FinanceClosely related to the subject of trade is that of public finance. If trade is the great machinery that creates England’s wealth, credit is the oil that keeps the machine running. One would collapse without the other. And because the two are so tied up with each other, the people needn’t fear that, out of some resentment or animosity toward a new ministry or policy, the wealthy would stop feeding their capital into the great financial machine. Defoe again shows himself aware not only of domestic but of foreign matters by writing two works on the financial schemes of France and the problems he saw there.
The Villainy of Stock-Jobbers Detected, and the Causes of the Late Run upon the Bank and Bankers Discovered and Considered. London, Printed in the Year, MDCCI.[See larger image] Stock-jobbing is the practice of buying and selling stocks to make a quick profit (a “jobber” is a trader), and Defoe in this pamphlet protests that such behavior invites instability in the market and has the potential to ruin trade. Stock-jobbers are capable, when their favored candidates “are not chosen Lord Mayors or Parliament-Men, [of taking] the Liberty to shew their Resentments by Affronting the Government, ruining Banks and Goldsmiths, and sinking the Stocks of all the Companies in Town” (21). While Defoe recognizes that stock-jobbers are an evil that is here to stay, he does offer some remedies to keep their villainy in check.
An Essay upon Publick Credit: being an Enquiry How the Publick Credit comes to depend upon the Change of the Ministry, or the Dissolutions of Parliament; and whether it does so or no. With an Argument, Proving that the Publick Credit may be upheld and maintain’d in this Nation; and perhaps brought to a greater Height than it ever yet arriv’d at; Tho’ all the Changes or Dissolutions already Made, Pretended to, and now Discours’d of, shou’d come to pass in the World. London: Printed, and Sold by the Book-sellers, MDCCX.[See larger image] At the time Defoe was writing this pamphlet, England was in the midst of a complete and sudden change of ministry. In this climate of instability and uncertainty, Defoe tries to allay fears that credit is subject to such changes in the government. Credit is, rather, “the quickening SOMETHING, Call it what you will, that gives Life to Trade, gives Being to the Branches, and Moisture to the Root; ‘is the Oil of the Wheel, the Marrow in the Bones, the Blood in the Veins, and the Spirits in the Heart of all the Negoce, Trade, Cash, and Commerce in the World” (9). Something so fundamental cannot possibly be tied to any one man nor any set of men.
An Essay upon Loans: or, an Argument proving that Substantial Funds settled by Parliament, with the Encouragement of Interests, and the Advances of Prompt Payment usually allow’d, will bring in Loans of Money to the Exchequer, in spight of all the Conspiracies of Parties to the contrary; while a Just, Honourable, and Punctual Performance on the part of the Government, supports the Credit of the Nation. London, Printed, and Sold by the Book-sellers, 1710.[See larger image] By “loans” Defoe is speaking not of those loans between tradesmen and other individuals but of “Government Borrowing Money of the Subject” (5). This had become necessary due to the vast sums required for the wars with France, which had been going on for so many years. Recently, those who had become even wealthier by lending money to the government began “to talk of influencing the publick Affairs, and as it were menacing the Government with Apprehensions of their Lending or not Lending, as they are, or are not pleased with the Management of, or Managers in the publick Oeconomy” (10). Defoe argues that this is impossible. The monetary interests of these investors is now so tied in with lending to the government that they cannot in good (business) conscience stop doing it. He says that no man of wealth, no usurer, no businessman will go against his interest (gaining more money), no matter what their political zeal.
The True State of the Case between the Government and the Creditors of the Navy, &c: as it Relates to the South-Sea-Trade. And the Justice of the Transactions on Either Side Impartially Enquired into. London: Printed, and Sold by J. Baker, at the Black-Boy in Pater-Noster-Row, 1711.[See larger image] This is a piece of propaganda for Harley’s South Sea scheme, which had inspired many complaints since its approval in the Commons earlier that year. It shares many arguments with another pamphlet, An Essay on the South-Sea Trade.
The Chimera: or, the French way of Paying National Debts, laid open. Being an Impartial Account of the Proceedings in France, for raising a Paper Credit, and settling the Mississippi Stock. London: Printed for T. Warner, at the Black-Boy in Pater-Noster-Row, 1720.[See larger image] At a time when French credit was at a low ebb, a Scottish financier by the name of John Law stepped in and proposed a series of strategies for getting the French economy back on its feet. First he established a royal bank in France whose stock was held not by the government (in whom the people placed no financial trust) but by wealthy men who could afford to back such a venture. Soon after, Law bought the ailing Mississippi Company and breathed new life into it. Law was also in favor of abandoning the gold standard and using only paper money, believing that this would stimulate commerce. Defoe’s history goes into detail about the various schemes that Mr. Law used to get the French economy out of the doldrums and his subsequent schemes with the Mississippi Company, speaking often with awe of the audacity of Mr. Law while also calling the whole enterprise a “Phantosme,” remaining certain that “its fate without question must come ere long, since there is no Foundation equal to the Structure that now stands upon it…. It must fall at last, and all I can say of it at present can be only this, that when it comes Great will be the fall of it” (76) Although Law’s schemes initially helped to boost the ailing French economy, eventually his Mississippi Company scheme became a nightmare of hyperinflation. Investors found that there were no precious metals to back all the paper notes that they had been issued, and many were ruined.
The Case of Mr Law, Truly Stated. In Answer to a Pamphlet, entitul’d, A Letter to Mr. Law. Lonon [sic]: Printed for A. Moore, near St Paul’s, and Sold by the Booksellers of London and Westminster. 1721.[See larger image] After the Treaty of Union was concluded between England and Scotland in 1707, Defoe set to writing a full account of the history of the Union, going back to the first attempts at unifying the two nations through marriage (beginning with Edward I’s intent to have his son Edward II marry Margaret, heiress to the throne of Scotland). For the current Union, he provides transcripts of the minutes for the many meetings of the Commissioners in Whitehall and of the Scottish Parliament as they tried to hammer out a treaty that would be acceptable to all.