‘Country Rag Merchants’ and English Local Currencies in the Late Eighteenth and Early Nineteenth Century

23 Pages Posted: 10 Nov 2015

See all articles by Iain Frame

Iain Frame

University of Kent - Kent Law School

Date Written: December 2015

Abstract

In the late eighteenth and early nineteenth century, communities across England used country bankers’ notes almost as much as they used coins and Bank of England notes. Accounting for the relative success of these alternative currencies is challenging, however, due to the frequency of financial crisis during the period. If, during a crisis, all note holders attempted to enforce the promise to pay in gold coin against the issuing banker, the ‘law‐finance paradox’ would leave some note holders with gold coin, but would leave many more with merely ‘country rags’ or worthless pieces of paper. Building on both the credit approach to money and the relational approach to contract, this article shows note‐using communities successfully responding to financial crisis. They frequently did so by formalizing the bonds of reciprocity and trust tying the community to its note‐issuing banker – bonds sometimes made all the stronger by legal enforceability.

Suggested Citation

Frame, Iain, ‘Country Rag Merchants’ and English Local Currencies in the Late Eighteenth and Early Nineteenth Century (December 2015). Journal of Law and Society, Vol. 42, Issue 4, pp. 588-610, 2015. Available at SSRN: https://ssrn.com/abstract=2688303 or http://dx.doi.org/10.1111/j.1467-6478.2015.00726.x

Iain Frame (Contact Author)

University of Kent - Kent Law School ( email )

Canterbury, Kent CT2 7NS
United Kingdom

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