Financial innovations and political development:
evidence from revolutionary England
Saumitra Jha∗
Stanford University
August 25, 2010
Abstract
The English Parliament’s struggle for supremacy in the seventeenth century was
crucial for the development of representative government in the English-speaking
world, yet its lessons continue to be debated. This paper provides the first systematic evidence on the determinants of individuals’ decisions to join the coalition
for revolutionary reform. The paper employs a novel micro-dataset on the endowments of each member of the Long Parliament (1640-60) that initiated England’s
institutional transformation and finds that the key determinants of support for
reform were overseas interests and other factors over which the executive enjoyed
discretion under the existing constitution. Further, investment in newly available
shares in overseas companies appears central in fostering support for reform, chiefly
among those lacking prior overseas interests. The paper argues that the innovation
of shares allowed new investors to take advantage of emerging economic opportunities overseas, aligning their interests with overseas traders. However, since
these shared opportunities were heavily exposed to executive discretion, financial
innovation broadened support for parliamentary control of government.
JEL codes: O10, F10, K00, P10, N23
Keywords: Institutions, Civil War, Conflict, Constitutional Reform, Economic
Growth, Financial Markets, Trade, Political Economy, Revolution
∗
Address: saumitra@gsb.stanford.edu; Graduate School of Business, 518 Memorial Way, Stanford CA
94305. I owe particular thanks to Susan Athey and Avner Greif as well as Ran Abramitsky, Amrita
Ahuja, Ken Arrow, Dan Bogart, Ernesto Dal Bo, Ann Carlos, Mauricio Drelichman, Jeffry Frieden,
Sean Gailmard, Oscar Gelderblom, Claudia Goldin, Luigi Guiso, Eric Hilt, Kimuli Kasara, Timur Kuran,
David Laitin, Jessica Leino, Kris Mitchener, Aprajit Mahajan, Noel Maurer, Ted Miguel, Pedro Miranda,
James Robinson, Matthias Schündeln, Carmit Segal, Jordan Siegel, David Stasavage, Nathan Sussman,
Barry Weingast and seminar participants at Clio, PacDev, Berkeley, Harvard, NYU, Princeton and
Stanford. Zac Peskowitz provided excellent research assistance. This research benefits from articles
made available prior to publication by the History of Parliament Trust.
1
Electronic copy available at: http://ssrn.com/abstract=934943
1
Introduction
The Father of Parliaments, which first rendered Parliaments supreme, and
has since set the world upon the chase of Parliaments . . .
- Thomas Carlyle (1845, pg.316), referring to the Long Parliament.
The seizure of executive authority by Parliament from the Crown in the years spanning
England’s Civil War (1642-48) was arguably central for the development of representative
government in the English-speaking world.1 Before the Long Parliament of 1640-1660,
the king of England enjoyed independent sources of finance and possessed “sovereignty”
rights over foreign policy, including rights to declare war, to collect customs and to charter
monopolies on most goods and innovations introduced from abroad. The king called and
dismissed Parliament at will. Between 1629 and 1640, no parliament sat in England.
The summoning of parliament in 1640 initiated a remarkable process of institutional
change. Through both legislative and ultimately violent means, the “Long” Parliament
acquired rights to convene without royal approval, to control state finance and to direct
foreign policy and war: in other words, Parliament acquired the Crown’s sovereignty
rights (Howat, 1974, Smith, 2003). These institutional changes have been since recognized
as the beginning of a path of experimentation that left England with the one of the world’s
most enduring, and most commonly imitated, traditions of representative government.2
With the acquisition of executive authority, the Parliamentary victors of the Civil
War instituted dramatically new policies. Large investments in a particular set of public
goods– the Navy– supported the expansion of England’s international trade. These
policies are credited with London’s emergence as the most important trading hub of
Europe by the early eighteenth century and Britain’s acquisition of an empire that spread
the influence of its institutions– including the common law, parliamentary paramountcy
in government, and the Bill of Rights– around the world (Rodger, 2004, de la Escosura,
ed, 2004, Ormrod, 2003, Ferguson, 2002).
Given the importance of this episode for political development in Britain and elsewhere, the key puzzle, among the most famous and enduring in political economy–
1
For example, Friedrich Hayek (1960, pg.160) suggests:“Out of the extensive and continuous discussion . . . during the Civil War, there gradually emerged all the political ideals which were thenceforth to
govern English political evolution.” See also Murrell (2009).
2
The transfer of the rights over state finance and foreign policy to Parliament was intermittently challenged following the Restoration of the monarchy in 1660, until being consolidated following the Glorious
Revolution of 1688. This has led to debate about the relative importance of the Civil War and Glorious Revolution in England’s subsequent development (see e.g. Murrell, 2009). However it is relatively
uncontroversial that the activities of the Long Parliament made subsequent reforms possible (Pincus,
2009).
2
Electronic copy available at: http://ssrn.com/abstract=934943
how a novel, broad and ultimately successful coalition in favor of representative government was formed in seventeenth century England– has been a focus of much debate
ever since (Hobbes, 1682, Hayek, 1960, Moore, 1966, Acemoglu, Johnson and Robinson, 2005b). Contemporary explanations for England’s revolutionary reforms include the
Protestant ethic, the emergence of a commercial “middle” class seeking to protect its new
wealth or a coalition formed to defend property rights in response to excessive executive
greed (North and Weingast, 1989, World Bank, 2002, Acemoglu, Johnson and Robinson,
2005b, Rajan and Zingales, 2003, de Lara, Greif and Jha, 2008, Murrell, 2009).
This paper provides the first direct evidence on the importance of different endowments on individuals’ decisions to join the coalition in favor of Parliamentary control
of government during the English Civil War. It uses a novel micro-dataset collected by
the author on the economic and social endowments of each of the 548 members of the
Long Parliament (1640-1660) that initiated England’s revolutionary reforms, and finds
that a range of domestic wealth endowments show little effect on support or opposition to Parliamentary takeover of executive authority. This suggests that constituencies
formed around the defence of existing domestic property, whether old or newly acquired,
do not appear to have played a major role in the initiation of England’s transition to
representative government.
Instead, the paper documents that, consistent with a simple theoretical framework,
support for Parliamentary control of government was most impacted by those areas over
which the executive had greater discretion under the existing constitution, and thus were
most likely to change with a change in regime. These included the Crown’s “sovereignty”
rights over foreign policy, overseas trade and colonies, which governed the return on new
opportunities for wealth that accompanied the discoveries of direct sea routes to the New
World and Asia.
Further, the paper shows that a financial innovation–the introduction of shares in
new overseas joint stock companies– played a significant role in transforming fragmented
interests into a broad coalition. The paper finds evidence of an alignment effect– that
shares, while having little effect on those with existing mercantile endowments, had a
robust influence on the propensity to support constitutional reform among non-merchants
(who were mainly sedentary landowners). In fact, shares appear to have been pivotal in
swaying non-merchants in favor of reform, changing support for Parliamentary control of
government from a minority position to one enjoying majority support. Non-merchant
shareholders encompass a number of the central organizers of the Parliamentary rebellion,
who far from being extremists, would have been slightly more likely to support the Crown
had they not invested in overseas ventures.
3
Electronic copy available at: http://ssrn.com/abstract=934943
The paper uses two complementary means to assess the causal effect of shares. First,
the paper compares shareholders to non-investors matched along a rich range of those
endowed characteristics that might plausibly lead to departures from the mean-variance
efficient financial portfolio where every agent invests in shares (Markowitz, 1959). The
paper finds that even under a lower bound estimate, the effect of shares was sufficient
to push the support of the majority of MPs from Crown to Parliament. The second
approach exploits a plausibly exogenous shock to the propensity to invest overseas: the
spike in nationwide enthusiasm for foreign expeditions among agents who became free to
control their finances just after Francis Drake’s successful circumnavigation and raid on
Spain’s silver fleet. This regression discontinuity design also shows consistent increases
in the propensity to support parliamentary control of government among shareholders.
Beyond the stark choice to support Crown or parliamentary control of government
during the violence of the Civil War, the paper traces a direct link between overseas
shareownership and support for constitutional reform throughout the lifecycle of the
early struggle for parliamentary supremacy, exploiting surviving records that indicate
support for reform during the initial attempts to change the constitution through legislative means, at the eve of the outbreak of violent hostilities, and in the parliament
of post-Civil War victors that implemented dramatic investments in England’s navy in
defence of trade. A consistent picture emerges: the introduction of shares appears to
lead non-merchants to make similar political decisions to those with prior overseas trade
interests, creating a majority coalition that favored revolutionary reform.
The paper interprets these results as reflecting the role played by shares in aligning
the interests of sedentary non-merchants, who otherwise had few opportunities to invest
overseas, with merchants, who already had access to such opportunities, in favor of constitutional reforms to acquire the Crown’s newly valuable overseas rights. Because the
rights needed to profit from overseas investment belonged to the executive, the introduction of shares aligned the incentives of a broad coalition in favor of constitutional reforms
aimed at seizing control of these rights. These rights were then used to increase England’s
public investments in favor of policies, such as an expanding Navy, that enhanced the
value of overseas investments and placed England at the center of world trade.
Beyond shedding light on a pivotal moment in England’s political and economic development, this paper relates to a number of important literatures in finance, institutional
and development economics. Much blame for under-development around the world has
been attributed to a failure to align the incentives of disparate interest groups or “constituencies” in favor of political reform and beneficial public policies such as the reduction
of barriers to entry in education, accessing credit and engaging in trade (Benmelech and
4
Moskowitz, forthcoming, Rajan, forthcoming). A growing body of evidence suggests
that societies with different pre-existing ethnic and social interests are more prone to
civil conflict, provide fewer public goods and suffer diminished growth trajectories (e.g.
Alesina, Baqir and Easterly, 1999, Alesina and La Ferrara, 2005). An important “political
economy” tradition has emerged that emphasizes the role played by disparate economic
constituencies in impeding development and instead harnessing institutional reforms and
regulations to create barriers to entry and protect rents (e.g. Benmelech and Moskowitz,
forthcoming, Haber and Perotti, 2010, Rajan and Ramcharan, 2008, Perotti and von
Thadden, 2006, Acemoglu, Johnson and Robinson, 2005a).
Looking within one country does not allow the relative importance of England’s preexisting institutions to be assessed, however the use of detailed individual data does
permit measurement of the relative importance of different constituencies in a process of
institutional change that proved crucial for England’s development. Unlike a number of
papers in this literature, where interests form around differences in wealth, and shocks to
existing wealth provide the impetus for change, this paper argues that an important role
appears to have been played by shocks to future opportunities for wealth, in combination
with financial mechanisms that allowed disparate groups to share in those opportunities,
in building coalitions for reform. With the introduction of financial mechanisms to share
in future opportunities for growth and wealth potentially much easier to influence through
policy than attempting to reshape long-lived institutions driven by historical accidents or
existing distributions of wealth and capital, the paper provides a more hopeful message
for policymakers than many existing lessons drawn from England’s experience.
This paper also relates to an important literature on privatization.3 The potential
role that can be played by financial instruments in creating broad constituencies in favor of private property rights has found significant resonance in theoretical and policy
circles, most notably motivating voucher privatization in the post-transition Czech Republic and in Russia (Boycko, Shleifer and Vishny, 1994). These theories are backed by
some evidence that underpricing of privatized assets is used by right-wing governments to
consolidate domestic support in favor of lower taxation (Biais and Perotti, 2002, Jones,
Megginson, Nash and Netter, 1999) and that allocating shares may shift political allegiances in favor of less redistribution (e.g. Duca and Saving, 2008, Kaustia and Torstila,
2008). This paper complements this work by examining an environment where the introduction of shares created access to new opportunities for future wealth, rather than
implying an increase in individuals’ current assets. In England, the introduction of shares
appears to have actually led to support for higher taxation, funding policies, such as the
3
Megginson and Netter (2001) and Haber and Perotti (2010) provide useful overviews.
5
expansion of the Navy, that favored these new investment opportunities.4
Similarly, this paper builds upon an important literature on the role of news and
attention in mitigating the extent of the “stockholding puzzle”– deviations in individuals’
investments from the optimal market portfolio, which should include shares (e.g. Guiso
and Jappelli, 2005, Barber and Odean, 2006). In common with the mature stockmarkets
that are the main focus of this literature, the paper finds that in a nascent market, a
“news” shock common to elites generated significant increases in share ownership that
in turn led to the strengthening of representative political institutions.
The paper also contributes to a prominent debate, beginning with La Porta, Lopez-de
Silanes, Shleifer and Vishny (1998), on whether countries with common law legal origins
enjoy better investor protections that encourage diffuse corporate ownership (Haber and
Perotti, 2010). This paper documents that in England, the originating nation of the
common law tradition, the causal relationship went in the opposite direction: the diffusion
of share ownership encouraged both constitutional reform and improved legal protections
for investors. The potential positive feedback seen in England between diffuse corporate
ownership, representative government and legal protections suggests an answer to why
nations that transplant only one of these institutions, such as the common law, often
develop along very different trajectories.
Section 2 provides a brief background and a simple theoretical framework to understand the relation between endowments and choices that motivates the empirical
methodology. Section 3 introduces the new micro dataset on each member of Parliament
collected for this study (with further details in a Data Appendix). Section 4 presents the
results and Section 5 concludes. A detailed Historical Appendix draws on new statistical
evidence to document the relevant historical and constitutional context.
2
Background and empirical strategy
The English Civil War began as a struggle between the monarch and members of the Long
Parliament over the “prerogative”: the rights of the executive (see Historical Appendix
for details). As a major turning point in the political development of England and of
parliamentary supremacy in government, the lessons of the English Civil War have been
debated by many of the most prominent political economists ever since. For Karl Marx
and his intellectual successors, England’s Civil War was the “First Bourgeois Revolution”
4
Effective taxation in fact rose considerably after the Civil War and Glorious Revolution. This
difference is consistent with agents funding increased military action in support of their new interests
overseas, rather than a broad attempt to limit redistribution, as one might expect if a coalition of
wealthholders was driving institutional change (Brewer, 1989).
6
and as such an inspiration for revolutions in France and beyond (Stone, 1985).5 Among
modern economists, the seminal contribution of North and Weingast (1989) argues that
the Civil War and the Glorious Revolution of 1688 took place to protect the existing
wealth and property rights of property owners who were faced by the unusual avarice
of Stuart monarchs. The successful removal of kings in both cases yielded a credible
threat that then allowed future rulers to commit not to expropriate property, leading
to dramatic financial and fiscal development in England. Alternative interpretations by
Rajan and Zingales (2003) and Acemoglu, Johnson and Robinson (2005b) also stress
the importance of property rights, contending that the struggle was instigated by newlyenriched groups, whether a newly commercialized gentry in the former case, or merchants
who had benefited from the rise in Atlantic trade in the latter.6
In all three modern interpretations, a constituency of wealth holders emerged for
institutional reform that was able to obtain improved protection of domestic wealth
and property rights, leading both to representative government and to economic growth.
However, these theories have proven difficult thusfar to reconcile with a body of indirect
empirical evidence that suggests that domestic property rights were already relatively
secure in seventeenth century England, at least for the wealthy, and did not experience
much change thereafter. For example, Clark (1996) finds no appreciable reduction on
the interest rates on land due to the Glorious Revolution, as might be expected with
a lower risk of expropriation. In fact, he shows that property rights over freehold land
had been relatively strong throughout the seventeenth century. Similarly, examining the
lending history of a London financier, Quinn (2001) fails to find a fall in interest rates
on private capital over this period. Sussman and Yafeh (2002) reveal that the interest
rates on government debt responded more to Dutch capital markets and England’s wars
than to any reduced political risk from the Glorious Revolution.7
Since the central contest in the Civil War was between King and Parliament, theories
5
On the role of the English Revolution on inspiring the French, see Pincus (2009). A prominent
alternative to the Marxian view, associated chiefly with Whig historians, sees England’s revolution in
the seventeenth century as being a response to challenges to liberty and property rights by an increasingly
absolutist executive rather than about class struggle (Macaulay, 1898). A third “Revisionist” perspective
has pointed to particular episodes of amity between King and Parliament in the years leading up to the
Civil War to challenge the notion of broad economic or political struggle, and instead revives old views
that religious differences, such as Protestant ideology, were central in what was once called the “Puritan
Revolution” (Gardiner, 1883, Morrill, 1993).
