5 
THE WORK OF THE STOCK EXCHANGE 
over, the sums borrowed in this way were comparatively small, 
and could be made only for short periods, owing to the limited 
resources of private money-lenders. 
The Increasing Expensiveness of Government.—How- 
ever crude dependence of governmental finance upon personal 
borrowing by the sovereign may seem today, it sufficed fairly 
well for the relatively small needs of sixteenth and seventeenth 
century governments. In those distant periods populations 
were smaller than at present, the standard of living was almost 
inconceivably lower, and the contemporary warfare with blun- 
derbusses, swords, and sailing ships vastly cheaper. Many a 
modern city requires vastly more financial accommodation than 
did the whole kingdom of Elizabeth. Nevertheless, the ex- 
penses of government were through this period steadily in- 
creasing, owing to such diverse factors as the Spanish discov- 
eries of gold in America, the frequent and expensive amours 
of a Charles or a Louis, and the semireligious, semipolitical 
wars in the low countries and elsewhere. Financial stringency 
helped to expel the last Stuart king from England in 1688, 
and to dampen the warlike ardor of his successor, William III. 
During the reign of the latter, however, a financial policy 
was adopted with profound consequences for society. Interest- 
bearing negotiable certificates acknowledging the public indebt- 
edness were issued by the State, and sold to the recently created 
class of English investors who were earnestly seeking a safe 
way of investing their savings. In contrast to the private 
money-lending institutions of the day, such investors possessed 
a vastly larger aggregate of investable funds, and in addition 
they generally preferred to make long-term rather than short- 
term loans—so much so, in fact, that the principal portion of 
both the British and French funded national debts came sub- 
sequently to be issued in securities without a maturity date. 
Modern Government Expenditure.—Since about 1700, 
when this new and practical means of obtaining larger funds