The History of England, from the Accession of James II — Volume 4

It is much to be lamented that we have not a minute history of the conferences of the men to whom England owed the restoration of her currency and the long series of prosperous years which dates from that restoration. It would be interesting to see how the pure gold of scientific truth found by the two philosophers was mingled by the two statesmen with just that quantity of alloy which was necessary for the working. It would be curious to study the many plans which were propounded, discussed and rejected, some as inefficacious, some as unjust, some as too costly, some as too hazardous, till at length a plan was devised of which the wisdom was proved by the best evidence, complete success.

Newton has left to posterity no exposition of his opinions touching the currency. But the tracts of Locke on this subject are happily still extant; and it may be doubted whether in any of his writings, even in those ingenious and deeply meditated chapters on language which form perhaps the most valuable part of the Essay on the Human Understanding, the force of his mind appears more conspicuously. Whether he had ever been acquainted with Dudley North is not known. In moral character the two men bore little resemblance to each other. They belonged to different parties. Indeed, had not Locke taken shelter from tyranny in Holland, it is by no means impossible that he might have been sent to Tyburn by a jury which Dudley North had packed. Intellectually, however, there was much in common between the Tory and the Whig. They had laboriously thought out, each for himself, a theory of political economy, substantially the same with that which Adam Smith afterwards expounded. Nay, in some respects the theory of Locke and North was more complete and symmetrical than that of their illustrious successor. Adam Smith has often been justly blamed for maintaining, in direct opposition to all his own principles, that the rate of interest ought to be regulated by the State; and he is the more blamable because, long before he was born, both Locke and North had taught that it was as absurd to make laws fixing the price of money as to make laws fixing the price of cutlery or of broadcloth. 639

Dudley North died in 1693. A short time before his death he published, without his name, a small tract which contains a concise sketch of a plan for the restoration of the currency. This plan appears to have been substantially the same with that which was afterwards fully developed and ably defended by Locke.

One question, which was doubtless the subject of many anxious deliberations, was whether any thing should be done while the war lasted. In whatever way the restoration of the coin might be effected, great sacrifices must be made, the whole community or by a part of the community. And to call for such sacrifices at a time when the nation was already paying taxes such as, ten years before, no financier would have thought it possible to raise, was undoubtedly a course full of danger. Timorous politicians were for delay; but the deliberate conviction of the great Whig leaders was that something must be hazarded, or that every thing was lost. Montague, in particular, is said to have expressed in strong language his determination to kill or cure. If indeed there had been any hope that the evil would merely continue to be what it was, it might have been wise to defer till the return of peace an experiment which must severely try the strength of the body politic. But the evil was one which daily made progress almost visible to the eye. There might have been a recoinage in 1691 with half the risk which must be run in 1696; and, great as would be the risk in 1696, that risk would be doubled if the coinage were postponed till 1698.

Those politicians whose voice was for delay gave less trouble than another set of politicians, who were for a general and immediate recoinage, but who insisted that the new shilling should be worth only ninepence or ninepence halfpenny. At the head of this party was William Lowndes, Secretary of the Treasury, and member of Parliament for the borough of Seaford, a most respectable and industrious public servant, but much more versed in the details of his office than in the higher parts of political philosophy. He was not in the least aware that a piece of metal with the King's head on it was a commodity of which the price was governed by the same laws which govern the price of a piece of metal fashioned into a spoon or a buckle, and that it was no more in the power of Parliament to make the kingdom richer by calling a crown a pound than to make the kingdom larger by calling a furlong a mile. He seriously believed, incredible as it may seem, that, if the ounce of silver were divided into seven shillings instead of five, foreign nations would sell us their wines and their silks for a smaller number of ounces. He had a considerable following, composed partly of dull men who really believed what he told them, and partly of shrewd men who were perfectly willing to be authorised by law to pay a hundred pounds with eighty. Had his arguments prevailed, the evils of a vast confiscation would have been added to all the other evils which afflicted the nation; public credit, still in its tender and sickly infancy, would have been destroyed; and there would have been much risk of a general mutiny of the fleet and army. Happily Lowndes was completely refuted by Locke in a paper drawn up for the use of Somers. Somers was delighted with this little treatise, and desired that it might be printed. It speedily became the text book of all the most enlightened politicians in the kingdom, and may still be read with pleasure and profit. The effect of Locke's forcible and perspicuous reasoning is greatly heightened by his evident anxiety to get at the truth, and by the singularly generous and graceful courtesy with which he treats an antagonist of powers far inferior to his own. Flamsteed, the Astronomer Royal, described the controversy well by saying that the point in dispute was whether five was six or only five. 640