6
The hypothesis that newly commercialized rural landowners were the major supporters of reform
finds resonance with interpretations by Barrington Moore (1966) and Tawney (1941). See also Brenner
(1993), who emphasizes the role of new merchants.
7
See also de Lara et al. (2008) and Murrell (2009). These effects may not have been uniform,
however. Once Parliament consolidated its control, charters for England’s transport infrastructure and
organization became more secure (Bogart, 2009).
7
about the identity, motivation or organization of groups responsible for England’s constitutional development should find validation in the observable history of who supported
and opposed the monarchy among England’s elected representatives. A particularly valuable feature of using these data is that the political allegiances of virtually all members
were publicly revealed by their actions during the Civil War. Parliamentary fence-sitters
on the eve of the Civil War were forced to choose between accepting the conflicting summons of the King to Oxford and of Parliament to Westminster. By 1644, every living
parliamentarian could be associated with one side or another (Brunton and Pennington,
1954) (see also Data Appendix).8
2.1
A simple theoretical framework
A simple theoretical framework can shed light on how to interpret the relationship between endowments, property rights and political choices. Suppose that the expected
utility for a member of parliament (MP) can be summarized by the following additive
relationship:
X
Ui =
βj xij + ur
(1)
j
where xij are predetermined individual endowments, βj represent the rates of return to
xij and ur contains other orthogonal factors that influence expected utility in a state of
the world r. Suppose that the support of an individual agent increases the chances of
victory by an amount s > 0. Suppose that each agent believes that with probability µ,
Parliament (P) will win the struggle against Royal authority (R).9 Let βz , z ∈ {P, R}
denote the rate of return on endowment j in the state of the world where either the
monarchy (R) or Parliament (P) won. Then the agent’s problem is to choose to support
8
The well-documented allegiances of Parliamentarians differs from other public figures. The loyalties
of local leaders were confounded by both local power politics and the presence of occupying armies. Even
London, often seen as the epicenter of Parliamentary power, initially had a strong Royalist presence
among its leadership, including a Royalist Lord Mayor.
9
Naturally, we expect µ to be affected by other agents’ choices. For plausible specifications of the
multi-agent game, we would expect multiple values of µ to be consistent with equilibrium. However, as
shown below, the specific realisation of µ is irrelevant for an agent’s decision, as long as µ ± s is interior.
This condition: that there is some uncertainty about whether Parliament or monarchy wins regardless
of an individual agent’s choices– makes sense in the historical context.
8
parliamentary or monarchical control:
"
max
!
(µ + s)
X
z∈{P,R}
!
+ (1 − µ − s)
xij βj|P + uP
X
j
xij βj|R + uR ,
!
(µ − s)
X
,
j
xij βj|P + uP
!#
+ (1 − µ + s)
j
X
xij βj|R + uR ,
j
The optimal choice implies a cut-off strategy: an agent will choose to support Parliament
if the value from supporting Parliament exceeds that of supporting the monarchy. Subtracting the values above reveals that an agent will choose to support political reform
if:
!
X
s
xij [βj|P − βj|R ] + (uP − uR ) > 0
(2)
j
The inequality (2) establishes that, given the linear utility specification above, a
sufficient condition for an agent’s decision to support political reform to be invariant
to the agent’s exposure to any particular endowment xij is that βj|P = βj|R . In other
words, support for political reform will be unaffected by an endowment if the value of
that endowment is the same regardless of regime. This will occur when there are believed
to be secure property rights for that endowment.
Furthermore, in this formulation, the condition above is in fact also necessary for
irrelevance of an endowment if MPs believe that their choice will have a non-zero effect
on the outcome (s > 0). This condition lends itself to an empirical test: if s = 0, it
implies that all endowments are irrelevant at the same time, and thus a joint test of
the significance of all endowments should be zero. The regressions below are sufficiently
significant to reject this test.
The inequality (2) also implies that those endowments that play the biggest role in
determining an MP’s support or opposition to political reform will be those most subject
to change in value based on the identity of the regime. These are likely to be endowments
that fell within the “prerogative” rights of the king under the existing constitution–
including those linked to overseas opportunities, trade, religion and royal patronage (see
Historical Appendix). All of these could be expected to change with Parliament’s seizure
of control over these rights.
Inequality (2) further yields an implicit condition on the minimum uP − uR required
9
for support for Parliamentary control. The probability of supporting Parliament is:
!
P{P } = F
X
sxij [βj|P − βj|R ]
(3)
j
where F (·) is the cumulative density function of uP −uR . Assuming that uz are normal or
uniform, Equation (3) can be estimated using standard probit or OLS respectively. The
coefficients γj from such a regression identify γj = s(βj|P − βj|R ). Note that s cannot be
identified, but must be non-negative.10 Thus, the sign of expected changes in the value
of the endowment can be inferred by inspecting the coefficients, but marginal effects are
necessary to assess the relative magnitude of such changes.
2.2
Estimating the effect of shareholding
One class of assets that might sway an individual’s propensity for constitutional reform
are shares in overseas joint stock companies. Joint stock companies were introduced into
England in the late sixteenth century to take advantage of new opportunities in the New
World and Asia. Prior to the joint stock company, traders were organized in “regulatory
companies” that were similar to medieval merchant guilds. Merchants in regulatory
companies gained the freedom, often after long apprenticeships, to engage in a particular
trade on their own account or in small partnerships. In contrast, agents of a joint-stock
company traded on behalf of that firm, which had a unified management, and ownership–
and thus risk– distributed among its often numerous shareholders.11 Thus, for the first
time, joint stock companies enabled sedentary agents to take advantage of potentially
10
In this simple specification, s is assumed to be the same for each agent. In a more general specification, we could imagine that an agent’s effect on the outcome of political struggle is a function of his
endowments, and make s a function of Xij . As long as the effect of support does not depend on whether
the agent supports the royalists or parliament and is distributed independently conditional on Xij , this
generalisation would change the structural interpretation of the coefficients γj , but not effect the sign or
irrelevance conditions described above, and we can still make inference on the marginal effects.
11
A near-contemporary account describes the motivations behind the founding of the mysterie and
companie of the Merchants adventurers for the discoverie of regions, dominions, islands and places
unknown in 1552:
And whereas many things seemed necessary to bee regarded in this so hard and difficult a
matter, they first made choyse of certaine grave and wise persons in maner of a Senate or
companie, which should lay their heads together, and give their judgements and provide
things requisite and profitable for all occasions: by this companie it was thought expedient
that a certaine summe of money should publiquely bee collected to serve for the furnishing
of so many shippes. And lest any private man should bee too much oppressed or charged, a
course was taken, that every man willing to bee of the societie, should disburse the portion
of twentie and five pounds a piece: so that in a short time by this means the sume of six
thousand pounds being gathered, the three shippes were bought (Hakluyt, 1589)[pp.267].
10
highly lucrative overseas opportunities, without themselves specializing in navigation and
commerce. Shares therefore may have aligned the interests of a broad coalition in favor
of political reforms aimed at enhancing the value of overseas investments.
The empirical section will provide estimates of Equation (3) and, in particular, measure the effect of prior shareholding in overseas companies on support for political reform.
If, as is suggested by the historical record, investments overseas were highly subject to
executive discretion (see Historical Appendix), and these investments were also likely to
be encouraged under the new regime, then a relatively larger effect of shareholding on
the decision to support increased parliamentary control should be expected.
Equation (3) will be estimated under two sets of assumptions. First, if the selection of investors into investment in shares was uncorrelated with subsequent political
decisionmaking, estimates can be made of the average effect of shareholding on support
for political reform among shareholders. In fact, this condition would be satisfied in
the benchmark canonical model of portfolio choice (Markowitz, 1959, Sharpe, 1964): assuming that investors are aware of all assets, there are no transaction costs, and there
are no uninsurable risks (such as accumulated human capital), all agents seeking the
mean-variance efficient portfolio should choose to hold the market portfolio. The market
portfolio would include shares in joint stock companies, as soon as they are introduced.
Differences in risk preference will affect the allocation of assets between risky and nonrisky assets, but not the particular set of risky assets, such as shares in joint stock
companies (Guiso and Jappelli, 2005). Thus in a frictionless environment, there should
be no systematic selection bias among those who choose to invest in shares, and OLS will
provide unbiased estimates of the average effect of the introduction of shares on support
for parliamentary reform among investors.12
Relaxing the strong assumptions underlying the canonical model allows us to delineate the relevant channels through which selection biases may occur and motivates the
identification strategy. First, it is plausible, particularly in a nascent stockmarket environment, that even fully rational agents cannot invest in particular assets that they do
not know exist (Merton, 1987). If investors face fixed costs in gaining access to information about particular assets, or more generally, in purchasing them, there will be a
correlation between the possession of liquid assets, or wealth, and investment in stocks.13
This may also lead to local geographical concentrations among shareholders (Coval and
12
Furthermore, if investors’ utility functions obey constant absolute risk aversion, investors will invest
the same amount in stock. Even with constant relative risk aversion, asset shares will be independent of
wealth- the poor and rich will hold the same proportion of each asset, including stock, but in differing
amounts (Guiso and Jappelli, 2005).
13
Indeed, such a correlation appears empirically confirmed among modern US and European populations (Guiso, Haliassos and Jappelli, 2003).
11
Moskowitz, 1999, Zhu, 2002), motivating the inclusion of a rich set of controls for the
geographical constituency of the MP, including distance to London, already the major financial center, and fixed effects for each county. While shares were often divisible during
this period, so that a number of individuals could get together to buy a single share, liquidity constraints and fixed costs in acquiring information may also be an issue. However,
the rich historical and biographical records available for each MP allow the development
of a rich set of controls for wealth endowments. These include whether an agent was
the eldest son (and thus the heir, particularly important during this period during which
primogeniture was customary), whether the agent inherited land or manors and whether
the agent’s father had an aristocratic title, a baronetcy or a knighthood.
Differences in human capital endowments can present an important source of noninsurable risk. Prior to the introduction of shares in England, individuals seeking to invest
overseas had to join a regulatory company and trade on their own account or in small
partnerships. Those who possessed such human capital were naturally already exposed
to foreign opportunities, and risks from changes in Crown foreign policy. In contrast,
the introduction of shares allowed sedentary non-merchants to gain such exposure for
the first time. Thus to test whether shareholding aligned the incentives of disparate
groups, a comparison can be made of the effect for merchants and non-merchants. If
shareholding aligned incentives for non-merchants to support political reforms in order
to pursue overseas opportunities, then a greater effect of shareholding on reform for
non-traders should be expected than for those with mercantile backgrounds, who could
already invest overseas in the absence of shares.
3
Data
Surprisingly, despite the importance of this episode, this is, to the author’s best knowledge, the first paper to systematically gather, digitize and analyze the endowments and
political choices of the individual MPs who initiated England’s constitutional reforms.
As summarized in Table 1, these data were collected from a number of different
primary and secondary sources. First, biographies of each member of the Long Parliament, drawing in particular from compilations by Keeler (1954), Brunton and Pennington
(1954), the History of Parliament Trust (forthcoming) and the Dictionary of National
Biography, were used to construct a range of endowment measures, including inherited
wealth and rank and whether an individual was apprenticed into a merchant company.14
14
The House of Commons consisted of representatives of 249 constituencies including the chartered
boroughs, the 59 counties and the Universities of Oxford and Cambridge. The franchise was limited to
12
The Data Appendix includes an example of such an entry.
Each individual, and their father and father-in-law, were matched to the data on
trading interests from Rabb’s 1967 lists of all investors in overseas companies mentioned
in the founding charters, patent rolls and subsequent transfer books of the major overseas
trading companies founded in England between 1575 and 1630. In total, Rabb provides
names of 6,336 investors mentioned during this period.15 These investor lists were further
supplemented and extended to 1640, where possible, using biographical information and
the charters of the Saybrook and Providence Island companies.
A rich set of controls for other endowments that may have played a role in influencing
these political choices were also collected. For example, religion has played an important role in the historiography of the Civil War. A combination of two proxies can be
used to capture the effect of Puritanism. First, biographical data identifies individuals
who attended Puritan seminaries or colleges that had strong Puritan ties.16 An MP’s
education at such institutions may be interpreted as an indicator of Puritan preferences.
To capture religious preferences among those who did not attend such institutions, data
was gathered on active Puritan ministers and Catholic recusants in the area each MP
represented from diocesan records.17
Parliamentary constituencies were further matched to a rich set of geographical and
other historical data that capture the impact of royal and noble influence on particular
MPs, differences in the preferences of boroughs and counties, cities, towns and ports, as
well as other forms of regional preferences (see Data Appendix for further details).
4
Results
As the descriptive statistics in Table 2 reveal, shareholders constituted 21 percent of members of the Long Parliament, or 116 members. Of shareholders, 76 percent invested in
unprofitable companies, with 59 percent investing solely in unprofitable ventures. Shareholders had similar wealth endowments to non-shareholders, including similar proportions
of MPs who were heirs, inherited ties to the royal court, had fathers with titles or had
a relatively few affluent “burgesses” in towns and owners of freehold land worth 20 shillings a year in
the counties. Birth dates that were not known were imputed where possible from the individuals’ entry
into colleges, inns, completion of apprenticeships and dates of knighthoods.
15
Some uncertainties about identity faced by Rabb were resolved. Remaining uncertainties stem
mainly from common names–such as Thomas Smith– which should constitute pure measurement error.
See Rabb (1967, chp.3) and the Data Appendix for a detailed discussion of each company.
16
For example, Emmanuel College, Cambridge, was founded in 1584 in order to render “as many
possible fit for the administration of the Divine Word and Sacraments.” (Porter, 1958, pg. 238).
17
These were at the ancient diocese level (McGrath, 1967). To get estimates at the county level, a
uniform distribution of ministers and recusants per unit of area in a diocese was assumed.
13
inheritances of manors or any landed estate. MPs who had been educated in Puritan
colleges or seminaries do not seem to have been more likely to invest. Shareholders do
however differ in two salient dimensions. First, as expected, shareholder MPs came of
age on average eight years closer to the time of Drake’s voyages, which demonstrated
the potential profits and feasibility of direct English trade to the Indies. Second, 23 percent of shareholder MPs came from mercantile backgrounds, while those with mercantile
background represented 14 percent of the sample as a whole. As we shall demonstrate
however, the effect of shareholding is largest on those without existing mercantile backgrounds.
Despite the broad similarities between the endowments of shareholders and nonshareholders, there are large differences in their political decisions. Three in four shareholder MPs supported the expansion of Parliamentary control in the Civil War, compared
to around half of non-shareholders. Shareholder MPs also were more likely to support
Parliament against the Crown at other points in the lifecycle of the struggle for which
roll call evidence survives: they were around half as likely as non-shareholders to vote
against the conviction of the Charles’ chief advisor, the Earl of Strafford, in 1640, more
likely to offer a loan to defend Parliament in London at the beginning of the war in 1642,
and less likely to be purged for favoring compromise with the King, allowing them to sit
in the Rump Parliament.
The summary statistics also reveal important similarities and significant differences
between Royalists and supporters of parliamentary reform. First, virtually all measures
of endowed wealth appear similar both among both populations, suggesting that the Civil
War was not fought to protect domestic wealth. Secondly, supporters of reform appear
to disproportionately come from mercantile and Puritan backgrounds, and less likely
to possess inherited court connections. This is consistent with the model, as overseas
property, religion and court patronage were all areas under which the Crown had broad
discretion under the existing constitution and were most likely to change in value with a
change in regime (see Historical Appendix).
