308 Chapter 16
of Europe’s central banks, allowing private bankers to
draw upon its gold reserves in periods of financial crisis.
Credit, backed by reliable taxation, paid for the
fleet, Marlborough’s armies, and the large subsidies that
England paid to its continental allies. England, which
became Great Britain when it merged with Scotland in
1707, was therefore able to expand its empire and pro-
tect its markets more easily than the Dutch, whose
war fleet declined after 1673 and whose decentralized
institutions blocked the formation of more effective
credit mechanisms. English trade, which had been ex-
panding steadily throughout the seventeenth century,
became a flood during the War of the Spanish Succes-
sion when the British navy swept the seas of all rivals
(see table 16.1). In time the enormous wealth derived
largely from overseas markets would provide the capital
for the industrial revolution and further strengthen
English claims to great power status.
The most active phase of the War of the Spanish Succes-
sion lasted from 1701 to 1711. During that period the
English lost 1,061 merchant ships to enemy raiders, while
the English balance of trade (surplus of exports over im-
ports) increased enormously, owing primarily to in-
creased exports of cloth and grain to Portugal, Holland,
Germany, and Russia and to decreased imports from
France and Spain. Because the increase in trade more
than compensated for the subsidies sent to the continent
for war, the British were, in mercantilist terms, net benefi-
ciaries of the war.
Extra-European Overall
Year trade balance trade balance
1699–1701 £ 489,000 £ 974,000
1702 233,000 971,000
1703 515,000 1,745,000
1704 968,000 1,519,000
1706 836,000 2,705,000
1707 672,000 2,024,000
1708 630,000 2,022,000
1709 271,000 2,111,000
1710 825,000 2,486,000
1711 969,000 2,731,000
Source: Adapted from D. W. Jones, War and Economy in the Age of
William III and Marlborough(Oxford: Basil Blackwell, 1988), p. 220.TABLE 16.1English Trade Balances