Thus far Somers and Montague entirely agreed with Locke; but as to the manner in which the restoration of the currency ought to be effected there was some difference of opinion. Locke recommended, as Dudley North had recommended, that the King should by proclamation fix a near day after which the hammered money should in all payments pass only by weight. The advantages of this plan were doubtless great and obvious. It was most simple, and, at the same time, most efficient. What searching, fining, branding, hanging, burning, had failed to do would be done in an instant. The clipping of the hammered pieces, the melting of the milled pieces would cease. Great quantities of good coin would come forth from secret drawers and from behind the panels of wainscots. The mutilated silver would gradually flow into the mint, and would come forth again in a form which would make mutilation impossible. In a short time the whole currency of the realm would be in a sound state, and, during the progress of this great change, there would never at any moment be any scarcity of money.

These were weighty considerations; and to the joint authority of North and Locke on such a question great respect is due. Yet it must be owned that their plan was open to one serious objection, which did not indeed altogether escape their notice, but of which they seem to have thought too lightly. The restoration of the currency was a benefit to the whole community. On what principle then was the expense of restoring the currency to be borne by a part of the community? It was most desirable doubtless that the words pound and shilling should again have a fixed signification, that every man should know what his contracts meant and what his property was worth. But was it just to attain this excellent end by means of which the effect would be that every farmer who had put by a hundred pounds to pay his rent, every trader who had scraped together a hundred pounds to meet his acceptances, would find his hundred pounds reduced in a moment to fifty or sixty? It was not the fault of such a farmer or of such a trader that his crowns and halfcrowns were not of full weight. The government itself was to blame. The evil which the State had caused the State was bound to repair, and it would evidently have been wrong to throw the charge of the reparation on a particular class, merely because that class was so situated that it could conveniently be pillaged. It would have been as reasonable to require the timber merchants to bear the whole cost of fitting out the Channel fleet, or the gunsmiths to bear the whole cost of supplying arms to the regiments in Flanders, as to restore the currency of the kingdom at the expense of those individuals in whose hands the clipped sliver happened at a particular moment to be.

Locke declared that he regretted the loss which, if his advice were taken, would fall on the holders of the short money. But it appeared to him that the nation must make a choice between evils. And in truth it was much easier to lay down the general proposition that the expenses of restoring the currency ought to be borne by the public than to devise any mode in which they could without extreme inconvenience and danger be so borne. Was it to be announced that every person who should within a term of a year or half a year carry to the mint a clipped crown should receive in exchange for it a milled crown, and that the difference between the value of the two pieces should be made good out of the public purse? That would be to offer a premium for clipping. The shears would be more busy than ever. The short money would every day become shorter. The difference which the taxpayers would have to make good would probably be greater by a million at the end of the term than at the beginning; and the whole of this million would go to reward malefactors. If the time allowed for the bringing in of the hammered coin were much shortened, the danger of further clipping would be proportionally diminished; but another danger would be incurred. The silver would flow into the mint so much faster than it could possibly flow out, that there must during some months be a grievous scarcity of money.