Figure 2 reveals that while the delegations from certain areas, most notably East
Anglia, seemed more inclined to support Parliament, there is also significant withincounty and constituency variation in support for reform among MPs, and there are
discernable differences in the geographical patterns of investment in shares and in support
for reform. This suggests that regional differences, while potentially important, are not a
complete explanation of the relationship between shares and support for reform (Figures 1
and 2).
Table 3 presents regression results on the propensity to invest in overseas shares
14
among MPs. Note that merchants, even with similar wealth endowments, were more
likely to invest. Further, there was an inter-generational persistence in propensity to
invest; these factors will be controlled for in all regressions. However, apart from some
non-robust evidence for a relative lack of investment among the children of nobles, a
range of measures of domestic wealth endowments appear to have little effect on an MP’s
propensity to hold shares. Religion too seems to have little effect across specifications.
Despite individual wealth endowments having little influence on shareholding, Table 3
suggests that the propensity to hold shares does appear to differ with the constituency
of the MP. MPs from more densely populated counties, from constituencies outside the
Crown lands and representing ports were more likely to invest, though the distance from
London appears to have little consistent effect. These results are consistent with the
literature on local biases of investors (Coval and Moskowitz, 1999, Zhu, 2002): that
shareholding occurred among groups more familiar with opportunities overseas, not just
in London, but across the country. A rich set of controls, including fixed effect specifications that compare MPs from the same county, will address this variation.
Table 4 presents regressions assessing the role of endowments and shares on the probability of support for Parliamentary control of government during the Civil War, sequentially adding controls for personal and constituency characteristics (columns 1-5),
omitting the county of Middlesex, which included London and its environs (column 6) and
comparing MPs representing constituencies within the same county (column 7). Share
ownership is associated with a twenty percentage point rise in the probability of support
for Parliament, an effect that is strongly significant and remarkably unchanged with the
addition of rich controls for wealth, religion and geographical features.
Consistent with the theoretical framework, the other individual endowments that
show strong effects on support or opposition to political reform are those over which
the executive wielded discretion before the Civil War: mercantile interests, religion and
inherited ties to court (Columns 1-7). Naturally, the value of inherited ties to the royal
court would be deeply affected with a change in regime and the table reveals consistent
evidence that those with such ties were more likely to support the Crown. Further, the
positive effects of the two proxies for Puritanism are also consistent with the theoretical
framework, since following the Reformation, the Crown possessed prerogative control
over the newly-formed Anglican Church.18
18
Recent accounts revive the view that the “Puritan Revolution” was motivated by religious differences,
seeing the Civil War as a skirmish in the broader Wars of Religion (Morrill, 1993). However, it is unlikely
that this provides a complete explanation. As the Grand Remonstrance, issued by Parliament on the
eve of hostilities, suggests, MPs favored a “profitable” war in the Spanish West Indies instead of direct
conflict with Catholic Spain. Religion was also seen as an effective propaganda tool. As the contemporary
lawyer and MP, John Selden, wrote:
15
In contrast, a range of measures of endowments of domestic wealth appear to have
little effect on support for reform, including the MP’s status as an heir or the inheritance
of a manorial estate, that would be a strong determinant of whether an MP was considered
a member of the “gentry”. Other wealth endowment measures appear to have no effect,
with one exception– that the sons of aristocrats were less likely to rebel. There is also
little evidence in these data to support the theory that MPs from families of newly
commercialized gentry who acquired land during and after the reign of the Tudors–
which spanned the dissolution of monasteries during the Reformation– were more likely
to support Parliamentary control as suggested by Tawney (1941),Moore (1966) and Rajan
and Zingales (2003). These results instead suggest that support for parliamentary control
of government was unaffected by endowments of new or old wealth, and thus that it is
unlikely the Civil War was fought primarily to defend domestic property.19
It could be that MPs’ support for Parliamentary control was shaped more by the
interests of their constituency than by their individual investments in shares. Indeed, it
may be that the effect of shareholding may be capturing the fact that shareholder MPs
were more likely to represent ports newly-enriched by Atlantic trade (Acemoglu et al.,
2005b). Another possibility is that the effect of shareholding is capturing the preferences of MPs who represented dense populated counties or regions, such as East Anglia,
that had different legacies of law and institutions from the medieval period that made
them more likely to support Parliamentary control (Fischer, 1989). However, adding a
range of controls for constituencies of representation has little effect on the coefficient of
shareholding, and there is no evidence that MPs representing towns or ports were more
likely to support Parliamentary control (Columns 2-7).20 Though MPs representing constituencies closer to London appear to be more likely to rebel, these MPs were not more
likely to invest in shares (Table 3). Even comparing MPs representing constituencies
from within each of the 52 historic counties in England and Wales does not appear to
diminish the effect of shareholding (Column 7).
Despite a rich set of wealth and geographical controls that address the main sources
the very Arcanum of pretending religion in all wars is that something may be found out in
which all men may have interest. In this the groom has as much interest as the lord. Were
it for land, one has one thousand acres and the other but one; he would not venture so far
as he that has a thousand. But religion is equal to both. Had all men land alike, then all
men would say they fought for land (Hill, 1961)[pg. 105].
19
It is interesting to note that, even though the lands of Royalists were confiscated during the hostilities,
the vast majority were able to regain their lands upon the payment of a “compounding” fine– a percentage
of a year’s income.
20
Controlling for measures of per capita county wealth gleaned from the Tudor lay subsidies (Sheail,
1998) also has no effect on the results, but contains gaps that significantly reduce the sample size (results
not shown).
16
of likely selection, there still might be an unobserved driver of shares, such as unobserved
wealth, that might impact both share ownership and the propensity to support Parliament. Following Altonji, Elder and Taber (2005), the bottom panel of Table 4 estimates
the potential bias due to selection under the assumption that the relationship between
shareownership and our rich set of controls is merely representative of the relationship
between shares and unobserved drivers of shareownership. Since the measures of wealth
and geographical factors were specifically gathered to reduce the bias on shares, the assumption that they are instead merely representative is likely to be weak, leading to a
lower bound estimate of the effect of shares. The estimated bias is significant at the 10%
level for the more parsimonious specifications, though becomes insignificant by adding
the large set of county fixed effects. Regardless, the implied lower bound on the effect of
shares appears to be quite stable: for the preferred specification with the richest control
set, including county fixed effects, the lower bound suggests that shareownership results
in a 12.5 percentage point increase in the probability of supporting Parliamentary control
of government. Further, the shift in shareownership due to unobservables would have to
be 2.5 times as great as the shift due to this richest control set to eliminate the effect of
shares, suggesting that at least part of this effect is real.21
Figure 3 provides a complementary approach to assessing the sensitivity of our results to selection bias, following Imbens (2003). The figure compares the partial correlations between the observed covariates, shareownership and support for Parliament,
relative to the thresholds necessary for an omitted binomial variable to reduce the effect of shareholding to insignificance at conventional levels. Consistent with Table 3 and
the robustness of the effect of shares across specifications in Table 4, the coefficient on
shareownership is largely insensitive to the inclusion or deletion of the wealth of included
observable covariates. The variables that are most correlated with shareholding are geographic constituency characteristics, such as population density and representation of a
port constituency which, however, show weak correlations with the propensity to support
Parliament. In fact, as the figure reveals, no observable covariate is sufficiently correlated
with either shareownership or support for Parliament to eliminate the effect of shares at
the conventional 5% significance level. Even at the more stringent 1% level, only the
positive correlation between shareholding and inherited court connections (which would
conversely imply stronger support for the Crown) is strong enough to have that effect.
Table 5 adds an interaction term between shareholding and mercantile endowments
21
These results are also consistent with that from nearest neighbor propensity score matching, with
estimated effects [and clustered bootstrapped standard errors] of shares on the propensity to support
Parliament among shareholders of 0.129 [0.084] and 0.217 [0.062], matching on personal and additionally
on constituency characteristics respectively.
17
to the specifications in Table 4. While the point estimates on shareholding show a
slight increase with the addition of this interaction term, there is also a robust, strongly
significant and offsetting negative interaction effect between shareholding and existing
mercantile interests. These results are consistent with an alignment effect: by providing
non-merchants with the opportunity to benefit from overseas trade and expansion, the
effect of shares on support for parliamentary control should be greater relative to those
with existing mercantile endowments, who already enjoyed such opportunities and a
relatively strong propensity to support Parliament.
Figure 4 illustrates this effect, plotting the distribution of predicted probabilities
by share investment and overseas trading interests. Notice that merchants who had
previously invested in overseas shares do not seem to be very different from merchants
who had not done so: both were later likely to support Parliament against the Crown.
However, while the median non-merchant was actually slightly more likely to support
the Crown in the absence of share investment, non-merchant shareholders reveal broad
support across the distribution for parliamentary control.
Even though there is no significant effect of a range of measures of domestic wealth
on support for political reform, it still might be the case that insecure domestic property
rights were crucial in the decisions of agents to support political reform and that the effect
of shareholding occurs not through the alignment of interests across groups in favor of
control over sovereignty rights, but rather due to a desire to protect newly acquired wealth
from investments in profitable overseas companies Acemoglu et al. (2005b). However the
accumulation of new wealth does not appear to be driving these results. Table 4(Panel
B) compares shareholders who only invested in companies that were unprofitable prior to
the Civil War to otherwise similar MPs. The effect of shares in unprofitable companies
appears to be actually slightly stronger, and once again the effect is mainly on those
without pre-existing mercantile interests. Though this result may appear somewhat
counter-intuitive, it is in fact consistent with the theoretical framework: those with
profitable overseas investments under the existing regime have something to lose (a −βj|R )
with constitutional change relative to those with non-performing investments under the
existing regime.
We can use the lower bound estimates of the effect of shares using the full set of
controls with county fixed effects in Table 4 and in Table 5 to perform a counterfactual
exercise. As discussed above, MPs were faced with the stark choice of supporting the
Crown or Parliament during the Civil War. Since this choice is symmetric– not making
a choice is not an option– those pushed over the 50% probability threshold of supporting
Parliament due to holding shares can be thought of as likely switchers of allegiance from
18
the Crown.
If we subtract the lower bound estimate of the effect of shares of a 12.5% increase
from the predicted probability that shareholders support Parliament, the median MP
had a probability of support for Parliament of 43.6%, and thus actually was more likely
to support the Crown rather than Parliament. In fact, a majority of 58.6% of MPs would
have been likely to support Crown authority. With the addition of the lower bound effect
of shares, the median MP had a 56.7% probability of supporting Parliamentary authority,
with an implied associated majority of 59.0% in favor of constitutional reform. While
such a majority would not of course have been a necessary condition for Parliamentary
reforms to take place, and these counterfactual exercises are at best suggestive, the extent
of these swings even assuming the lower bound effect of shares does indicate that shares
played an important, and likely pivotal, role in broadening the coalition for reform.
While the effect of shares does appear to generate a shift in the support of the median
MP towards Parliament, we can also extend our counterfactual exercise to examine the
extensive margin: those individual MPs that were likely to have been pushed over the
threshold towards support for constitutional reform due to shares. The number of those
pushed over the threshold ranges from 20 using the lower bound estimate to 29 (or 5.4%
of all MPs) using the conventional estimates derived from Table 4.
Table 6 further unpacks these figures by using the lower bound and conventional
estimates from Table 4 with the full set of controls and county fixed effects to isolate
the compliant switchers: shareholder MPs who ultimately supported Parliament but,
all else equal, were actually more likely to have supported the Crown in the absence of
shares. As the table suggests, the majority of these MPs appear to have otherwise lacked
mercantile interests. While a few were involved in the profitable new trading companies,
like the East India company and the Levant company, a large majority were invested in
unprofitable colonization projects, with shares bringing acres of land in the New World,
but whose charters and investments were subject to Crown appropriation (see Historical
Appendix). Close to half were also involved in companies, particularly the Providence
Island company, that made violent privateering incursions into profitable Spanish trade
routes in the West Indies.22
A remarkable feature of Table 6 is that despite looking at members who otherwise
would have supported the Crown in the absence of shares, the table contains three of
the famous “Five Members” that were identified by the King to be ringleaders of Par22
In fact, in 1643, the newssheet Mercuricus Civicus claimed that the struggle “was conceived (some
say) near Banbury and shaped in Gray’s Inn Lane, where the undertakers for the Island of Providence
did meet and plot it” (Kupperman, 1993)[pg.6]. Though an extreme interpretation, it is still indicative
of contemporary perceptions.
19
liament’s legislative challenges to his prerogative rights. The King’s illegal armed entry
into Parliament to arrest the Five for treason in January 1642, which later led to the
mobilization of the London militia in defense of Parliament, is often seen as a major step
towards the outbreak of violent conflict (Hexter, 1941, see also Historical Appendix). Of
the three MPs– Denzil Holles, John Pym and William Strode– John Pym in particular
is seen by historians as a major figure in initially organizing the coalition in favor of
Parliamentary control (Hill, 1961, Hexter, 1941).23 Yet even the lower bound estimates
suggest these leaders of the opposition might have actually favored support for the Crown
in the absence of shares. Instead of being radical extremists, it may be that the leaders
of the push for constitutional reform were instead effective at creating a coalition precisely because their interests were aligned with both sedentary landowners and overseas
traders. Shares may have played an important role in this.
Table 7 presents results using the same sets of controls to estimate the effect of
shares on other indicators of support for Parliamentary control of government over the
lifecycle of the struggle. The first panel provides evidence on the MP’s decision of the sole
legislative vote from the period on which individual roll calls survive: that of whether an
MP voted for or against the “attainder” of the King’s chief advisor, the Earl of Strafford,
in 1641.24 The second panel indicates support on the eve of hostilities, where evidence
exists of who subscribed to a loan for the defense of the London Parliament in 1642.25 The
third panel assesses whether the MP sat in the “Rump” Parliament of Civil War victors
that implemented many of England’s changes in foreign policy from 1648-53 (please see
Figure 8 and the Historical Appendix).
The broad picture that emerges is that at least as early as the peaceful legislative push
for reform in 1640-42, shareholders were consistently more likely than non-shareholders to
oppose executive authority. This continued across the lifecycle of the struggle. Further,
where merchants exhibit significant differences to non-merchants, shares appear to align
23
The remaining two of the Five were John Hampden and Arthur Haselrig, both proprietors of the
Saybrook Company, and apparently strongly connected to the Providence Island venture. Shareholding
does not however appear to be pivotal in shifting their support in these estimates. Another notable
name in the list is Oliver St John, John Hampden’s lawyer and Oliver Cromwell’s brother-in-law, who
played an key role in the Council of State under the Rump Parliament (See also Hillmann, 2008).
24
Unlike later in the seventeenth century, records of MP’s votes in Parliament were not systematically
kept, with one exception. In April 1641, Parliament voted to convict the King’s chief advisor and
architect of many of his policies, Thomas Wentworth, the Earl of Strafford. Those who voted against
the conviction were seen as supporters of royal authority and their names were anonymously posted in
Westminster Yard.
25
In June, 1642, claiming that the “King (seduced by wicked Counsel) intends to make War against
his Parliament”, the Long Parliament passed an ordinance soliciting a loan to “uphold the Power and
Privileges of Parliament”. Lists survive of the subscribers who were promised the return of their funds
with 8% interest, and that “no Man’s affection [to Parliament and its privileges] shall be measured by
the Proportion of his offer . . . ”, but rather by the act of participation (Firth and Rait, eds, 1911)[pg.6-9].
20
non-merchant choices with merchants. The fact that both non-merchant shareholders
and merchants were significantly more likely to sit in the Rump Parliament suggests a
direct link between the genesis of the coalition for reform and the subsequent dramatic
changes in England’s public investments in the Navy and its foreign policy that occurred
upon its success.
