DP15471 Financing the rebuilding of the City of London after the Great Fire of 1666

Author(s): D'Maris Coffman, Judy Z. Stephenson, Nathan Sussman
Publication Date: November 2020
Keyword(s): default, England, Financial Development, Financial Intermediation, growth, interest rate
JEL(s): G23, N2, N23, O16, O43
Programme Areas: Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15471

This paper presents new archival data to analyse how, in the absence of banking or capital market finance, the London Corporation funded the rebuilding of London after the Great Fire of 1666. The City borrowed at rates much lower than previously thought from its citizens and outside investors to replace vital services and to support large improvement works. Borrowing was partly secured on its' reputation and partly secured by future coal tax receipts. Although records show that the funding from these sources was forthcoming and would have covered costs, and most of the rebuilding project was completed in less than a decade, having invested in public goods without generating the expected fiscal flows, the City defaulted in 1683.