A singularly bold and ingenious expedient occurred to Somers and was approved by William. It was that a proclamation should be prepared with great secresy, and published at once in all parts of the kingdom. This proclamation was to announce that hammered coins would thenceforth pass only by weight. But every possessor of such coins was to be invited to deliver them up within three days, in a sealed packet, to the public authorities. The coins were to be examined, numbered, weighed, and returned to the owner with a promissory note entitling him to receive from the Treasury at a future time the difference between the actual quantity of silver in his pieces and the quantity of silver which, according to the standard, those pieces ought to have contained. 641 Had this plan been adopted an immediate stop would have been put to the clipping, the melting and the exporting; and the expense of the restoration of the currency would have been borne, as was right, by the public. The inconvenience arising from a scarcity of money would have been of very short duration; for the mutilated pieces would have been detained only till they could be told and weighed; they would then have been sent back into circulation, and the recoinage would have taken place gradually and without any perceptible suspension or disturbance of trade. But against these great advantages were to be set off hazards, which Somers was prepared to brave, but from which it is not strange that politicians of less elevated character should have shrunk. The course which he recommended to his colleagues was indeed the safest for the country, but was by no means the safest for themselves. His plan could not be successful unless the execution were sudden; the execution could not be sudden if the previous sanction of Parliament were asked and obtained; and to take a step of such fearful importance without the previous sanction of Parliament was to run the risk of censure, impeachment, imprisonment, ruin. The King and the Lord Keeper were alone in the Council. Even Montague quailed; and it was determined to do nothing without the authority of the legislature. Montague undertook to submit to the Commons a scheme, which was not indeed without dangers and inconveniences, but which was probably the best which he could hope to carry.

On the twenty-second of November the Houses met. Foley was on that day again chosen Speaker. On the following day he was presented and approved. The King opened the session with a speech very skilfully framed. He congratulated his hearers on the success of the campaign on the Continent. That success he attributed, in language which must have gratified their feelings, to the bravery of the English army. He spoke of the evils which had arisen from the deplorable state of the coin, and of the necessity of applying a speedy remedy. He intimated very plainly his opinion that the expense of restoring the currency ought to be borne by the State; but he declared that he referred the whole matter to the wisdom of his Great Council. Before he concluded he addressed himself particularly to the newly elected House of Commons, and warmly expressed his approbation of the excellent choice which his people had made. The speech was received with a low but very significant hum of assent both from above and from below the bar, and was as favourably received by the public as by the Parliament. 642 In the Commons an address of thanks was moved by Wharton, faintly opposed by Musgrave, adopted without a division, and carried up by the whole House to Kensington. At the palace the loyalty of the crowd of gentlemen showed itself in a way which would now be thought hardly consistent with senatorial gravity. When refreshments were handed round in the antechamber, the Speaker filled his glass, and proposed two toasts, the health of King William, and confusion to King Lewis; and both were drunk with loud acclamations. Yet near observers could perceive that, though the representatives of the nation were as a body zealous for civil liberty and for the Protestant religion, and though they were prepared to endure every thing rather than see their country again reduced to vassalage, they were anxious and dispirited. All were thinking of the state of the coin; all were saying that something must be done; and all acknowledged that they did not know what could be done. "I am afraid," said a member who expressed what many felt, "that the nation can bear neither the disease nor the cure." 643

There was indeed a minority by which the difficulties and dangers of that crisis were seen with malignant delight; and of that minority the keenest, boldest and most factious leader was Howe, whom poverty had made more acrimonious than ever. He moved that the House should resolve itself into a Committee on the State of the Nation; and the Ministry, for that word may now with propriety be used, readily consented. Indeed the great question touching the currency could not be brought forward more conveniently than in such a Committee. When the Speaker had left the chair, Howe harangued against the war as vehemently as he had in former years harangued for it. He called for peace, peace on any terms. The nation, he said, resembled a wounded man, fighting desperately on, with blood flowing in torrents. During a short time the spirit might bear up the frame; but faintness must soon come on. No moral energy could long hold out against physical exhaustion. He found very little support. The great majority of his hearers were fully determined to put every thing to hazard rather than submit to France. It was sneeringly remarked that the state of his own finances had suggested to him the image of a man bleeding to death, and that, if a cordial were administered to him in the form of a salary, he would trouble himself little about the drained veins of the commonwealth. "We did not," said the Whig orators, "degrade ourselves by suing for peace when our flag was chased out of our own Channel, when Tourville's fleet lay at anchor in Torbay, when the Irish nation was in arms against us, when every post from the Netherlands brought news of some disaster, when we had to contend against the genius of Louvois in the Cabinet and of Luxemburg in the field. And are we to turn suppliants now, when no hostile squadron dares to show itself even in the Mediterranean, when our arms are victorious on the Continent, when God has removed the great statesman and the great soldier whose abilities long frustrated our efforts, and when the weakness of the French administration indicates, in a manner not to be mistaken, the ascendency of a female favourite?" Howe's suggestion was contemptuously rejected; and the Committee proceeded to take into consideration the state of the currency. 644

