For the want of ‘scots projects’: Scottish Financial Innovation and the nature of the Financial Revolution, 1688-1727
Taking root in the aftermath of the Glorious Revolution of 1688-89, the Financial Revolution extended into the middle of the next century, shadowed in Britain by union, rebellion, and dynastic change. The classic literature on the Financial Revolution is plentiful but has paid little attention to the Scottish experience. More recent work has sought to widen the perspective from which the Financial Revolution is viewed, Scotland, however, remains poorly-served. When the subject of Scotland is considered, there is an emerging consensus that identifies elements of a Scottish version of the Financial Revolution. As yet, however, no-one has argued for distinctive and significant Scottish financial innovation. There is an understanding that something occurred, something distinct from what happened in England or Ireland, but its full character remains unclear.The focus paid to English affairs is not, however, unjustified. The 1690s witnessed significant financial development here - the Bank of England, the establishing of a national debt, an emerging stock market, a failed national land bank, significant economic debate - in Scotland, however, financial development was much slower. Here there was a distinct growth in joint-stock companies during the first half of the 1690s, including the founding of the Bank of Scotland and the Company of Scotland in 1695. Forty-seven joint-stock companies were in existence during the first five years of the decade, by 1700, however, only twelve remained active. For the next three decades financial development in England boomed, whilst Scotland stagnated.This thesis takes the view that this was due to the financial fallout of the failed colonisation at Darien. This event severely tempered the attitude of the Scottish administration to new projects. The ‘financially confident’ Scots that had emerged from the Glorious Revolution were no more. Things failed to improve in the direct aftermath of the Union of 1707 when the founding of new Scottish institutions, indeed even the continuing operation of existing ones such as the mint, became difficult within a British framework in the short term. Consequently, the seeds of a Scottish Financial Revolution had been sown in barren soil. After 1695, no new Scottish financial institutions were formed for more than thirty years, and any financially innovative plans that were put before the pre-union administration were turned down. This thesis therefore postulates that the Scottish Financial Revolution occurred in three stages; first the aborted effort of the 1690s, followed by three decades of economic debate and foreign endeavours by members of the Scottish global community, before the third phase, with the establishment of the Royal Bank of Scotland in 1727, in which the Financial Revolution in Scotland commenced in earnest.
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