4.1
Drake’s voyage as an exogenous shock to investment
Next we consider the possibility that the OLS estimates, rather than being upper bounds,
are actually underestimates. This is due to the presence of a classic hold up problem–
with the Crown able (and as the Historical Appendix reveals, willing) to expropriate
the returns from overseas investments, some individuals may have been motivated by
the new access to overseas opportunities provided by shares to support reform, who also
faced incentives to wait until after the reform to actually invest. This would lead to a
downward bias in the measured effect. To assess whether this is the case, we can exploit
an arguably exogenous shock to information about the potential benefits from overseas
investments that resulted from Drake’s unlikely and remarkable feat of navigation.
In September 1580, the Pelican, the sole survivor of a fleet of five ships that had
sailed three years earlier, moored at Plymouth harbor in England.26 Her captain, Francis
Drake, had achieved an unlikely success– the circumnavigation of the world, direct trade
with the Spice Islands, and a raid on treasure ships in the Pacific that caught Spain
entirely unprepared. Drake’s voyage and the charts of ports, watering places and trade
routes that he constructed meant that for the first time English traders could break into
Portuguese and Spanish monopolies in Eastern trades (Andrews, 1967). Not only did
Drake’s voyage change the feasibility of English trade, it also amply demonstrated the
scale of profits to be had from trade and plunder. The details of Drake’s voyage, being
technically illegal, was kept a closely-guarded secret. This changed in 1585, when Drake
successfully raided Spanish ports in the Atlantic as well, demonstrating their vulnerability
to English attacks. Knighted by Elizabeth I, Drake’s extraordinary achievements made
him a national hero.27
Whereas previous English attempts for form joint stock ventures for overseas exploration, as late as Gilbert in 1583, had struggled to find outside financing (Williamson,
1946), suddenly a cohort of Englishmen and women were inspired by Drake’s voyages to
26
The Pelican later gained further fame under her new name: the Golden Hind.
The Spanish Ambassador, Bernardino de Mendoza, cautioned Philip II to destroy all English and
French ships that might enter the Pacific as: “. . . at present there is hardly an Englishman who is not
talking of undertaking the voyage, so encouraged are they by Drake’s return . . . everybody wants a share
in the [next] expedition. . . (Rabb, 1967)[pg.20]”
27
21
invest in endeavors overseas (Andrews, 1967).28 The effects were not confined to London.
As a clergyman in the West Country town of Exeter, Thomas Hooker, wrote in 1585,
Drake’s exploits:
inflamed the whole country with a desire to adventure unto the seas, in hope of
like success, [so] that a great number prepared ships, mariners and soldiers and
travelled every place where any profit might be had . . . (Andrews, 1964)[pg.4].
Research on the “stockholding puzzle” emphasizes a number of factors, beyond wealth,
that foster increased stockholding in contemporary stockmarkets. A common theme
is that individuals buy stock when they are paying attention. High profile events, or
stocks with extreme one day returns, attract new investors, both by advertising the stock
and by generating social feedback: individuals invest more if they know those around
them are investing as well (Hong, Kubik and Stein, 2004, Grullon, Kanatas and Weston,
2004, Guiso and Jappelli, 2005, Barber and Odean, 2006). Inexperienced investors are
particularly influenced by bursts of high returns (Greenwood and Nagel, 2006).
All of these features appear to parallel the nationwide enthusiasm that swept England
in 1585. There was a perception of extremely high returns to Drake’s voyages which were
ultimately high profile events that hit everyone at the same time (Andrews, 1967). This
may have created a “social effect”. Those coming of age in 1585, in particular, were
both inexperienced and free for the first time to deploy resources, thus more likely to be
paying attention to these new opportunities.
As Figure 5 reveals, Drake’s voyages did indeed act as a shock to the propensity
to invest in joint stock by the cohort of Long Parliament MPs who became adults at
this time. The effect diminishes almost monotonically among subsequent generations,
however, reflecting the failure of these ventures to make profits, due in large part to
Crown policy and predation (see Historical Appendix). Furthermore, as Figure 6 reveals,
other endowments, with one possible exception, show insignificant trends and do not
reveal significant jumps before and after 1585.29
Table 8 augments the regressions on the propensity to invest in shares to include
polynomial age controls, revealing a consistent zero direct effect of age on the propensity
to hold shares across specifications (Columns 1-5). However, consistent with Figure 5,
28
The women included Elizabeth I herself, who took her substantial proceeds from Drake’s voyage and
invested them in joint stock ventures rather than buying back Crown lands that she had been selling to
service debt.
29
That exception: that MPs who came of age after 1585 appear less likely to inherit land, would, if
anything be expected to result in a reduced incentive to support reform, if the property rights/ wealth
story is correct. Regardless, controls for these and other wealth endowments will be included in all
regression tables.
22
there is a jump in the propensity to invest among those that came of age after 1585, that
declines among those who came of age in the years thereafter (Columns 6-9). MPs that
came of age just after 1585 were around 30-45 percentage points more likely to invest in
shares compared to those who came of age just before.
We can use this jump in investment to compare support for political reform among
those investors who invested because they came of age just after Drake’s voyages and
otherwise would not have invested. This regression discontinuity is “fuzzy” as not everyone who came of age after this time deterministically invested, suggesting that two-stage
least squares estimates are appropriate. As the bottom panel of Table 8 reveals, the
instruments are robust and strongly jointly significant across a range of specifications.30
Table 9 presents regressions of our four different indicators of support for reform
on shares, both including quadratic controls for age (Cols 1-4) and implementing the
regression discontinuity design (Cols 5-9). First note that the quadratic controls for age
do not reveal an independent effect on any of our measures of support for reform. The
effect of shares is also robust to the inclusion of age controls. This suggests that age
effects are unlikely to be inducing the robust relationship we see between shareholding
and support for political reform.
Furthermore as the regression discontinuity results reveal, relative to those who came
of age just before Drake’s return, those who invested because they came of age just after
Drake’s voyage were, once again, more likely to support Parliamentary reform during the
Civil War and reveal consistent patterns across the early lifecycle of the struggle. As
the regression discontinuity depends on the relatively small number of MPs who came
of age prior to 1585 to identify a separate trend, some specifications are not precisely
estimated and the effects should be interpreted with caution. It is nevertheless reassuring
to find consistent point estimates across specifications, many of which are significant at
conventional levels.
It could be that those that came of age in 1585, instead of being motivated by nonperforming assets that they acquired overseas through shareholding were instead were
inspired by Drake to be ‘dreamers’ with strong tastes for risk that they managed to
maintain despite years of subsequent disappointment in the performance of their investments.31 However once again, the interaction effects suggest that the effects were mainly
30
We can also compare investment among those MPs from the cohorts most likely to be different:
those that came of age the same regime: comparing among Elizabethans, Stuarts, and those who came
of age under the “11 Years Tyranny” from 1629-1630 when no Parliament sat in England. The latter
cohort effect also allows us to assess whether increased shareholding came about due to attempts by
companies to “bribe” sitting MPs. However, the cohort effects are insignificant and do not substantively
effect the results (results not shown).
31
Such a possibility would run counter to work by Malmendier and Nagel (2007), who find that
23
on non-merchants, consistent with the role of shares in aligning interests, rather than
being reflective of a cohort-wide taste for risk.
4.2
Alternative channels
It is possible to implement further tests of the two key alternative channels– domestic
wealth and ideology– that have been mooted as explanations for the successful development of a coalition in favor of political reform in England. It could be, for example, that
our measures of endowed domestic wealth are simply not precise, and lack of precision,
rather than strength of property rights is responsible for a lack of an effect on support
for reform. Table 10 (Panel A) tests whether these endowment measures have any effect
on that subsample for which measures exist of an MP’s income at the time of the Civil
War. Though it appears that there are differences in contemporaneous income between
shareholders and non-shareholders, these are mainly due to merchant shareholders, and
the effect for non-merchants cease to be significant in the preferred specification with
full controls. There are also no discernable differences among shareholders who invested
because they came of age just after Drake’s voyages.
Further, Table 10 (Panel A) shows that inheritances of landed estates and titles are
all strong determinants of contemporaneous income. This suggests that our measures of
endowed wealth do capture important variation in contemporary income and it is not
imprecision that is leading to a lack of a domestic wealth effect.
A second possibility is that the effect of shareholding is capturing unobserved preexisting differences in political allegiances that led individuals to oppose the Court and
happened to also invest in shares. This “ideology” story would suggest that in the years
before the Civil War, anti-monarch shareholders would be also less likely to attend court
or work for the Crown. In contrast, if the theoretical framework above is correct, then
prior to the stark decision to support or oppose constitutional reform in the Long Parliament, individuals with endowments most subject to executive control, including shareholders, would paradoxically face a greater incentive to secure their property through
investing in client relations with the Royal court.
Table 10 (Panel B) examines the effect of shareholding on the acquisition of court
positions. Here the potential for endogeneity is significant: some courtiers may have
invested in joint stock since they had more access to royal charters and royal patronage,
or alternatively, the ruler may have attempted to buy off the most recalcitrant members
of his opposition. However, as the RD specifications suggest, shareholders who invested
investors weight more recent experiences more heavily.
24
overseas due to Drake’s voyages were more likely to acquire court positions, with a greater
effect for non-merchants than for those with existing trading interests. Thus, it appears
that shareholders did attempt to work within the existing constitutional system to secure overseas property: prior to the Long Parliament, shareholders were not consistently
opposed to the Court, and many assumed court roles.32 In contrast, there is no evidence that those endowed with greater domestic property cultivated more ties to court,
suggesting once again that domestic property rights were relatively secure.
5
Discussion
With English political institutions strongly influencing the institutional design of many
nations around the world, the question of how a novel, broad, and ultimately successful
coalition in favor of parliamentary supremacy in government emerged in England has
proved to be among the most enduring in political economy and institutional economics.
This paper provides the first direct evidence on the determinants of individuals’ decisions to join the coalition for revolutionary reform. The paper documents the contrast
between the relative lack of importance of domestic wealth and the significance of overseas interests in support for reform. By highlighting the empirical and constitutional
distinction between the relative security of domestic property rights and the executive’s
discretion over rights overseas, the paper reconciles theories that suggest that England’s
reforms were driven by those seeking to protect property (e.g. Acemoglu et al., 2005b,
Rajan and Zingales, 2003, North and Weingast, 1989) with a lack of evidence of change
in existing property rights in the seventeenth century (e.g. Murrell, 2009, Sussman and
Yafeh, 2002, Clark, 1996).
The paper also sheds new light on how a constituency in favor of parliamentary
supremacy was created. Through the innovative use of shares in joint stock companies,
access to new overseas opportunities expanded beyond traders to encompass other groups
with initially disparate interests. In fact, shares appear to have played an important,
likely pivotal, role in generating a parliamentary majority in favor of reform, as well as
shifting the allegiances of key members that provided leadership to the parliamentary
32
Indeed, the historical record suggests that a high degree of collegiality between monarch and parliament could exist when the monarch ceded prerogative control over foreign policy to Parliament, as
occurred in 1624 (Smith, 1999). Charles, in concert with parliament, explicitly tied parliamentary grants
of taxation to the declaration of war with Spain. In this session of Parliament, 35 statutes were passed
as opposed to only one in 1621. This anomaly is often cited by Revisionist historians as evidence against
broad socio-economic explanations for England’s revolution (e.g. Morrill, 1993). However, it is also
completely consistent with our framework.
25
coalition.33
Further, the role of shares in aligning incentives may have gained in importance following the war. The development of active stockmarkets that occurred between the
Civil War and Glorious Revolution (Neal and Quinn, 2001, Carlos, Key and Dupree,
1998, Carruthers, 1999) made it possible for both winners and losers of the Civil War
to reallocate their investments towards companies benefiting from England’s new regime
and assertive overseas policies, encouraging a consensus that favored the institutionalized control of national policies by parliament rather than the Crown (Carlos, Jha and
Peskowitz, 2010).34 The new “political parties” that emerged between the Civil War and
Glorious Revolution transcended old landowner-merchant distinctions, instead consolidating their memberships within joint stock companies and bargaining over the burdens
of state finance (Carruthers, 1999, Stasavage, 2003). It is likely that the emergence of
secondary financial markets weakened the link between different endowments and opposing interests, allowing a consolidation of England’s revolutionary reforms. Thus, rather
than becoming an limited oligarchy of Civil War victors, England could continue its path
towards broadly representative government and, ultimately, democracy.
Instead of yielding another example of wealth shocks generating a new political coalition, England’s experience suggests two tantalizing alternative lessons. First, broad support for institutional reforms was fostered by combining new opportunities for future
wealth with a financial mechanism to share that wealth. By allowing a broad range of
individuals to share in new opportunities overseas, financial innovation appears to have
aligned initially disparate interests, fostering majority support for reform. Second, there
appeared to have been a “political multiplier” effect to the development of financial markets. The development of markets to trade endowments that earlier shaped political
interests appears to have made politics less conflictual, consolidating reform. Financial
innovations appear to have been central in aligning disparate interests that led to one of
the first, and among the most enduring, traditions of representative government in the
world.
33
Joint-stock companies may have been key in organizing the coalition. Joint-stock companies were
governed by directors selected by a system of voting in proportion to the value of each investors’
shares (Scott, 1912). Large joint stock ventures, such as the Providence Island company, may have
facilitated the selection of opposition leaders. Similarly, the leaders of dissent in the early Stuart Parliaments include the Earl of Southampton and Sir Edwin Sandys, who were first brought together while
serving as directors of the Virginia and Bermuda companies (Rabb, 1998, Hill, 1961).
34
The post-Civil War history of the major joint stock companies–the East India company, the Royal
Africa company, the Bank of England and the South Sea company–is a history of companies issuing new
stock to accommodate new MPs in Parliament. See Scott (1912).
26
6
Historical Appendix
This section gives the contextual basis necessary to motivate the interpretation used in
the paper. As discussed above, joint-stock companies were introduced into England in
the late 16th century to take advantage of new opportunities for trade with the New
World and Asia. This section tabulates why joint-stock ventures failed prior to the
Civil War, emphasizing the role in these failures of the monarch’s constitutional control
over overseas investments. The section highlights the monarch’s relative lack of discretion
over domestic property and contrasts this with evidence that the executive was exploiting
these overseas rights to increasingly live without parliamentary oversight. The section
describes attempts by a broad coalition to wrest control of the monarch’s overseas rights,
first through parliamentary means and ultimately through Civil War. Finally the section
describes the constitutional changes that occurred, and documents the massive increase
in overseas public investments in the Royal Navy that supported England’s subsequent
expansion and growth.
Though the potential profits to be had overseas were large, English investors overseas
faced two key problems that meant that virtually none of the joint-stock companies made
profits prior to the English Civil War. Table 11 summarizes the position of the major
English joint-stock companies on the eve of the Long Parliament (1640). As the table
suggests, the first problem was that the Spanish and Portuguese, and later the Dutch,
had organized national defences of their lucrative monopolies over Atlantic and East
Asian trade and violently resisted English entry. English merchants were forced to trade
with the New World, indirectly, through Spain and Portugal. Without a more aggressive foreign policy providing support for those seeking to break Spanish and Portuguese
monopolies overseas, London was unlikely to emerge as anything more than a regional
center of trade and commerce.
The second problem was that the right to declare war and, in fact all rights to overseas
commerce and territory were owned by the King. Unlike domestic property rights, which
were governed by the common law, and were relatively secure from Crown expropriation,
foreign trade in early modern England was governed by civil law, administered by the
Crown in the Admiralty courts.35 Prior to the Civil War, English rulers also had the right
to revise customs rates and “impose” customs upon newly-introduced goods, as commerce
was believed to be protected and maintained by the king’s foreign policy (Gras, 1912).36
35
Domestic property rights were governed by the common law, a set of precedents that put limits on
the Crown’s ability to influence domestic judicial decisions (Burgess, 1992). Along with access to a jury
of their peers, wealth holders were themselves responsible for local enforcement and for collecting taxes.
