Liverpool and the 1793 Credit Crunch

Jock — Tue, 08 Jul 2008 01:02:39 +0000

Spotted an interesting piece on BBC News tonight about Liverpool:

First-time buyers and low income families affected
by the credit crunch could soon be helped onto the property ladder by
Liverpool City Council.

The authority is considering
proposals to offer council-backed loans to people who are having
problems getting them from banks or building societies.

All very interesting. In 1793 there were some banking collapses in London and an important bank in Liverpool went bust as a consequence. There was literally not enough cash about to oil the wheels, or perhaps rather fill the sails, of the burgeoning trade of the city. The council went to ask for a loan from the Bank of England but it was refused. So it took more radical action. They petitioned for a local Act of Parliament "...to enable thee Common Council of the Town of Liverpool in the Coutnty of Lancaster on behalf of and on account of the Corporation of the said Town to issue negotiable notes for a limited time and to a limited amount."

For two years the city issued its own currency on the creditworthiness of the city and its citizens and traders, until the financial storms rocking the global trade of which Liverpool was emerging as the centre calmed down.

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Liverpool and the 1793 Credit Crunch