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Thursday, October 9, 2014

Pepys’s Personal Hockey Stick

Wheeling, dealing and saving in the 17th century

Samuel Pepys, Diary, 1660–1669

My last column spent a little time considering the meticulous accounting that 17th-century diarist Samuel Pepys kept of his health. Pepys’s financial accounting was equally meticulous, and his diary allows readers to track his substantial increase in wealth over the course of a decade.

Indeed, the graph of Pepys’s financial gains has a hockey stick shape that will be decidedly familiar to readers of Deirdre McCloskey’s Bourgeois Virtues.

In the 17th century many would have relied on a simple counting of cash and possessions on hand as a way of gauging their wealth. For Pepys this was woefully inadequate. On a near monthly basis — until failing eyesight and increasingly complicated accounts prevented the practice — Pepys does a full accounting of what he has, what he owes, what he is owed, and sometimes what he expects. He then goes over the accounts with his patron, the Earl of Sandwich, who pays Pepys what he owes him for outstanding invoices and other expenses and then signs off on the account.

Because Pepys’s accounts are so complex, he is often unsure of exactly what he is worth. As a result, this monthly exchange with “my Lord” becomes a moment that is often fraught with uncertainty for him. His pleasure when his back-of-the-envelope calculations jibe with his account books is evident throughout the diary.

Up and to my office alone all the morning, making up my monthly accounts, which though it hath been very intricate, and very great disbursements and receipts and odd reckonings, yet I differed not from the truth; viz.: between my first computing what my profit ought to be and then what my cash and debts do really make me worth, not above 10s., which is very much, and I do much value myself upon the account, and herein I with great joy find myself to have gained this month above 100l.clear, and in the whole to be worth above 1400l., the greatest sum I ever yet was worth. (30 April 1665)

Pepys seems to attribute as much value and worth to his accuracy as to his accumulation.

Early on in the diary, the 27-year-old Pepys suspects that he may have hit a much smaller financial milestone — a personal worth of 100 pounds — but he is not quite sure, and he happily and worriedly frets over his accounting for three days until “my Lord” signs the account book.

At sermon in the morning; after dinner into my cabin, to cast my accounts up, and find myself to be worth near 100l., for which I bless Almighty God, it being more than I hoped for so soon, being I believe not clearly worth 25l. when I came to sea besides my house and goods. (3 June 1660)

This afternoon I showed my Lord my accounts, which he passed, and so I think myself to be worth near 100l. now. (4 June 1660)

In the afternoon I played at ninepins with my Lord, and when he went in again I got him to sign my accounts for 115l., and so upon my private balance I find myself confirmed in my estimation that I am worth 100l. (5 June 1660)

Triumphantly, Pepys is then able to engage in a bit of a financial venture. “I took the opportunity to send all my Dutch money, 70 ducatoons and 29 gold ducats to be changed, if he can, for English money, which is the first venture that ever I made, and so I have been since a little afeard of it” (5 June 1660). Presumably, he has decided that he has enough English money on hand to be able to send his Dutch money back to Holland to be exchanged. This venture required considerable time and risk but would also simplify Pepys’s accounting in the future, as he wouldn’t have to wrangle with exchange rates.

Pepys’s financial record over the course of the decade is, as the graph indicates, one of steadily increasing success. And Pepys — who famously referred to himself as a “very rising man” — took great pleasure in that increase. But he was also always aware of how his own personal foibles could just as steadily decrease his wealth. He was a delighted consumer of clothes, art, and musical instruments, and an avid theatergoer. The diary is filled with vows to stop spending so much on such pleasures, and with regret when he fails and pleasure when he succeeds.

My purse is worth about 650l., besides my goods of all sorts, which yet might have been more but for my late layings out upon my house and public assessment, and yet would not have been so much if I had not lived a very orderly life all this year by virtue of the oaths that God put into my heart to take against wine, plays, and other expenses, and to observe for these last twelve months, and which I am now going to renew, I under God owing my present content thereunto. (31 December 1662)

The last annual accounting we have of Pepys’s wealth is from 1666, when, despite the tumult and disorder of the plague and the Great Fire of London, he records his worth as over 6,200 pounds. Quite an impressive increase in six-and-a-half years!

It’s tempting to close here with some simple observations that Pepys’s bourgeois virtues, multiplied throughout the early modern populace, are the driving factor in creating the hockey stick shape of McCloskey’s graph. And it would not be completely wrong to do so. Careful accounting, responsible financial management, cautious investment, and spending a bit — but not too much — on the pleasures of early modern London, are all important factors in that massive economic growth.

However, history is always more complicated than we would like to think. The inflection point of Pepys’s hockey stick is not merely due to good investment and careful management. His job as clerk of the acts to the navy board combined with the increasing importance of the Earl of Sandwich and the beginning of the Second Dutch War to increase Pepys’s importance and influence. He began to get a cut of naval prizes, to accept “gifts” from those who wanted to be government contractors, and to take percentages of the prizes that others were awarded. After the war, there were inquiries into this kind of financial hijinks, and it was only due to the influence of the king that Pepys, Sandwich, and others were not imprisoned. The inquiries, however, dogged Pepys for years, and may have contributed to later suspicions that he was selling naval secrets to the French and that he was a Jacobite sympathizer.

So it was bourgeois virtues and vices that got Pepys his hockey stick, and it was a culture that found his wheeling and dealing increasingly unacceptable that was about to set off a much larger hockey stick of its own.