They often refused to cooperate with the Crown bureaucracy. Compared to other contemporary states,
the monarch’s ability to expropriate wealth through courts or via taxation in early Stuart England was
remarkably light. There was flagrant tax-evasion, particularly in response to policies wealth-holders did
not support. As Sir Walter Raleigh admitted in 1601: “our estates that be £30 or £40 in the Queen’s
books are not the hundredth part of our wealth.” (Smith, 1999).
36
As the judge, Sir Henry Yelverton is noted as stating in parliament in 1610 (precedents from previous
parliaments that he referred to are in parentheses):
Impositions may be layd upon merchant strangers (13 E 4). But the merchants of England
trade not by the comon lawe of the land, but by the lawe of nations . . .
We are where the common lawe cannot judge. The merchant hathe no remedy agaynst hym
27
Though limited by both legal institutions and parliament in his ability to expropriate
wealth within the country, the king’s prerogative was firmly established beyond England’s
coasts.37
Sovereignty rights over war, colonies and customs enabled the Stuart kings, James I
and Charles I, to extract much of the residual gains from England’s emerging commerce
overseas. As Table 11 suggests, those joint stock companies that were not targeted by
foreign attacks and enjoyed temporary profits soon lost these profit sources through the
assertion of the Crowns’ sovereignty rights–either through rising customs charges or the
revocation of their charters.38 Shareholders in these companies were left with claims on
hundreds of acres of undeveloped territory overseas with the potential to be valuable in
the future.39
In contrast, as Figure 7 reveals, overseas customs revenue accruing to the Crown rose
from insignificance to providing the majority of Crown revenues on the eve of the Civil
War. In fact, the combination of a peaceful foreign policy and the accompanying rise
in customs revenue from England’s indirect trade with the New World through Spanish
and Portuguese ports were allowing the king increasingly to live independent of Parliament. Both James I (1603-25) and Charles I (1625-1648) succeeded in living without
Parliamentary subsidy for 11-year periods (Smith, 1999). Customs revenue meant that
England’s kings, though still relatively poor and weak in their ability to extract resources
domestically, were becoming increasingly enriched over time.40
that spoyles at sea. He is not under the protection of the lawe, thoe under the protection
of the King . . . He is under the jurisdiction of the King by the lawe of nations, (6 R 2),
Protection. (Gardiner, ed, 1862)[pg.87]
37
Overseas rights also included control over innovation. At this time, most technical progress was
occurring outside England, particularly in the more advanced centers of France, the United Provinces
and Venice (Rapp, 1975). Thus introduction of “new industries”, such as cannon-founding, sugarrefining, soap and papermaking, into England was considered a component of foreign policy, and the
king had the prerogative right to assign monopoly patents and thus derive revenues in lieu of what
he might have received in customs. An important example of the king’s prerogative role in industry is
Alderman Cockayne’s Project- an attempt by James I in 1614 to dye and dress English cloth domestically.
At this time, such “finishing” was being done in Holland. The Cockayne project collapsed when the
Dutch responded by embargoing English traders- another instance where foreign policy was critical for
economic development in this period.
38
Not surprisingly, then, the probate records of individuals’ estates reveal no discernable evidence that
the wealth of the business community in England rose in any part of the distribution until the trade
boom of the 1660s, after the Civil War (Grassby, 1970).
39
A typical offer showing the overseas assets that accompanied shares comes from a solicitation for
the Newfoundland company (Whitbourne, 1622):
And whosoeuer will aduenture £200, may not only haue a whole Harbour, Bay, or Road to
himselfe in fee for euer, and foure thousand acres of land, and woods thereunto adioyning
on the North side of Trinity Bay; but also a conuenient place, and ground to build Stages
and houses, and for drying of fish fit for a Ships fishing voyage of 160 . . .
And whosoeuer shall aduenture lesse then £100 be it £80, £60, £50, £30 or £20 shall haue
lesse proportionably . . .
40
That the monarch was the major beneficiary of expanded overseas trade, and no measurable rise in
mercantile wealth occurred until after the Civil War suggests that the process of enrichment of Atlantic
traders suggested by Acemoglu et al. (2005b), while potentially playing a role in creating a constituency
28
Attempts to bargain over the control over rights over customs and foreign policy
played a pivotal role in Parliamentary debates from 1603 to 1625 (Ashton, 1967, Rabb,
1998). These culminated in the “Great Contract” of 1611, an attempt to exchange the
king’s authority over independent means of revenue in exchange for assured parliamentary
grants of direct taxes. Bargaining foundered, however, chiefly because parliament wanted
control over customs, and the king was counselled not to surrender “the fairest flowers
for profit and command in all his garland (Hill, 1961).”
Though his resources were growing, a simultaneous shock due to invasion by the
Scots and rebellion by the Irish was sufficient to overwhelm the king’s finances and, in a
position of weakness, he was forced to summon the Long Parliament of 1640. Members
of the Long Parliament, in different subsets, sat as England’s representatives for the next
20 years. During this time, England underwent a dramatic institutional transformation.
The institutional changes of the Long Parliament began before the Civil War, through
the passage of Acts of Parliament that bore the signature of the King. These included
passage of the Triennal Act in 1641, guaranteeing that parliament must be called at
least every three years and could not be dismissed without its own consent. The royal
prerogative courts were also abolished and Parliament passed bills that deposed the king’s
chief councillors, such as the Earl of Strafford and Archbishop Laud, and sought control
over future appointments.
Further attempts to institute parliamentary authority over remaining Crown rights,
including over foreign policy, finance and the armed forces led the king to illegally enter the House of Commons to arrest “Five Members” considered the ringleaders of the
Parliamentary opposition in January 1942. Parliament summoned the London Trained
Bands in its defense, leading the King to abandon the city and later that year to raise
his war banner in defense of his prerogative.41
In combination with other financial reforms, Parliamentary control of the customs
revenue flowing through London enabled it to out-spend the king during the Civil War
and played a crucial role in bringing about a parliamentary victory by 1648 (Rodger,
2004). As Figure 8(a) suggests, during and after this period, England began a remarkable naval buildup. As Figure 8(b) shows, at the end of the Civil War, the Royal Navy
was unremarkable relative to its rivals. However, in 1648, England’s new rulers–the
“Rump” Parliament of victors of the Civil War–immediately embarked upon a series of
foreign policy initiatives designed to wrest control of overseas commerce. These initiatives, including the Navigation Acts and wars with the Dutch and Spanish, paved the
way for a boom in English overseas trade that began in the 1660s (Davis, 1973). By
the end of the seventeenth century, England’s position as the pre-eminent naval power
of Europe, which it would maintain for the next two centuries, was assured.
for reform during the Glorious Revolution, is unlikely to have played that role in the Civil War.
41
As Charles I himself later provides as his reason for going to war:
For although I can be content to eclipse my own beams to satisfy their fears . . . yet I
will never consent to put out the sun of sovereignty to all posterity and succeeding kings,
whose just recovery of their rights from unjust usurpations and extortions shall never be
prejudiced or obstructed by any act of mine . . . (Charles I and Gauden, 1649)[pp.48-49]
This description appears to match the condition for the failure of the Political Coase Theorem outlined
by Fearon (1996).
29
The constitution of England also began a period of experimentation that led to increased parliamentary control. Rule by the Rump Parliament was followed by a constitutional protectorate under Cromwell, that fell into crisis amid competing military factions
at his death.42 Ultimately the Long Parliament was reconvened, inviting Charles II back
to England in 1660 as long as all laws passed by the Long Parliament prior to the Civil
War (i.e. that bore Charles I’s signature) would remain in force. Since these implied that
Parliament controlled the state finances, Crown policies disagreeable to Parliament, such
as the Treaty of Dover with France, had to be conducted in secret and lacked credibility.
Thus foreign policy remained consistent following the Restoration, with re-affirmation
of the Navigation Acts and continued commercial wars with the Dutch. Intermittent
attempts by the monarch to reassert independent authority continued until Parliament’s
increased executive control was clarified and made explicit following the Glorious Revolution of 1688. By 1714, George I of Hanover, 57th in line to the throne and lacking
a working knowledge of English, was anointed more by the Settlement Act, enacted by
Parliament in 1701, than by God.
By 1714, Britain had already begun to assume the role of market hub for a trading
empire spanning the world. Amsterdam, the hub of Atlantic trade through much of
the late seventeenth century, was already being reduced to re-exporting goods entering
British ports (Ormrod, 2003, O’Brien, 1988). While the empires of Spain and Portugal
entered long-term decline, in part due to British predation, and France was heading
toward increased executive control, Britain was on a trajectory toward a commercial and
colonial empire abroad and the makings of liberal democracy at home.
7
Data Appendix
An advantage of examining the Long Parliament is that its members were deemed historically important enough that over the centuries, a series of pushes have been made to
gather the original sources that document the lives of individual members. Thus, the lives
of members of the Long Parliament have been remarkably well-documented in biographical sources. This study in particular simply uses the classification as Royalist or “Rebel”
of Brunton and Pennington (1954), who based their decision to classify a member as a
Royalist based upon a series of factors, chiefly attendance at the King’s Oxford Parliament, disablement as a Royalist from the Westminster Parliament and Royalist fines. In
the absence of the rich data compiled here, nor the use of contemporary econometrics,
the work of Brunton and Pennington however found no systematic economic or social
differences between Royalists and Parliamentarians, a result that may have dissuaded
systematic follow up until now.
This paper combined the classification used by Brunton and Pennington with the
contemporary biographies that were compiled by Mary Frear Keeler (Keeler, 1954). Here
is a typical entry from the 548 members of the Long Parliament, Keeler documents:
42
In fact, both US and English versions of the Bill Rights were heavily influenced by England’s first
written constitution, the Instrument of Government of 1653, that governed the early Protectorate.
The Cromwellian Protectorate too continued the expansionist foreign policies of the Rump Parliament,
engaging in a “Western Design” against the Spanish West Indies that seized Jamaica, and providing a
permanent charter to the East India Company (Howat, 1974).
30
Piers Edgcombe (1609-1667) of Mount Edgcombe, Cornwall, near Plymouth,
was a member for Camelford 1640-22 January 1644. He was the head of
an ancient and distinguished house. His grandfather, Piers (1536-1607), son
of Richard Edgcombe, had been sheriff and M.P. and been interested in Sir
Richard Grenville’s projects for exploring the distant seas and in developing
the mines of western Britain and Ireland. Sir Richard Edgcombe (d. 1639),
father of the MP, was a member of the Council for New England, a JP, a
sheriff and DL in Cornwall, MP for Grampound and Bossiney. He was one of
the royalists who supported the cause of Buckingham against the attacks of
Eliot’s faction in the early years of King Charles. Piers, the eldest son of Sir
Richard by his second wife, Mary, daughter of Sir Thomas Coteeles of London,
was aged eleven in 1620. He studied at St. John’s, Cambridge, matriculating
in 1626, and was probably the “Perseus Esgaimb” who was admitted to study
at Leyden University in June 1629. In the preceding year, while still under
age, he was successful among five candidates at the parliamentary election at
Newport, Cornwall. In 1636 he married Mary, daughter of John Glanville of
Broad Hinton, Wilts, receiving with her a portion of £3000, and three years
later succeeded to the Edgcombe estate. He had some responsibilities for the
defenses of Plymouth in 1639.
In 1640 Edgcombe was elected in the Spring and the fall as MP for Camelford.
He voted against the attainder of Strafford, and absented himself at the outbreak of hostilities. The House ordered that he be brought up in custody in
November 1642, but did not vote for his disablement until 1644. After fighting
for the king, he surrendered his command and in 1647 arranged to compound
for his estates. He served again in parliament after the Restoration, and died
on 6 January 1666/7. Edgcombe’s will, dated 12 May 1666, was proved 14
May 1667. His epitaph describes him as “a pattern to posterity, and an honour to an age he lived in; a master of languages and sciences, a lover of the
king and church, which he endeavoured to support to the utmost of his power
and fortune.”
Of Edgcombe’s fortune there are numerous evidences. Carew commented on
the excellence of his mansion at Mount Edgcombe. His father’s properties at
the time of his death included thirteen manors and other holdings in Devon
and Cornwall. Piers owned furthermore some Hampshire properties inherited
from his mother’s family, and he bought a Sussex manor in 1641. His compounding papers reveal a yearly income of over £1200, but it may have been
nearer £2000 and one observer reported it to be £3000. His fine, set first at a
tenth, £2513, was afterwards changed because of an undervaluation and also
because of the intercession of Lord Fairfax on his behalf. Edgcombe planned
a portion of £5000 for his eldest daughter when he made his will in 1666.
Piers Edgcombe was a brother of Richard Edgcombe, a brother-in-law of
William Glanville and a relative through his grandmother of Alexander Luttrell, all fellow parliament men of 1640.” (pg 163-164)
For each entry of this kind, I merged this data with that of Brunton and Penning31
ton1954, who classified Piers as both a Royalist and a Straffordian (one who both voted
and was present during the attainder of Thomas Wentworth, the Earl of Strafford in
1640). Pier’s claim to be of ancient family (and thus bearing a coat of arms prior to the
reign of the Tudors- a check of the “emergent gentry” hypothesis of Rajan and Zingales
(2003), Moore (1966) and Tawney (1941)) can be checked using Debrett’s and Burke’s
Peerage, as well as by checking the entries for his parents and grandparents using the
Dictionary of National Biography and the History of Parliament Trust. His other biographical information, including status as heir, attendance at particular colleges (in
this case not a predominantly Puritan seminary, as classified by Keeler (1954),McGrath
(1967) or Porter (1958)) and the number of inherited manors are directly coded. His father’s entry in the Dictionary of National Biography, the History of Parliament Trust and
genealogy.com is used to assess other endowed variables as well as giving Piers an entry
of 13 inherited manors. Piers’s income is estimated as a simple average of all available
estimates, with aggregate wealth measures put into per year terms. His shareholding and
that of his father and father-in-law are matched to the lists of all shareholders in major
joint stock companies compiled in the Appendix by Theodore Rabb 1967 and extended
and corrected based on these biographies and primary sources.43 We find that Pier’s father was invested in the New England company and the Royal Mines, though he himself
lacked such investments. His constituency of Camelford is matched to geographic, noble
and Crown demesne data drawing mainly upon the author’s constructed GIS of historic
constituencies in England, the Historical Atlas of England by Falkus and Gillingham,
eds (1987), estimates of population change by Wrigley (1985), diocesan records on Puritans and Catholics listed in McGrath (1967)) and documentation of Elizabethan ports
by Willan (1968). Among companies, the classification of profitability is drawn from
company balance sheets in the relevant volumes of Scott (1910).
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37
(a) MP or father investor
(b) MP investor
Figure 1: Constituency-wise distribution of Long Parliament shareholders
(1640). NB: Durham had no representation until 1678
% MPs in constituency
0% - 20%
20.1% - 40%
40.1% - 60%
60.1% - 80%
80.1% - 100%
% MPs in county
0% - 20%
20.1% - 40%
40.1% - 60%
60.1% - 80%
80.1% - 100%
"
)
London (Holborn)
"
)
Figure 2: % MPs rebelling in each constituency, England and Wales, 164244 NB: Durham had no representation until 1678.
38
5 percent reduction
1 percent reduction
0.18
Partial R−squared Parliamentary Control
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
PurMinPC
CourtCon
NRegCo
Puritan
lnPopDen
DistancetoConst
Borough
InManor3
Demesne
Urban00
Heir
PtAtlant
Port
Castles
FNoble
FSirBt
0InherLand
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
Partial R−squared Shareholding
0.04
0.045
0.05
Figure 3: Assessing sensitivity to an unobserved covariate. Partial correlations between observed personal and constituency covariates, shares and rebellion relative to thresholds necessary
for a single unobserved binomial covariate to reduce the effect of shares on support for Parliament to
insignificance at the 5% and 1% levels.