Meanwhile the newly liberated presses of the capital never rested a moment. Innumerable pamphlets and broadsides about the coin lay on the counters of the booksellers, and were thrust into the hands of members of Parliament in the lobby. In one of the most curious and amusing of these pieces Lewis and his ministers are introduced, expressing the greatest alarm lest England should make herself the richest country in the world by the simple expedient of calling ninepence a shilling, and confidently predicting that, if the old standard were maintained, there would be another revolution. Some writers vehemently objected to the proposition that the public should bear the expense of restoring the currency; some urged the government to take this opportunity of assimilating the money of England to the money of neighbouring nations; one projector was for coining guilders; another for coining dollars. 645

Within the walls of Parliament the debates continued during several anxious days. At length Montague, after defeating, first those who were for letting things remain unaltered till the peace, and then those who were for the little shilling, carried eleven resolutions in which the outlines of his own plan were set forth. It was resolved that the money of the kingdom should be recoined according to the old standard both of weight and of fineness; that all the new pieces should be milled; that the loss on the clipped pieces should be borne by the public; that a time should be fixed after which no clipped money should pass, except in payments to the government; and that a later time should be fixed, after which no clipped money should pass at all. What divisions took place in the Committee cannot be ascertained. When the resolutions were reported there was one division. It was on the question whether the old standard of weight should be maintained. The Noes were a hundred and fourteen; the Ayes two hundred and twenty-five. 646

It was ordered that a bill founded on the resolutions should be brought in. A few days later the Chancellor of the Exchequer explained to the Commons, in a Committee of Ways and Means, the plan by which he proposed to meet the expense of the recoinage. It was impossible to estimate with precision the charge of making good the deficiencies of the clipped money. But it was certain that at least twelve hundred thousand pounds would be required. Twelve hundred thousand pounds the Bank of England undertook to advance on good security. It was a maxim received among financiers that no security which the government could offer was so good as the old hearth money had been. That tax, odious as it was to the great majority of those who paid it, was remembered with regret at the Treasury and in the City. It occurred to the Chancellor of the Exchequer that it might be possible to devise an impost on houses, which might be not less productive nor less certain than the hearth money, but which might press less heavily on the poor, and might be collected by a less vexatious process. The number of hearths in a house could not be ascertained without domiciliary visits. The windows a collector might count without passing the threshold. Montague proposed that the inhabitants of cottages, who had been cruelly harassed by the chimney men, should be altogether exempted from the new duty. His plan was approved by the Committee of Ways and Means, and was sanctioned by the House without a division. Such was the origin of the window tax, a tax which, though doubtless a great evil, must be considered as a blessing when compared with the curse from which it rescued the nation. 647

Thus far things had gone smoothly. But now came a crisis which required the most skilful steering. The news that the Parliament and the government were determined on a reform of the currency produced an ignorant panic among the common people. Every man wished to get rid of his clipped crowns and halfcrowns. No man liked to take them. There were brawls approaching to riots in half the streets of London. The Jacobites, always full of joy and hope in a day of adversity and public danger, ran about with eager looks and noisy tongues. The health of King James was publicly drunk in taverns and on ale benches. Many members of Parliament, who had hitherto supported the government, began to waver; and, that nothing might be wanting to the difficulties of the conjuncture, a dispute on a point of privilege arose between the Houses. The Recoinage Bill, framed in conformity with Montague's resolutions, had gone up to the Peers and had come back with amendments, some of which, in the opinion of the Commons, their Lordships had no right to make. The emergency was too serious to admit of delay. Montague brought in a new bill; which was in fact his former bill modified in some points to meet the wishes of the Lords; the Lords, though not perfectly contented with the new bill, passed it without any alteration; and the royal assent was immediately given. The fourth of May, a date long remembered over the whole kingdom and especially in the capital, was fixed as the day on which the government would cease to receive the clipped money in payment of taxes. 648

