Distrust of Financial and Commercial Institutions

Distrust of the Bank of England, the stock market, and the large companies engaged in overseas trade reached a peak in the South Sea Bubble of 1720. Distrust of national banks later became a recurrent source of distrust in the United States, which led to the failure of the first two such banks and prevented a third from being established until 1913. Distrust of the system of taxation in Britain focused mainly on excise taxes, which the government was in large part successful in managing by the middle of the eighteenth century, whereas excise taxes, direct taxes, and customs duties levied on American colonists became a major source of colonial distrust of the British government in the 1760s and 1770s. This chapter also deals with the formation of legal trusts, which are transfers of property from one party to another, who holds the property “in trust” for a beneficiary. The main source of distrust of this system in early modern England came from the royal government itself when landed families used trusts to avoid paying taxes in the 1530s.