5.
- 137.
Kindleberger, Manias, p. 44.
- 138.
Case, see Chap. 2.
- 139.
Please refer back to Table 2.12.
- 140.
‘Considerations on the present State of Credit’, Morning Chronicle, 25 June 1772.
- 141.
Pressnell, Country Banking, pp. 36–44.
- 142.
Wight and Ferguson, Letter, 3. Ferguson made a similar argument in a 1773 letter to the Duke of Queensberry, quoted in Munn, Provincial Banking Companies, p. 31.
- 143.
Precipitation, pp. 29–30 and Appendix V, pp. 54–6. This was the bank of Dimsdale, Archer, and Byde.
- 144.
Precipitation, p. 36 and Appendix III, pp. 50–1.
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Kosmetatos, P. (2018). ‘Roguery’, ‘Stupidity’, and Permissive Regulation: Asset Speculation and Speculative Projects in 1763–72. In: The 1772–73 British Credit Crisis. Palgrave Studies in the History of Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-70908-6_3
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