The History of England from the Accession of James II, Vol. 4

T >> Thomas Babington Macaulay >> The History of England from the Accession of James II, Vol. 4

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In the midst of the public distress one class prospered greatly,
the bankers; and among the bankers none could in skill or in luck
bear a comparison with Charles Duncombe. He had been, not many
years before, a goldsmith of very moderate wealth. He had
probably, after the fashion of his craft, plied for customers
under the arcades of the Royal Exchange, had saluted merchants
with profound bows, and had begged to be allowed the honour of
keeping their cash. But so dexterously did he now avail himself
of the opportunities of profit which the general confusion of
prices gave to a moneychanger, that, at the moment when the trade
of the kingdom was depressed to the lowest point, he laid down
near ninety thousand pounds for the estate of Helmsley in the
North Riding of Yorkshire. That great property had, in a troubled
time, been bestowed by the Commons of England on their victorious
general Fairfax, and had been part of the dower which Fairfax's
daughter had brought to the brilliant and dissolute Buckingham.
Thither Buckingham, having wasted in mad intemperance, sensual
and intellectual, all the choicest bounties of nature and of
fortune, had carried the feeble ruins of his fine person and of
his fine mind; and there he had closed his chequered life under
that humble roof and on that coarse pallet which the great
satirist of the succeeding generation described in immortal
verse. The spacious domain passed to a new race; and in a few
years a palace more splendid and costly than had ever been
inhabited by the magnificent Villiers rose amidst the beautiful
woods and waters which had been his, and was called by the once
humble name of Duncombe.

Since the Revolution the state of the currency had been
repeatedly discussed in Parliament. In 1689 a committee of the
Commons had been appointed to investigate the subject, but had
made no report. In 1690 another committee had reported that
immense quantities of silver were carried out of the country by
Jews, who, it was said, would do any thing for profit. Schemes
were formed for encouraging the importation and discouraging the
exportation of the precious metals. One foolish bill after
another was brought in and dropped. At length, in the beginning
of the year 1695, the question assumed so serious an aspect that
the Houses applied themselves to it in earnest. The only
practical result of their deliberations, however, was a new penal
law which, it was hoped, would prevent the clipping of the
hammered coin and the melting and exporting of the milled coin.
It was enacted that every person who informed against a clipper
should be entitled to a reward of forty pounds, that every
clipper who informed against two clippers should be entitled to a
pardon, and that whoever should be found in possession of silver
filings or parings should be burned in the cheek with a redhot
iron. Certain officers were empowered to search for bullion. If
bullion were found in a house or on board of a ship, the burden
of proving that it had never been part of the money of the realm
was thrown on the owner. If he failed in making out a
satisfactory history of every ingot he was liable to severe
penalties. This Act was, as might have been expected, altogether
ineffective. During the following summer and autumn, the coins
went on dwindling, and the cry of distress from every county in
the realm became louder and more piercing.

But happily for England there were among her rulers some who
clearly perceived that it was not by halters and branding irons
that her decaying industry and commerce could be restored to
health. The state of the currency had during some time occupied
the serious attention of four eminent men closely connected by
public and private ties. Two of them were politicians who had
never, in the midst of official and parliamentary business,
ceased to love and honour philosophy; and two were philosophers,
in whom habits of abstruse meditation had not impaired the homely
good sense without which even genius is mischievous in politics.
Never had there been an occasion which more urgently required
both practical and speculative abilities; and never had the world
seen the highest practical and the highest speculative abilities
united in an alliance so close, so harmonious, and so honourable
as that which bound Somers and Montague to Locke and Newton.

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