39
1
.8
Pr(rebel)
.6
.4
.2
non-shareholders shareholders
non-shareholders shareholders
merchants
non-merchants
Figure 4: Probability of rebellion by shareholding among merchants and nonmerchants These boxplots depict the distribution of predicted probabilities of rebellion by group,
.5
0
−.5
Probability of owning shares
1
based upon a probit regression of rebel (1) or royalist (0) on share investment, age, age2 , father investor,
inherited land, inherited manors, inherited court ties, heir, father knight or baronet, father noble, old
gentry, and attendance at a puritan college or seminary. The central line depicts the median, the box
depicts the inter-quartile range.
−2
0
2
4
Decades MP of age after Drake (1585)
local average
quartic fit
Figure 5: Probability of MP investment by age of majority after 1585 Quartic
fits on 10 year moving averages, using the window 1570-1630. The red line denotes individuals coming
of age in 1585.
40
1
0
2
Decades MP of age after Drake (1585)
4
−2
quartic fit
4
quartic fit
.8
1
1
0
0
0
.2
.5
Inherited land
2
Decades MP of age after Drake (1585)
.6
Pre−Tudor gentry
1
.8
.6
0
local average
1.5
local average
.4
.5
−.5
−2
.4
4
quartic fit
.2
2
Decades MP of age after Drake (1585)
0
Merchant apprenticeship
1.5
1
0
0
local average
Inherited a manor
.5
Distance to London
2
1
.5
0
Endowed court connections
−2
2
4
−2
0
Decades MP of age after Drake (1585)
4
−2
Borough constituency
.4
.2
2
Decades MP of age after Drake (1585)
4
4
quartic fit
0
−.2
0
local average
2
local average
0
Port constituency
1
.5
0
−2
0
Decades MP of age after Drake (1585)
quartic fit
1.5
local average
−.5
Attended puritan seminary
2
Decades MP of age after Drake (1585)
quartic fit
1
0
local average
.5
−2
−2
quartic fit
0
2
Decades MP of age after Drake (1585)
local average
4
−2
quartic fit
0
2
Decades MP of age after Drake (1585)
local average
4
quartic fit
Figure 6: Age profiles and endowments before and after Drake’s voyages. Quartic
30
20
10
0
1000s sterling, 1600 base
40
fits on 10 year moving averages, using the window 1570-1630.
1550
1560
1570
1580
1590
1600
1610
1620
1630
1642
year
overseas customs revenue
direct taxes
crown asset sales
Figure 7: The rise of overseas customs revenues prior to the Civil War (1642).
(source: own calculations based upon O’Brien and Hunt (1993, 1999), moving averages).
41
Civil War
200
150
100
50
0
1500
1550
1600
1650
1700
1750
Year
Cruisers
Ships of the line
Total warships
Glorious Rev
Civil War
0
50
100
150
200
(a) Warships in the Royal Navy, 1518-1750
1640 1650 1660 1670 1680 1690 1700 1710 1720 1730 1740 1750
Year
England (Britain)
France
Netherlands
Denmark
(b) The Royal Navy and its rivals, 1640-1715
Figure 8: The emergence of the Royal Navy following the Civil War.
source: own calculations from ship lists in Rodger (1997,2004). Cruisers: ships > 100 tons burthen;
Ships of the line: > 500 tons & 50+ guns. The naval classification of “ships of the line” was introduced
midway through this period, so ships from the preceding period are classified using the definition above.
42
Table 1: Data sources
Variable
Individual data
Straffordian
Member of parliamentary
coalition
Sat in Rump Parliament (1648)
Sat in Cavalier Parliament
Proportion of compounding fine
(for royalists)
Date of disablement from
Parliament
Loan for the Cause 1642
Loan for the State 1640
Holder of royal office
Investors in (failed) joint stock
company
Father investor in (failed) joint
stock company
Member of merchant guild/
regulatory co.
Heir
Inherited manors
Family wealth from land
Family wealth from commerce
Armigerous before Tudor dynasty
Father knight or baronet
Father noble
Age, Date of birth & death
Attended puritan college/
seminary
Constituency data
Borough
Elizabethan port
Town above 5000
Puritan ministers
In royal demesne
Castle in constituency
Population of county
County / Borough wealth
Number of taxpayers in
constituency
Original source
Secondary source
List posted in Westminster Yard
Commons lists (1642-48), Compounding
Committee (1642-48)
Commons lists (1642-48)
Commons lists (1642-48)
Commons lists (1642-48), Compounding
Committee (1642-48)
Commons lists (1642-48)
Brunton & Pennington (1954)
Keeler (1954), Brunton & Pennington
(1954), DNB (2007)
Brunton & Pennington (1954)
Brunton & Pennington (1954)
Keeler (1954)
Commons lists (1642-48)
Commons lists (1642-48)
Biographies with multiple sources
Charters (1575-1640), Company books
(1575-1640)
Charters (1575-1640), Company books
(1575-1640)
Charters (1575-1640), Company books
(1575-1640)
Biographies with multiple sources
Biographies with multiple sources
Biographies with multiple sources
Biographies with multiple sources
Biographies with multiple sources
Keeler (1954)
Keeler (1954)
Keeler (1954), DNB (2007), HPT
Scott (1912), Rabb (1998), Keeler
(1954), Willan (1968b)
Scott (1912), Rabb (1998), Keeler
(1954), Willan (1968b)
Scott (1912), Rabb (1998), Keeler
(1954), Willan (1968b)
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Biographies with multiple sources
Biographies with multiple sources
Biographies with multiple sources
Emmanuel & Sidney Sussex College &
Lincolns Inn members lists
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007), HPT
Keeler (1954), DNB (2007)
Commons lists (1642-48)
Customs revenue lists (late 16C)
Estimates: towns above 5000 in
population (1600)
Diocesan records (1600)- assigned to
county in ratio of area in diocese
Traditional crown lands (in 1415)
Castles extant in 1415
1834 enumeration abstract (estimates)
Keeler (1954), DNB (2007)
Willan (1968)
Wrigley (1985)
Keeler (1954)
Usher (1910)
Falkus and Gillingham (1987)
Falkus and Gillingham (1987)
Rickman (1834), Wrigley and
Schonfield
Tudor lay subsidy assessments (1524-25, Sheail (1998)
1545)
Tudor lay subsidy assessments (1524-25, Sheail (1998)
1545)
Abbreviations: HPT: History of Parliament Trust (forthcoming), DNB: Oxford Dictionary of National Biography
43
44
0.23
0.11
0.72
0.74
0.10
0.35
0.21
0.28
0.86
0.16
0.43
548
548
548
545
548
548
548
548
548
548
548
0.111
0.005
0.564
0.577
0.071
0.925
0.194
0.823
0.090
0.27
0.07
0.73
0.72
0.12
0.37
0.22
0.37
1.05
11.90
0.31
0.59
0.44
0.26
0.44
0.45
0.33
0.48
0.42
0.48
0.91
26.88
0.19
0.61
0.24
0.19
0.69
0.74
0.06
0.32
0.18
0.23
0.66
11.93
0.39
0.81
0.43
0.39
0.46
0.44
0.24
0.47
0.38
0.42
0.85
0.000
0.009
0.000
0.474
0.000
0.315
0.737
0.021
0.272
0.209
0.001
0.000
0.000
0.000
0.000
0.000
0.523
0.000
Welch
SD (Prob>|t|)
0.01
0.12
0.60
0.49
165.70 267.89
0.44
0.50
6.87
1.18
0.17
0.38
Reformist
SD
Mean
0.26
0.44
0.11
0.32
31.40 139.60
0.00
0.07
6.77
1.16
0.37
0.49
33.19
0.37
0.84
0.46
0.42
0.46
0.45
0.22
0.48
0.36
0.46
0.85
0.000
0.002
0.001
0.010
0.124
0.047
0.067
Years of age after Drake's Voyage (1585)
536 31.18 12.33
23.46 10.56 0.000
NB: The column ``Welch'' provides t-tests of equality of means, allowing unequal variances.
0.16
0.62
0.31
0.23
0.69
0.71
0.05
0.34
0.16
0.29
0.71
0.75 0.44
0.05 0.22
0.52 0.50
155.30 242.36
0.31 0.46
7.11 1.29
0.33 0.47
0.11
0.29
0.36
0.70
0.42
0.32
0.45
0.44
0.30
0.48
0.40
0.45
0.91
0.51 0.50
0.14 0.34
0.34 0.47
90.05 222.39
0.23 0.42
6.72 1.12
0.24 0.43
534
548
548
547
535
270
548
Welch Royalist
SD (Prob>|t|) Mean
0.869
0.030
Outcomes
Supported Parliament in Civil War (1642-48)
Supported Crown Advisor (Strafford) (1640)
Contributed to London Defense (1642)
Amount for London Defense (1642)
Sat in Rump Parliament (1648-53)
Log(income) (wills/ fines) (1640-50)
Held court office (before 1640)
Individual endowment controls
Father investor
Merchant (apprenticed)
Gentleman (inherited a manor)
Heir
Father noble
Father knight or baronet
Landed prior to Tudor dynasty
Inherited tie to royal court
Constituency distance to London (100km)
Religious endowment controls
Attended Puritan seminary or college
Puritan ministers per 10000 in county
Non-investors
Investors
Obs Mean
SD
Mean
Table 2: Summary statistics, by shareholding and by support for reform
Table 3: Regression: Probability of Holding Overseas Shares
(1)
No
controls
Merchant (apprenticed)
Gentleman (inherited a manor)
Probit
dF/dX
0.171**
[0.070]
0.013
[0.039]
Father investor
Inherited land
Heir
Father knight or baronet
Father noble
Landed prior to Tudor dynasty
Inherited tie to royal court
Constituency dist to London (100km)
Puritan education
(2)
Personal
Probit
dF/dX
0.169**
[0.073]
0.011
[0.059]
0.072*
[0.038]
0.015
[0.060]
-0.012
[0.059]
-0.005
[0.038]
-0.107*
[0.058]
-0.029
[0.045]
0.040
[0.036]
-0.034
[0.024]
0.040
[0.049]
Borough constituency
Port (1603)
Urban pop.> 5000 (1600)
Constituency within royal demesne (1415)
Castle in constituency (1415)
Puritan ministers per 10000 in county
Log. population density of county (1600)
Observations
(Pseudo) R-squared
548
0.04
(3)
545
0.10
(4)
(5)
Constituency
Probit
dF/dX
0.109*
[0.066]
0.020
[0.058]
0.073*
[0.043]
-0.005
[0.061]
-0.022
[0.059]
-0.017
[0.037]
-0.114**
[0.051]
-0.042
[0.047]
0.066*
[0.040]
0.038
[0.028]
0.032
[0.044]
-0.139***
[0.051]
0.176***
[0.053]
-0.028
[0.081]
-0.132***
[0.042]
0.002
[0.072]
0.036
[0.035]
0.158***
[0.043]
545
545
0.13
0.12
OLS
0.169**
[0.070]
0.012
[0.057]
0.072*
[0.037]
0.017
[0.061]
-0.010
[0.059]
-0.005
[0.038]
-0.117*
[0.066]
-0.027
[0.043]
0.040
[0.036]
-0.033
[0.022]
0.041
[0.047]
Omitting
Middlesex
(7)
County
FE
OLS
OLS
OLS
0.113*
0.111*
0.113*
[0.064]
[0.065]
[0.064]
0.016
0.021
0.001
[0.055]
[0.056]
[0.059]
0.066*
0.066*
0.055
[0.039]
[0.040]
[0.044]
0.003
-0.009
0.001
[0.057]
[0.058]
[0.065]
-0.022
-0.017
-0.016
[0.056]
[0.057]
[0.057]
-0.017
-0.020
-0.023
[0.037]
[0.039]
[0.043]
-0.121*
-0.123*
-0.095
[0.062]
[0.062]
[0.072]
-0.040
-0.038
-0.039
[0.045]
[0.046]
[0.052]
0.061
0.054
0.046
[0.038]
[0.039]
[0.045]
0.037
0.045*
-0.039
[0.026]
[0.026]
[0.056]
0.033
0.036
0.038
[0.043]
[0.043]
[0.043]
-0.119*** -0.125*** -0.105**
[0.043]
[0.044]
[0.050]
0.175*** 0.164*** 0.191***
[0.050]
[0.049]
[0.069]
-0.043
-0.068
-0.094
[0.096]
[0.094]
[0.094]
-0.139*** -0.146***
-0.119
[0.050]
[0.051]
[0.108]
-0.011
-0.010
0.153
[0.073]
[0.073]
[0.122]
0.036
0.035
[0.039]
[0.039]
0.182*** 0.236**
[0.042]
[0.092]
545
536
545
0.15
0.14
0.26
Robust standard errors, clustered at county level; * significant at 10%; ** 5%; *** 1%
45
(6)
Table 4: Regression: Supporter of Parliament in Civil War (1642-48) I
(1)
(2)
(3)
(4)
(5)
No controls
Personal
Constituency
Probit
Probit
Probit
dF/dX
dF/dX
OLS
dF/dX
OLS
Shareholder in joint stock
0.213*** 0.205*** 0.189*** 0.197*** 0.179***
[0.045]
[0.046]
[0.042]
[0.045]
[0.042]
Merchant (apprenticed)
0.214** 0.183** 0.168** 0.203** 0.176**
[0.089]
[0.090]
[0.080]
[0.085]
[0.073]
Gentleman (inherited a manor)
0.032
0.030
0.028
0.021
0.021
[0.041]
[0.048]
[0.043]
[0.048]
[0.042]
Father investor
-0.005
-0.003
-0.008
-0.002
[0.048]
[0.044]
[0.049]
[0.045]
Inherited land
0.007
0.001
0.006
-0.002
[0.054]
[0.049]
[0.056]
[0.051]
Heir
-0.001
0.003
0.002
0.006
[0.055]
[0.049]
[0.054]
[0.049]
Father knight or baronet
-0.058
-0.050
-0.075
-0.061
[0.057]
[0.053]
[0.062]
[0.055]
Father noble
-0.166*
-0.151*
-0.157*
-0.143*
[0.085]
[0.079]
[0.086]
[0.077]
Landed prior to Tudor dynasty
-0.017
-0.017
-0.014
-0.017
[0.066]
[0.060]
[0.063]
[0.056]
Inherited tie to royal court
-0.109*
-0.105*
-0.115*
-0.111*
[0.064]
[0.060]
[0.066]
[0.061]
Constituency dist to London (100km)
-0.123*** -0.114***
-0.071* -0.068**
[0.027]
[0.024]
[0.038]
[0.034]
Puritan education
0.168** 0.155**
0.148*
0.137*
[0.073]
[0.070]
[0.078]
[0.071]
Borough constituency
0.075
0.070
[0.061]
[0.053]
Port (1603)
-0.068
-0.066
[0.064]
[0.055]
Urban pop.> 5000 (1600)
-0.075
-0.053
[0.118]
[0.099]
Constituency within royal demesne (1415)
-0.046
-0.052
[0.063]
[0.058]
Castle in constituency (1415)
-0.013
0.002
[0.069]
[0.065]
Puritan ministers per 10000 in county
0.101*** 0.082**
[0.039]
[0.031]
Log. population density of county (1600)
0.129
0.076
[0.093]
[0.050]
Observations
534
531
531
531
531
(Pseudo) R-squared
0.04
0.10
0.13
0.12
0.15
AET Bias
0.055**
0.081*
[0.026]
[0.042]
Implied Lower Bound
0.134
0.098
Ratio: Unobservables : Observables
3.469
2.200
(6)
(7)
Omitting County FE
Middlesex
OLS
0.182***
[0.043]
0.179**
[0.074]
0.022
[0.044]
-0.002
[0.046]
-0.002
[0.053]
0.005
[0.049]
-0.060
[0.056]
-0.142*
[0.079]
-0.017
[0.056]
-0.110*
[0.063]
-0.071**
[0.035]
0.137*
[0.073]
0.075
[0.055]
-0.065
[0.054]
-0.048
[0.102]
-0.048
[0.061]
0.003
[0.066]
0.082**
[0.031]
0.050
[0.123]
522
0.14
0.060
[0.037]
0.122
3.019
OLS
0.207***
[0.044]
0.150*
[0.078]
0.042
[0.046]
-0.019
[0.048]
0.008
[0.057]
0.007
[0.050]
-0.084
[0.057]
-0.143
[0.093]
-0.029
[0.064]
-0.118*
[0.066]
0.059
[0.076]
0.112
[0.080]
0.023
[0.063]
-0.069
[0.071]
-0.042
[0.135]
0.021
[0.133]
-0.069
[0.115]
531
0.26
0.082
[0.052]
0.125
2.512
Robust standard errors, clustered at county level; * significant at 10%; ** 5%; *** 1%; Altonji, Elder, Taber (AET) Bias,
Lower Bounds assume selection on observables equal that on unobservables (with standard errors calculated by
bootstrapping clusters with 100 replications).
