ABSTRACT
THEprovisionoflong-termcapitaltofinancethestate'swarexpenseswas themostnovelfeatureoftheFinancialRevolution,andtheonethatattracted mostcontemporarynotice.Butthearrangementsmadeforgovernment short-termfinancewereofequal,thoughlessconspicuous,importance. Theseincludedanticipationofannualtaxrevenue;paymentoncreditfor goodsandServicessuppliedtotheArmyandNavy;andCo-ordinationofthe government'sshort-termfinancialneedswiththoseofthemoniedcompanies, particularlytheEastIndiaCompanyandtheBankofEngland,theformer, inparticular,beingaprominentshort-termborrower.Carehadalsotobe takenthatshort-termneedsdidnotconflictwiththoseforIonger-dated finance,sincethetwowerecloselyconnected.Thiswasaproblernofwhich themoniedcompanieswereweilaware.AsSirJohnEyles,theSubGovernoroftheSouthSeaCompany,toldhisshareholdersinSeptember 172I,'theMaintainingtheCreditofyourBondsistheonlywaytosupport thetrueValueoftheStock,theonealwayessufferingproportionallytothe DiscreditoftheOther'.1Fromagovernmentpointofview,issueofshortdatedpaperbeyondthecapacitytoredeemitregularly(andthusmaintain publicconfidenceinitwhileoutstanding)wasaperennialfiscaltemptation. TheFrenchgovernment,forexample,afterI704,feilpreytothistemptationtosuchanextentthatitswholemachineryofcreditwassoonvirtually ruined.TheEnglishseemedlikelyintheI69ostotreadasimilarpath,but recoveredintime.
