Introduction

We start with a key and little-noticed event in December 1784, just after Jacques Necker, the Swiss banker and director general of finance of the absolutist state par excellence, France, had published his book De l’administration des finances de la France, in which he warned of the irremediable collapse of its finances and of the grave consequences for the state (Burnand, 2004). Across the Pyrenees, in another equally absolutist and despotic state of the same dynasty as France, Spain’s Minister of Finance, Miguel Múzquiz, made a curious request to the country’s financial agent in Holland, passing on the desire of Charles III’s government that they should be allowed to pay back completely the loan taken up in that market during the latest war against Great Britain. The Dutch lenders’ reaction was significant. According to the reports from the Spanish government’s agent, the lenders flatly refused to accept the proposal, even though a 4% early-repayment fee was offered. The Spanish government’s pleas fell on deaf ears. In the agent’s judgement, their insistence served only ‘to cement the capitalists’ confidence in Spain’s creditworthiness… and deepen the confidence with which they made the loan’.1 In the eyes of the Dutch lenders, who were connoisseurs of the public credit situations of all European states, Spain’s very desire for early repayment was proof of its creditworthiness.