Financing the rebuilding of the City of London after the Great Fire of 1666

Abstract

This article presents archival data on rebuilding costs and interest rates from the Corporation of London, 1666-83, to analyse how, in the absence of banking or capital market finance, the London Corporation funded the rebuilding of London after the Great Fire. The City borrowed from its citizens and outside investors at rates much lower than previously thought to replace vital services and to support large improvement works. Lenders were reassured by the Corporation's reputation, and its borrowing was partly secured by future coal tax receipts. The records show that funding from these sources was forthcoming and would have covered the costs. Most of the rebuilding was completed in less than a decade; but having invested in public goods without generating the expected flows of income in the form of improved fees, fines, and rents, the City defaulted in 1683. K E Y W O R D Scredible commitment, early modern finance, financial development, Great Fire of London, interest rate, municipal debt By 1666 London was as large outside the walls as it was within. When the Great Fire of London burned for a week and consumed almost the entire area of the old City, including the main public buildings, wharves, 87 parish churches, and St Paul's Cathedral, there were few deaths. Reportedly, more than 13 000 houses burnt down, and some 70 000 people were displaced. 1 Although the crisis created unprecedented challenges for the country as well as for the Corporation of London, the displacement and disaster relief were managed within the capability of 1 Strype, Survey of the cities. All subsequent quotations and estimates, including that of Brett-James, Growth of Stuart London, come from Strype, but it should be noted that all estimates of financial sums are calculated in rents, not in building costs.

O debate sobre as causas da Revolução Industrial

“…Evidência para a "City" de Londres também sugere que o mercado financeiro era atuante antes da Revolução Gloriosa. Diferente dos valores apresentados por North e Weingast, de taxas de juros de 10% ou mais antes de 1688, informações da companhia pública responsável por reconstruir Londres após o incêndio de 1666 (The Corporation of London) mostram que a empresa tinha acesso a crédito com uma taxa de apenas 4% (Coffman;Stephenson;Sussman, 2022). A revolução financeira na Inglaterra não ocorreu, portanto, somente após o "credible commitment" de North e Weingast.…”

Organising Project Finance

“…The English crown over the seventeenth-and eighteenth-century licenced 'projectors' to raise non-recourse financing for a variety of projects of perceived public benefit, including fen and swamp drainage, fisheries, wreck salvage, and even overseas colonial ventures (Yamamoto 2018). Most financing of public works in the growing trading cities was done by municipal corporations who borrowed on their own balance sheets (Coffman et al 2022).…”

Review of periodical literature for 2022: (iii) 1500–1700

“…Moving now from countryside to city, studies of early modern London society and its economy were plentiful this year. Rebuilding after the 1666 Great Fire of London and municipal borrowing were subjects of an article by Coffman, Stephenson, and Sussman. Tracing the finances raised by the Corporation of London from the new sea‐coal tax and private lending, the authors argue that the Corporation's rebuilding of the city was financed by its access to private credit at rates lower than thought, though this ultimately did not prevent it from defaulting in 1683.…”