The principles of the Recoinage Act are excellent. But some of the details, both of that Act and of a supplementary Act which was passed at a later period of the session, seem to prove that Montague had not fully considered what legislation can, and what it cannot, effect. For example, he persuaded the Parliament to enact that it should be penal to give or take more than twenty-two shillings for a guinea. It may be confidently affirmed that this enactment was not suggested or approved by Locke. He well knew that the high price of gold was not the evil which afflicted the State, but merely a symptom of that evil, and that a fall in the price of gold would inevitably follow, and could by no human power or ingenuity be made to precede, the recoinage of the silver. In fact, the penalty seems to have produced no effect whatever, good or bad. Till the milled silver was in circulation, the guinea continued, in spite of the law, to pass for thirty shillings. When the milled silver became plentiful, the guinea fell, not to twenty-two shillings, which was the highest price allowed by the law, but to twenty-one shillings and sixpence. 649

Early in February the panic which had been caused by the first debates on the currency subsided; and, from that time till the fourth of May, the want of money was not very severely felt. The recoinage began. Ten furnaces were erected, in the garden behind the Treasury; and every day huge heaps of pared and defaced crowns and shillings were turned into massy ingots which were instantly sent off to the mint in the Tower. 650

With the fate of the law which restored the currency was closely connected the fate of another law, which had been several years under the consideration of Parliament, and had caused several warm disputes between the hereditary and the elective branch of the legislature. The session had scarcely commenced when the Bill for regulating Trials in cases of High Treason was again laid on the table of the Commons. Of the debates to which it gave occasion nothing is known except one interesting circumstance which has been preserved by tradition. Among those who supported the bill appeared conspicuous a young Whig of high rank, of ample fortune, and of great abilities which had been assiduously improved by study. This was Anthony Ashley Cooper, Lord Ashley, eldest son of the second Earl of Shaftesbury, and grandson of that renowned politician who had, in the days of Charles the Second, been at one time the most unprincipled of ministers, and at another the most unprincipled of demagogues. Ashley had just been returned to Parliament for the borough of Poole, and was in his twenty-fifth year. In the course of his speech he faltered, stammered and seemed to lose the thread of his reasoning. The House, then, as now, indulgent to novices, and then, as now, well aware that, on a first appearance, the hesitation which is the effect of modesty and sensibility is quite as promising a sign as volubility of utterance and ease of manner, encouraged him to proceed. "How can I, Sir," said the young orator, recovering himself, "produce a stronger argument in favour of this bill than my own failure? My fortune, my character, my life, are not at stake. I am speaking to an audience whose kindness might well inspire me with courage. And yet, from mere nervousness, from mere want of practice in addressing large assemblies, I have lost my recollection; I am unable to go on with my argument. How helpless, then, must be a poor man who, never having opened his lips in public, is called upon to reply, without a moment's preparation, to the ablest and most experienced advocates in the kingdom, and whose faculties are paralysed by the thought that, if he fails to convince his hearers, he will in a few hours die on a gallows, and leave beggary and infamy to those who are dearest to him." It may reasonably be suspected that Ashley's confusion and the ingenious use which he made of it had been carefully premeditated. His speech, however, made a great impression, and probably raised expectations which were not fulfilled. His health was delicate; his taste was refined even to fastidiousness; he soon left politics to men whose bodies and minds were of coarser texture than his own, gave himself up to mere intellectual luxury, lost himself in the mazes of the old Academic philosophy, and aspired to the glory of reviving the old Academic eloquence. His diction, affected and florid, but often singularly beautiful and melodious, fascinated many young enthusiasts. He had not merely disciples, but worshippers. His life was short; but he lived long enough to become the founder of a new sect of English freethinkers, diametrically opposed in opinions and feelings to that sect of freethinkers of which Hobbes was the oracle. During many years the Characteristics continued to be the Gospel of romantic and sentimental unbelievers, while the Gospel of coldblooded and hardheaded unbelievers was the Leviathan.