46
Table 5: Regression: Supporter of Parliament in Civil War (1642-48) II
(1)
No
controls
Probit
dF/dX
(2)
(3)
Personal
Probit
dF/dX
(5)
Constituency
OLS
Panel A: All investors
Shareholder in joint stock
(4)
0.264*** 0.254*** 0.242***
[0.043]
[0.045]
[0.045]
Shareholder x merchant
-0.321** -0.300** -0.270**
[0.135]
[0.138]
[0.126]
Merchant (apprenticed)
0.296*** 0.265*** 0.259***
[0.067]
[0.073]
[0.072]
Gentleman (inherited a manor)
0.025
0.019
0.02
[0.042]
[0.048]
[0.043]
Observations
534
531
531
(Pseudo) R-squared
0.05
0.11
0.14
Panel B: Investors solely in unprofitable joint stock companies
Unprofitable shareholder
0.284*** 0.289*** 0.280***
[0.050]
[0.054]
[0.056]
Unprofitable JSC x merchant
-0.487*** -0.475*** -0.477***
[0.070]
[0.077]
[0.145]
Merchant (apprenticed)
0.315*** 0.281*** 0.266***
[0.065]
[0.072]
[0.070]
Gentleman (inherited a manor)
0.025
0.024
0.023
[0.043]
[0.049]
[0.044]
Observations
534
531
531
(Pseudo) R-squared
0.05
0.11
0.14
Probit
dF/dX
OLS
(6)
(7)
Omitting + County
Middlesex
FE
OLS
OLS
0.244*** 0.231*** 0.233*** 0.270***
[0.045]
[0.043]
[0.044]
[0.044]
-0.323** -0.289** -0.301** -0.358***
[0.135]
[0.122]
[0.137]
[0.124]
0.286*** 0.271*** 0.277*** 0.264***
[0.072]
[0.069]
[0.070]
[0.068]
0.011
0.014
0.015
0.034
[0.048]
[0.042]
[0.043]
[0.045]
531
531
522
531
0.13
0.16
0.15
0.27
0.269*** 0.257*** 0.258*** 0.271***
[0.058]
[0.057]
[0.058]
[0.060]
-0.481*** -0.464*** -0.481*** -0.470***
[0.076]
[0.134]
[0.140]
[0.143]
0.289*** 0.266*** 0.272*** 0.246***
[0.075]
[0.072]
[0.073]
[0.076]
0.017
0.019
0.019
0.039
[0.048]
[0.043]
[0.044]
[0.048]
531
531
522
531
0.13
0.16
0.15
0.26
Robust standard errors, clustered at county of constituency level; * significant at 10%; ** 5%; *** 1%; Personal
controls include: Heir, Father -investor, -knight or baronet and -noble, Inherited land, inherited tie to royal court,
Puritan education, landed prior to Tudor dynasty, constituency distance to London; Constituency controls include:
Urban population>5000, borough, port, royal demesne, noble castles, puritan ministers per capita in county, log.
population density of county.
47
48
Callington, Cornwall
Rochester, Kent
Tavistock, Devon
Worcestershire
Hull, Yorkshire
Cockermouth, Cumberland
Cockermouth, Cumberland
Arundel, Sussex
Dorset
Totness, Devon
Berealston, Devon
Ashburton, Devon
Truro, Cornwall
Launceston, Cornwall
Wilton, Wiltshire
Arthur Ingram
Thomas Walsingham
John Pym
John Wylde
Peregrine Pelham
John Hippisley
John Fenwick
John Downes
John Browne
Oliver St John
William Strode
Edmund Fowell
John Rolle
John Harris
Benjamin Rudyard
0.714
0.714
0.697
0.692
0.689
0.681
0.674
0.664
0.663
0.622
0.620
0.618
0.604
0.604
0.603
0.600
0.598
0.536
0.518
0.504
Predicted Prob
(Support for
Parliament)
Gentry
Merchant
Gentry
Merchant
Gentry
Gentry
Merchant
Gentry
Gentry
Gentry
Gentry
Mercantile/
Gentry
endowments?
Providence Island
Privateering
Providence Island
Privateering
Privateering
Privateering
Providence Island
Guiana
Providence Island
Incursion into
Spanish/ Portuguese
monopolies
Virginia
Dorchester
Virginia
Dorchester, Mass Bay, New
England, Newfoundland
Virginia
Virginia
Virginia
Saybrook
Virginia
Virginia
Mass Bay
Dorchester
Virginia
Colonization
Joint Stock Company
Levant
Africa (Gynney Bynney)
East India, Levant
East India
East India
East India
East India
New Trades
Above the line: shareholder MPs who actually rebeled but were likely to support the Crown in the absence of shares, based upon the lower bound share effect with personal,
constituency controls and county fixed effects from Table 4. Below the line: additional switchers based on the conventional estimate. Endowments are coded ``merchant'' if the MP
was apprenticed in a merchant company as a child; ``gentry'': if inherited a manor.
Dorchester, Dorset
Tewkesbury, Gloucestershire
Edward Stephens
Northallerton, Yorkshire
Gloucestershire
Nathaniel Stephens
Henry Darley
Herefordshire
Robert Harley
Denzil Holles
Constituency
Name
Table 6: Parliamentary supporters for whom shares predicted to be pivotal
Table 7: Regression: Indicators of Support for Reform
(1)
OLS
No
controls
(2)
Personal Constituency
Panel A: Supporter of Crown Advisor (Strafford) (1640)
Shareholder in joint stock
-0.070*** -0.060***
[0.022] [0.021]
Shareholder x merchant
Merchant (apprenticed)
-0.129*** -0.119***
[0.019] [0.029]
Gentleman (inherited a manor)
-0.011
0.014
[0.035] [0.046]
Observations
548
545
R-squared
0.03
0.08
AET Bias
-0.017* -0.028*
[0.009] [0.014]
Implied Lower Bound
-0.053
-0.032
Ratio: Unobservables : Observables
4.107
2.123
Panel B: Contributor to Defense of London (1642)
Shareholder in joint stock
0.167*** 0.159***
[0.049] [0.047]
Shareholder x merchant
Merchant (apprenticed)
0.109
0.014
[0.069] [0.065]
Gentleman (inherited a manor)
0.03
0.042
[0.045] [0.050]
Observations
548
545
R-squared
0.03
0.12
AET Bias
0.016
0.035
[0.011] [0.023]
Implied Lower Bound
0.151
0.119
Ratio: Unobservables : Observables
10.296
4.549
Panel C: Served in the Rump Parliament (1648-53)
Shareholder in joint stock
0.057
0.061
[0.042] [0.040]
Shareholder x merchant
Merchant (apprenticed)
Gentleman (inherited a manor)
Observations
R-squared
AET Bias
Implied Lower Bound
Ratio: Unobservables : Observables
0.144**
[0.070]
-0.005
[0.027]
535
0.02
0.019
[0.012]
0.038
3.019
(3)
0.113
[0.075]
-0.016
[0.037]
532
0.04
0.021
[0.018]
0.040
2.845
-0.055**
[0.022]
(4)
(5)
(6)
(7)
(8)
(9)
Omitting
Omitting
County FE Personal Constituency
County FE
Middlesex
Middlesex
-0.055**
[0.024]
-0.052* -0.074***
[0.027]
[0.027]
0.070*
[0.041]
-0.093*** -0.142***
[0.029]
[0.032]
0.03
0.016
[0.048]
[0.046]
545
545
0.21
0.08
-0.054**
[0.025]
0.002
0.958
-0.074** -0.068** -0.077**
[0.030]
[0.030]
[0.034]
0.106*
0.079 0.141**
[0.054]
[0.052]
[0.060]
-0.133*** -0.134*** -0.137***
[0.033]
[0.034]
[0.034]
0.013
0.022
0.034
[0.044]
[0.043]
[0.047]
545
536
545
0.09
0.10
0.21
0.145*** 0.143*** 0.173*** 0.168***
[0.049]
[0.050]
[0.055]
[0.049]
-0.046
[0.114]
-0.007
0.011
-0.005
0.029
[0.060]
[0.059]
[0.064]
[0.086]
0.042
0.042
0.044
0.041
[0.048]
[0.049]
[0.056]
[0.051]
545
536
545
545
0.13
0.13
0.26
0.12
0.063*
0.044
0.059
[0.036]
[0.029]
[0.044]
0.082
0.099
0.114
2.304
3.260
2.922
0.161*** 0.160*** 0.183***
[0.051]
[0.052]
[0.055]
-0.089
-0.098
-0.054
[0.113]
[0.115]
[0.111]
0.022
0.043
0.012
[0.079]
[0.078]
[0.079]
0.04
0.04
0.042
[0.049]
[0.049]
[0.056]
545
536
545
0.14
0.13
0.26
-0.098*** -0.109***
[0.026]
[0.028]
0.01
0.02
[0.044]
[0.044]
545
536
0.09
0.10
-0.040**
-0.036*
[0.019]
[0.020]
-0.015
-0.019
1.380
1.530
0.069
[0.041]
0.07
[0.043]
0.081
[0.074]
-0.016
[0.037]
532
0.05
0.018
[0.025]
0.051
3.838
0.064
[0.073]
-0.013
[0.038]
523
0.04
0.004
[0.018]
0.066
16.547
0.092** 0.121***
[0.044]
[0.042]
-0.303***
[0.105]
0.079 0.211***
[0.078]
[0.076]
-0.017
-0.027
[0.040]
[0.039]
532
532
0.12
0.05
0.013
[0.032]
0.079
6.827
0.123*** 0.127*** 0.143***
[0.039]
[0.040]
[0.041]
-0.295*** -0.330*** -0.281**
[0.103]
[0.104]
[0.115]
0.177** 0.171** 0.168**
[0.075]
[0.075]
[0.082]
-0.024
-0.022
-0.025
[0.038]
[0.039]
[0.041]
532
523
532
0.06
0.05
0.13
Robust standard errors, clustered at county of constituency level; * significant at 10%; ** 5%; *** 1%; Personal controls include: Heir, Father investor, -knight or baronet and -noble, Inherited land, inherited tie to royal court, Puritan education, landed prior to Tudor dynasty,
constituency distance to London; Constituency controls include: Urban population>5000, borough, port, royal demesne, noble castles, puritan
ministers per capita in county, log. population density of county. Altonji, Elder, Taber (AET) Bias, Lower Bounds assume selection on
observables equal that on unobservables (with standard errors calculated by bootstrapping clusters with 100 replications). A normalized shift in
the distribution of unobservables would have to be Ratio: Unobservables: Observables times the shift due to the included observables to explain
away the entire effect of shares.
49
Table 8: Regression: Effects of Drake’s Voyages on Shareholding
(1)
OLS
Merchant (apprenticed)
Gentleman (inherited a manor)
No
controls
0.116
[0.070]
0.013
[0.034]
(2)
(3)
Personal +Constituency
0.123*
[0.071]
0.014
[0.053]
0.082
[0.064]
0.017
[0.051]
(4)
Omitting
+County FE
Middlesex
(6)
(7)
Personal +Constituency
(9)
Omitting
+County FE
Middlesex
0.075
[0.063]
0.005
[0.056]
-0.416***
[0.142]
-0.043
0.240
[0.057]
[0.299]
-0.353**
[0.156]
0.107
[0.322]
-0.334**
[0.155]
0.060
[0.321]
-0.466***
[0.163]
0.298
[0.321]
-0.006 0.401***
[0.010]
[0.142]
533
533
0.24
0.11
47.07
0.000
0.343**
[0.157]
533
0.15
39.95
0.000
0.324**
[0.155]
525
0.13
41.44
0.000
0.458***
[0.161]
533
0.24
27.86
0.000
(Adult after 1585) x Age
(Adult after 1585) x Age2
Age (decades)
-0.013
[0.053]
0.003
[0.054]
-0.020
[0.052]
-0.016
[0.053]
Age2 (decades2)
-0.012
[0.009]
536
0.08
-0.015*
[0.009]
533
0.09
-0.010
[0.009]
533
0.14
-0.010
[0.009]
525
0.12
0.129*
[0.070]
0.020
[0.052]
0.415***
[0.122]
-0.243
[0.303]
(8)
0.071
[0.064]
0.022
[0.052]
Adult after 1585
Observations
R-squared
Joint F-test (1585 variables)
Probability> F
(5)
0.087
0.075
[0.063]
[0.063]
0.022
0.028
[0.050]
[0.052]
0.421*** 0.418***
[0.116]
[0.115]
-0.133
-0.077
[0.330]
[0.329]
0.079
[0.063]
0.012
[0.055]
0.337**
[0.130]
-0.333
[0.316]
Robust standard errors, clustered at county of constituency level; * significant at 10%; ** 5%; *** 1%; Columns cumulate the following controls.
Personal controls include: Heir, Father -investor, -knight or baronet and -noble, Inherited land, inherited tie to royal court, Puritan education, landed
prior to Tudor dynasty, constituency distance to London; Constituency controls add: Urban population>5000, borough, port, royal demesne, noble
castles, puritan ministers per capita in county, log. population density of county.
