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Public Functions, Private Markets: Credit Registration by Aldermen and Notaries in the Low Countries, 1500–1800

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Financing in Europe

Part of the book series: Palgrave Studies in the History of Finance ((PSHF))

Abstract

Gelderblom, Hup, and Jonker explore financial market development in preindustrial Europe by examining the financial functions performed by aldermen and notaries. Using a new dataset of 12,000 credit transactions registered by these public officials in six different cities in the Low Countries between 1500 and 1780, we analyze who used their services, for which purposes, and at what price. We find that notaries and aldermen were very active in registering debt contracts, but failed to obtain a commanding or even strong position as financial intermediaries in the way Parisian notaries did. As they registered only a small fraction of local credit transactions, notaries and aldermen in the Low Countries never possessed the information advantage of their French counterparts. Our findings highlight the degree to which subtle regulatory differences profoundly affected the dynamics of financial market evolution.

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Notes

  1. 1.

    Cf. the distinction made by Schnapper (1956) between the rente as a counterclaim created to finance the transfer of a property, and the constitution of a rente as a means to obtain ready cash on the collateral of a house or a piece of land.

  2. 2.

    Following the same logic, we did collect life annuities, but the number of these self-extinguishing cash loans was very limited, i.e. 230 across the entire sample.

  3. 3.

    Notably in Holland, the market for these kustingen was very large. For instance, in Amsterdam the number of registered kustingen rose from 150 to 200 per year in the late sixteenth century to 1500 in 1620 and 900 in 1660—an upward trend related to the city’s very rapid expansion during the Golden Age. By 1700, the number had dropped to 300 (EURYI/VIDI database, data drawn from ACA, Archive 5063, Register van Schepenkennisen 1594–1595. Archive 5065, Register van Rentebrieven en Transporten van los- en lijfrenten, 1580, 1620, 1660, 1700, 1740, 1780).

  4. 4.

    We know from the work of Soly, Dambruyne, and Hanus that the number of recorded transfers in Antwerp, Ghent, and Den Bosch, respectively, was very large in the sixteenth century. A small sample of our own, for the aldermen of Den Bosch in 1580 and 1620, revealed 173 and 113 transfers of annuities per year, respectively. SDB, Archive 5.1, Bosch Protocol, 1580, 1620.

  5. 5.

    Table 3 presents a lower bound estimate of this very gradual process, since, to avoid duplication with the aldermen, we did not collect transactions secured on real estate processed by the notaries.

  6. 6.

    In our tabulation, the general mortgage includes ‘persoon en goed’ and ‘persoon’; real estate includes: houses, land, workshops, mills; financial assets include bonds, shares, and loans; other includes: merchandise, ships, unspecified ‘goods’, collective goods (e.g. from inheritance or communal institution), and any other kind of collateral.

  7. 7.

    We follow Soly (1977) in categorizing a very broad group of artisans, service providers, and workers as craftsmen and laborers. It should be noted however that only a few dozen of these have job titles such as ‘arbeider’, ‘dienstbode’, and ‘onvrije schipman’ that suggest they were indeed working for wages, instead of being self-employed. Thus, the vast majority of the debtors and creditors that fall under this category may have belonged to the urban middling groups.

  8. 8.

    In 1620, we recorded 169 loans (11.7%) of less than 100 guilders, in 1700, there were 74 loans (3.7%) and in 1780 only 10 (0.6%).

  9. 9.

    Since we filtered out the direct mortgaging of property on purchase, the low percentage of loans to buy real estate fails to surprise.

  10. 10.

    In 703 of the 1,240 aldermen contracts with a gender difference between parties, 57% of the women were widows; in 884 of the 1,605 notarial contracts, 55% of the women were widows. The vast majority of these widows were creditors, not debtors.

  11. 11.

    Cf. Van Bochove and Kole (2014), p. 53, who note that the private, preprinted contracts that were used in Amsterdam in the second half of the seventeenth century sometimes contained a clause in which the debtor agreed to formally register the loan with the notary if so desired by the creditor.

  12. 12.

    We can be brief about a potential fourth function of the notaries, the pooling of household wealth to fund government expenditure. Unlike in France, notaries in the Low Countries played no role whatsoever in the placement of public loans (Gelderblom and Jonker 2011, 2014).

  13. 13.

    Cf. Van Hoof, Generale zekerheidsrechten 108–109 quoting Pos, Hypotheek op onroerend goed 161, about merchants generally lacking the time to formalize claims.

  14. 14.

    Cf. also Sprenger, ‘Notariaat’, 128, 130; and for a rare instance of restrictions in Breda, idem, 124.

  15. 15.

    Roes, Goede, afvallige notaris 7, 9, 13, 14, on the social status of notaries in Gelderland.

  16. 16.

    Roes, Goede, afvallige notaris, 7, 9; Sprenger, ‘Notariaat’, 127, and 125, mentioning one seventeenth-century case of a surgeon-notary.

  17. 17.

    Van Bochove (2013). In Utrecht’s notarial protocols, we found 218 transfers of private and public bonds in 1740, and another 256 in 1780. With 17 and 19 transfers in 1660 and 1700, respectively, this specialization seems much less pronounced in the seventeenth century (HUA, Archive 34–4, Notariële archieven stad Utrecht). In the eighteenth century, notaries in Den Bosch also recorded several dozens of transfers per year: 10 in 1700; 33 in 1740; 33 in 1780 (SDB, Archive 9.1, Notarieel Archief, 1660, 1700, 1740, 1780).

  18. 18.

    That is, respectively, Jan Kol, a cashier and fledgling deposit banker, and D.W. van Vloten, an underwriter for Hope & Co.’s foreign loans (Van Bochove 2013).

  19. 19.

    There is a possibly very important technicality here: from about 1680 onward public bond holders paid a withholding tax on Holland’s bonds which stood at 1.5% from the early seventeenth century onward. It is quite conceivable that loans that were formally registered also fell under this tax regime, which would imply that the yield on these private loans was actually on par with the public loans.

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Authors and Affiliations

  1. Universiteit Utrecht, Utrecht, Netherlands

    Oscar Gelderblom & Joost Jonker

  2. UC Irvine, Irvine, CA, USA

    Mark Hup

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  1. Oscar Gelderblom
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  2. Mark Hup
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Editors and Affiliations

  1. Department of Economics Management and Quantitative Methods, University of Milan, Milan, Italy

    Marcella Lorenzini

  2. Department of Economics and Management, University of Trento, Trento, Italy

    Cinzia Lorandini

  3. Bartlett Faculty of the Built Environment, University College London, London, United Kingdom

    D'Maris Coffman

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Gelderblom, O., Hup, M., Jonker, J. (2018). Public Functions, Private Markets: Credit Registration by Aldermen and Notaries in the Low Countries, 1500–1800. In: Lorenzini, M., Lorandini, C., Coffman, D. (eds) Financing in Europe. Palgrave Studies in the History of Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-58493-5_7

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