The bill, so often brought in and so often lost, went through the Commons without a division, and was carried up to the Lords. It soon came back with the long disputed clause altering the constitution of the Court of the Lord High Steward. A strong party among the representatives of the people was still unwilling to grant any new privilege to the nobility; but the moment was critical. The misunderstanding which had arisen between the Houses touching the Recoinage Bill had produced inconveniences which might well alarm even a bold politician. It was necessary to purchase concession by concession. The Commons, by a hundred and ninety-two votes to a hundred and fifty, agreed to the amendment on which the Lords had, during four years, so obstinately insisted; and the Lords in return immediately passed the Recoinage Bill without any amendment.

There had been much contention as to the time at which the new system of procedure in cases of high treason should come into operation; and the bill had once been lost in consequence of a dispute on this point. Many persons were of opinion that the change ought not to take place till the close of the war. It was notorious, they said, that the foreign enemy was abetted by too many traitors at home; and, at such a time, the severity of the laws which protected the commonwealth against the machinations of bad citizens ought not to be relaxed. It was at last determined that the new regulations should take effect on the twenty-fifth of March, the first day, according to the old Calendar, of the year 1696.

On the twenty-first of January the Recoinage Bill and the Bill for regulating Trials in cases of High Treason received the royal assent. On the following day the Commons repaired to Kensington on an errand by no means agreeable either to themselves or to the King. They were, as a body, fully resolved to support him, at whatever cost and at whatever hazard, against every foreign and domestic foe. But they were, as indeed every assembly of five hundred and thirteen English gentlemen that could by any process have been brought together must have been, jealous of the favour which he showed to the friends of his youth. He had set his heart on placing the house of Bentinck on a level in wealth and splendour with the houses of Howard and Seymour, of Russell and Cavendish.

Some of the fairest hereditary domains of the Crown had been granted to Portland, not without murmuring on the part both of Whigs and Tories. Nothing had been done, it is true, which was not in conformity with the letter of the law and with a long series of precedents. Every English sovereign had from time immemorial considered the lands to which he had succeeded in virtue of his office as his private property. Every family that had been great in England, from the De Veres down to the Hydes, had been enriched by royal deeds of gift. Charles the Second had carved ducal estates for his bastards out of his hereditary domain. Nor did the Bill of Rights contain a word which could be construed to mean that the King was not at perfect liberty to alienate any part of the estates of the Crown. At first, therefore, William's liberality to his countrymen, though it caused much discontent, called forth no remonstrance from the Parliament. But he at length went too far. In 1695 he ordered the Lords of the Treasury to make out a warrant granting to Portland a magnificent estate in Denbighshire. This estate was said to be worth more than a hundred thousand pounds. The annual income, therefore, can hardly have been less than six thousand pounds; and the annual rent which was reserved to the Crown was only six and eightpence. This, however, was not the worst. With the property were inseparably connected extensive royalties, which the people of North Wales could not patiently see in the hands of any subject. More than a century before Elizabeth had bestowed a part of the same territory on her favourite Leicester. On that occasion the population of Denbighshire had risen in arms; and, after much tumult and several executions, Leicester had thought it advisable to resign his mistress's gift back to her. The opposition to Portland was less violent, but not less effective. Some of the chief gentlemen of the principality made strong representations to the ministers through whose offices the warrant had to pass, and at length brought the subject under the consideration of the Lower House. An address was unanimously voted requesting the King to stop the grant; Portland begged that he might not be the cause of a dispute between his master and the Parliament; and the King, though much mortified, yielded to the general wish of the nation. 651