50
Table 9: Age and Regression Discontinuity Estimates
(1)
(2)
Personal
+ Constituency,
County FE
(3)
(4)
Personal
+ Constituency,
County FE
OLS
OLS
OLS
Panel A: Supported Parliament in Civil War (1642-1648)
Shareholder in joint stock
0.148***
0.158*** 0.191***
[0.044]
[0.050]
[0.048]
Shareholder x merchant
-0.233*
[0.129]
Merchant (apprenticed)
0.132*
0.122 0.214***
[0.073]
[0.073]
[0.070]
Gentleman (inherited a manor)
0.037
0.055
0.029
[0.043]
[0.047]
[0.043]
Age(decades)
-0.024
-0.054
-0.025
[0.054]
[0.066]
[0.054]
(5)
Personal
(6)
(7)
Personal + Constituency
OLS 2SLS-RD 2SLS-RD
(8)
(9)
Omitting + Constituency,
Middlesex
County FE
2SLS-RD
2SLS-RD
2SLS-RD
0.478
[0.354]
0.156
[0.478]
0.050
[0.173]
0.036
[0.046]
-0.035
[0.054]
0.468
[0.340]
0.189
[0.533]
0.047
[0.184]
0.035
[0.048]
-0.038
[0.053]
0.173
[0.204]
0.269
[0.460]
0.037
[0.169]
0.069*
[0.041]
-0.059
[0.039]
0.212***
[0.051]
-0.332**
[0.130]
0.232***
[0.070]
0.047
[0.045]
-0.057
[0.066]
0.549*
[0.307]
0.064
[0.082]
0.036
[0.043]
-0.026
[0.048]
0.540*
[0.312]
0.082
[0.440]
0.036
[0.168]
0.040
[0.047]
-0.028
[0.050]
-0.008
[0.009]
519
0.16
-0.004
[0.011]
519
0.30
-0.002
[0.005]
519
-0.002
[0.006]
519
-0.002
[0.006]
519
-0.002
[0.006]
511
-0.003
[0.006]
519
-0.054
[0.037]
0.134**
[0.066]
-0.119***
[0.035]
0.032
[0.048]
0.011
[0.028]
-0.277
[0.194]
-0.076***
[0.028]
0.029
[0.049]
0.010
[0.027]
-0.052*
[0.029]
0.065
[0.044]
-0.123***
[0.031]
0.016
[0.046]
-0.019
[0.032]
-0.066
[0.046]
0.015
[0.047]
-0.009
[0.031]
-0.201
[0.180]
0.281*
[0.154]
-0.178***
[0.062]
0.029
[0.044]
-0.007
[0.031]
-0.176
[0.186]
0.377**
[0.162]
-0.201***
[0.066]
0.032
[0.043]
-0.009
[0.035]
-0.191
[0.176]
0.295
[0.189]
-0.175**
[0.073]
0.039
[0.043]
-0.012
[0.033]
-0.197**
[0.096]
0.455*
[0.235]
-0.228***
[0.081]
0.040
[0.042]
0.013
[0.020]
0.004
[0.006]
533
0.22
0.008
[0.006]
533
0.09
0.003
[0.006]
533
0.22
0.003
[0.005]
533
0.005
[0.004]
533
0.005
[0.005]
533
0.005
[0.004]
525
0.002
[0.005]
533
0.131**
[0.060]
-0.032
[0.066]
0.051
[0.057]
-0.015
[0.050]
0.120**
[0.053]
-0.003
[0.118]
-0.029
[0.091]
0.046
[0.050]
-0.006
[0.050]
0.138**
[0.060]
-0.043
[0.124]
-0.018
[0.087]
0.050
[0.057]
-0.015
[0.049]
0.918*** 0.793***
[0.262]
[0.290]
-0.524
[0.390]
-0.134
0.077
[0.083]
[0.171]
0.024
0.010
[0.049]
[0.049]
0.017
0.006
[0.042]
[0.048]
0.767**
[0.318]
-0.721
[0.440]
0.172
[0.170]
0.006
[0.046]
0.006
[0.054]
0.742**
[0.315]
-0.746
[0.484]
0.189
[0.178]
0.005
[0.047]
0.002
[0.054]
0.235
[0.266]
-0.161
[0.471]
0.020
[0.178]
0.037
[0.052]
-0.003
[0.055]
-0.011
[0.008]
Observations
533
R-squared
0.14
Panel D: Served in the Rump Parliament (1648-53)
Shareholder in joint stock
0.066
[0.043]
Shareholder x merchant
-0.008
[0.008]
533
0.29
-0.011
[0.008]
533
0.14
-0.008
[0.008]
533
0.29
-0.002
[0.004]
533
-0.003
[0.005]
533
-0.004
[0.005]
533
-0.004
[0.005]
525
-0.009
[0.007]
533
0.091*
[0.047]
0.077
[0.070]
-0.011
[0.039]
0.071
[0.052]
0.041
[0.072]
-0.013
[0.042]
0.080
[0.063]
0.132***
[0.045]
-0.244*
[0.131]
0.120
[0.085]
-0.019
[0.043]
0.078
[0.063]
0.208
[0.170]
Merchant (apprenticed)
0.116**
[0.044]
-0.268**
[0.120]
0.167**
[0.079]
-0.020
[0.040]
0.070
[0.052]
0.224**
[0.110]
-0.584
[0.378]
0.284*
[0.153]
-0.030
[0.043]
0.102***
[0.021]
0.164
[0.101]
-0.593
[0.413]
0.265*
[0.155]
-0.026
[0.042]
0.089***
[0.022]
0.216**
[0.100]
-0.745
[0.458]
0.289*
[0.164]
-0.025
[0.043]
0.099***
[0.024]
0.269*
[0.139]
-0.632
[0.474]
0.263
[0.174]
-0.024
[0.044]
0.129***
[0.030]
-0.013
[0.008]
520
0.03
-0.015
[0.010]
520
0.12
-0.013
[0.008]
520
0.04
-0.015*** -0.017***
[0.004]
[0.004]
520
512
-0.021***
[0.004]
520
Age2 (decades2)
-0.009
-0.004
[0.009]
[0.011]
Observations
519
519
R-squared
0.16
0.29
Panel B: Supporter of Crown Advisor (Strafford) (1640)
Shareholder in joint stock
-0.040*
-0.033
[0.024]
[0.031]
Shareholder x merchant
Merchant (apprenticed)
Gentleman (inherited a manor)
Age(decades)
-0.101***
[0.028]
0.013
[0.046]
-0.020
[0.032]
Age2 (decades2)
0.008
[0.006]
Observations
533
R-squared
0.09
Panel C: Contributor to Defense of London (1642)
Shareholder in joint stock
0.120**
[0.052]
Shareholder x merchant
Merchant (apprenticed)
Gentleman (inherited a manor)
Age(decades)
-0.030
[0.068]
0.046
[0.050]
-0.006
[0.051]
Age2 (decades2)
Gentleman (inherited a manor)
Age(decades)
Age2 (decades2)
Observations
R-squared
0.062
[0.062]
-0.006
[0.038]
0.097***
[0.026]
-0.015 -0.015*** -0.016***
[0.010]
[0.005]
[0.003]
520
520
520
0.12
Robust standard errors, clustered at county of constituency level; * significant at 10%; ** 5%; *** 1%; Successive columns cumulate the following:
Personal controls include: Heir, Father -investor, -knight or baronet and -noble, Inherited land, inherited tie to royal court, Puritan education, landed prior to
Tudor dynasty, constituency distance to London; Constituency controls include: Urban population>5000, borough, port, royal demesne, noble castles,
puritan ministers per capita in county, log. population density of county. First stage for IV in Table 3. Excluded instruments include: Of age after 1585 and
interactions with age and age2, weighted using GMM optimal weighting matrix as in Hayashi (2000)
51
Table 10: Regression: Alternative channels- Income and Ideology
(1)
(2)
(3)
(4)
(5)
Personal
+ Constituency,
County FE
Personal
+ Constituency,
County FE
Personal
OLS
OLS
0.383*
[0.202]
0.363*
[0.208]
0.987***
[0.359]
0.048
[0.301]
0.083
[0.137]
-0.312
[0.251]
OLS
Panel A: Log. Contemporaneous income
Shareholder in joint stock
0.486**
[0.205]
Shareholder x merchant
Merchant (apprenticed)
Gentleman (inherited a manor)
Age(decades)
0.472
[0.317]
0.081
[0.135]
-0.372
[0.249]
2
2
Age (decades )
0.067*
[0.039]
Father investor
0.158
[0.146]
Inherited land
0.785***
[0.285]
Heir
0.266
[0.184]
Father knight or baronet
0.438***
[0.117]
Father noble
0.759**
[0.305]
Landed prior to Tudor dynasty
0.024
[0.180]
Inherited tie to royal court
0.053
[0.132]
Constituency dist to London (100km)
0.064
[0.092]
Observations
265
R-squared
0.25
Panel B: Courtier before Long Parliament
Shareholder in joint stock
0.066
[0.049]
Shareholder x merchant
Merchant (apprenticed)
Gentleman (inherited a manor)
Age(decades)
2
2
Age (decades )
Inherited tie to royal court
Observations
R-squared
-0.111**
[0.047]
-0.027
[0.035]
0.020
[0.041]
-0.011
[0.007]
0.488***
[0.037]
533
0.29
(7)
(8)
(9)
Personal + Constituency
(6)
Omitting
Middlesex
+ Constituency,
County FE
2SLS-RD 2SLS-RD
2SLS-RD
OLS 2SLS-RD 2SLS-RD
0.062
[0.864]
0.924
[1.062]
0.254
[0.394]
0.098
[0.127]
-0.358**
[0.174]
0.452
[1.008]
1.202
[1.244]
0.245
[0.497]
-0.075
[0.151]
-0.276*
[0.141]
0.058
0.062*
0.059
[0.038]
[0.032]
[0.038]
0.045
0.102
0.107
[0.166]
[0.172]
[0.171]
0.975*** 0.779*** 0.781***
[0.329]
[0.276]
[0.281]
0.347
0.231
0.229
[0.216]
[0.202]
[0.199]
0.389*** 0.432*** 0.438***
[0.142]
[0.121]
[0.119]
1.067*** 0.749** 0.755**
[0.394]
[0.315]
[0.306]
-0.017
0.039
0.036
[0.201]
[0.171]
[0.168]
-0.051
0.041
0.038
[0.150]
[0.135]
[0.132]
-0.013
0.074
0.075
[0.165]
[0.089]
[0.089]
265
265
265
0.53
0.062*
0.062*
[0.035]
[0.035]
0.157
0.157
[0.142]
[0.142]
0.830*** 0.830***
[0.275]
[0.275]
0.235
0.235
[0.191]
[0.191]
0.368*** 0.368***
[0.096]
[0.096]
0.755*** 0.755***
[0.287]
[0.287]
0.007
0.007
[0.137]
[0.137]
0.026
0.026
[0.127]
[0.127]
0.175
0.175
[0.127]
[0.127]
265
265
0.055**
[0.027]
0.019
[0.173]
0.980***
[0.287]
0.331
[0.236]
0.393***
[0.126]
1.073***
[0.355]
-0.014
[0.166]
-0.055
[0.138]
-0.01
[0.141]
265
0.030
[0.055]
0.192*
[0.106]
-0.176***
[0.038]
-0.020
[0.035]
0.021
[0.042]
0.031 0.470*** 0.528***
[0.064]
[0.145]
[0.113]
0.216*
-0.345
[0.124]
[0.225]
-0.161*** -0.162***
-0.044
[0.050]
[0.056]
[0.087]
-0.030
-0.033
-0.043
[0.040]
[0.038]
[0.040]
0.026
0.000
0.011
[0.053]
[0.025]
[0.018]
0.528*** 0.559***
[0.144]
[0.134]
-0.392
-0.452*
[0.248]
[0.275]
-0.009
0.011
[0.093]
[0.100]
-0.041
-0.035
[0.036]
[0.036]
0.020
0.027
[0.023]
[0.021]
0.794***
[0.160]
-0.558**
[0.260]
0.055
[0.106]
-0.056
[0.042]
0.064**
[0.029]
-0.012
-0.011
[0.009]
[0.008]
0.484*** 0.487***
[0.042]
[0.038]
533
533
0.36
0.3
-0.013
-0.002
-0.004
[0.009]
[0.005]
[0.004]
0.482*** 0.475*** 0.478***
[0.043]
[0.038]
[0.038]
533
533
533
0.37
-0.006
-0.007*
[0.005]
[0.004]
0.464*** 0.473***
[0.037]
[0.038]
533
525
-0.010**
[0.005]
0.473***
[0.042]
533
0.840**
[0.403]
-0.054
[0.182]
-0.405
[0.255]
0.264
[0.183]
1.263**
[0.572]
0.274
[0.412]
-0.061
[0.184]
-0.310
[0.252]
0.071*
0.057
[0.038]
[0.040]
0.048
0.157
[0.175]
[0.140]
0.942*** 0.790***
[0.324]
[0.292]
0.393*
0.251
[0.223]
[0.180]
0.368** 0.454***
[0.144]
[0.117]
1.105*** 0.772**
[0.400]
[0.301]
-0.013
0.019
[0.204]
[0.176]
-0.048
0.038
[0.156]
[0.133]
-0.004
0.069
[0.170]
[0.093]
265
265
0.52
0.27
0.067
[0.060]
-0.091
[0.057]
-0.035
[0.039]
0.024
[0.052]
0.950
[0.738]
0.353
[0.409]
0.063
[0.140]
-0.291**
[0.137]
0.858
[0.995]
0.341
[1.203]
0.219
[0.403]
0.066
[0.140]
-0.279*
[0.165]
0.062
[0.864]
0.924
[1.062]
0.254
[0.394]
0.098
[0.127]
-0.358**
[0.174]
Robust standard errors, clustered at county of constituency level; * significant at 10%; ** 5%; *** 1%; Personal controls include: Heir, Father -investor, -knight
or baronet and -noble, Inherited land, inherited tie to royal court, Puritan education, landed prior to Tudor dynasty, constituency distance to London; Constituency
controls include: Urban population>5000, borough, port, royal demesne, noble castles, puritan ministers per capita in county, log. population density of county.
First stage for IV in Table 3. Excluded instruments include: Of age after 1585 and interactions with age and age2, weighted using GMM optimal weighting
matrix, as in Hayashi (2000)
52
Table 11: Major overseas joint-stock companies, 1575-1640 and representation
in the Long Parliament
Name
Chartered/
formed
Members+
Investors in Long
Parliament (1640)
Father
Self
Father in-law
0
1
0
0
0
0
23
38
38
2
0
2
Profitable?*
Foreign attacks?
Royal intervention
East Indies
Drake's circumnavigation
1577
8
Yes
Spanish
Elizabeth major beneficiary
Cavendish's ventures
1586
4
No
Spanish
East India Co
1599
1318
Initially
Dutch
Crown raises customs
Courteen's East Indies Co
1635
7
No
Dutch
Charles shareholder
Africa trades
Senegal Adventurers
1588
22
0
1
1
Unknown
Portuguese
Gynney & Bynney Co
1618
38
1
1
2
No
Portuguese Charles shareholder
Nicholas Crispe & Co
1630
3
1
0
0
Yes
French, Dutch Patentees were courtiers
Central / South America incursion
Other privateering
1581
1051
28
22
17
No (on avg)
Spanish
Guiana Co / Amazon Co
1584
105
7
9
12
No
Spanish
Raleigh executed (Spanish infl.)
Drake's 1587 voyage
1587
21
1
1
0
Yes
Spanish
Elizabeth shareholder
Fenton's voyage to Brazil
1592
42
0
2
1
No
Portuguese
Bermuda Co
1612
177
2
8
13
Initially
Crown raises customs
Providence Island Co
1630
23
13
5
5
No
Spanish
New endeavours within Europe
Muscovy Co / Greenland Adv**
1555
211
3
3
4
Yes
Dutch
Irish co (Munster & Londonderry)
1586
762
6
14
18
Yes
Charter revoked
Levant Co**
1592
572
9
14
14
Yes
Spanish, Barbary Crown raises customs
Northwest passage exploration
Frobisher's Voyages
1576
121
1
8
6
No
Other NWP ventures
1584
311
3
21
20
No
Hudson's NWP venture
1610
23
1
1
3
No
North America
Gilbert's enterprises
1578
147
1
4
3
No
Gosnold's voyage
1602
5
0
0
1
Yes
Weymouth's voyage
1605
5
0
1
1
Yes
Other New England ventures***
1606
70
15
12
12
No
Virginia Co (Roanoke)
1606 (1584)
1671
42
77
69
No
Newfoundland/ N. Scotia / Canada Co
1610
58
7
0
4
No
French
Crown surrenders colonies
Baffin's NWP backers
1615
8
0
0
1
No
Plymouth Co
1620
50
4
2
0
No
Dorchester/ Massachusetts Bay Co
1623
123
13
1
0
No
Crown threatens charter
+= Lower bound;*=Profitable for shareholders prior to Long Parliament; **= switched to regulatory company structure upon confirmation of
profitability;***=Northern VA Co, New England Council and delegated patents, including Saybrook Co and Maine Exploration. For sources: see Appendix.
53