The History of Currency, 1252 to 1896 Part 13

"Now oure angell is not so much but neare it, about 23 caretts 3 grains and 1/2.

"4 grains makes a caret. 24 caretts an oz.

"In silver every pound lacks 4s. 6d.

"A pound is 3^{li} in tale.

"In 6 angells wch is in tale 3^{li}, and in weight one ounce, there is not such an alloy, for in silver we want 4s. 6d., and in gold but--"

The notes end thus imperfectly, but what Salisbury was toilfully figuring for himself lay ready to his hand in the opinions of experts and of the officials of the Mint. Immediately succeeding these broken notes of his in the State Papers, there exists a series of doc.u.ments which he doubtless had under his eye, and which exposed the situation with a clearness that was more than convincing. "Statement of the Loss sustained by England in the Exchange of Coin." ... "Statement by the Officers of the Mint that the Raising the Value of the English Silver Coins by making a Pound Troy of Silver worth 3, 11s. 6d. only equalises the Value of English Money with those of Foreign Countries, and that to prevent the Export of Gold its Price must be raised in Proportion." And so on.

As the result of such representations, and after ten months of wavering Salisbury gave way, and on the 22nd November 1611 he consented to the issuing of a proclamation raising the denominational value of all gold coins 10 per cent. This proclamation was issued on the following day, and the ratio was thereby at a blow raised from 12.15 to 13.32.

Among the many alternative schemes proposed before the adoption of this measure, had been one for "raising 500,000 on loan to the King, by coining bra.s.s money to that amount, and compelling their acceptance in certain proportions by the people, on promise to repay within seven years in full value silver." It was fondly a.s.serted that this would be a "means of preventing the export of coin and bullion, caused by the rise and value of foreign coin."

Another project brought forward was "for meeting the increase of value laid upon the coins of the Low Countries by issuing a copper coinage, corresponding thereto, and by raising the value of English silver and gold coins in order to prevent losses of merchants in foreign trade, etc."

[Sidenote: ENGLAND: THE AGITATION OF 1611]

A year later a third scheme was proposed to remedy the under-valuation of English monies, "by the coinage of small silver monies of coa.r.s.er silver, so as to raise the value of the larger money in proportion; the old standard to be observed in payments of rents, the new in ordinary bargains."

The step actually and finally adopted, however, by the proclamation of 1611, did not equalise the exchange for more than a twelvemonth. The rise on the Continent continued, and the outflow recommenced. In 1612 the Council took note of the persons concerned in this trade of transporting, with a view to proceeding against them, while on their side the general commercial public, or such of them as did not share the secret and the gain of bullion-broking, demanded that the under-valuation of English monies should be redeemed by further raising the value of the coins one penny in the shilling. On the 14th May 1612 a proclamation was issued forbidding merchants to exceed Mint prices in buying bullion. A year later (4th July 1613) we are told that the Privy Council had sat twelve or thirteen hours on the Sunday, and "have been forced to dismiss the gold and silver business, and also that of the fishing, as involving many points in the treaties with Burgundy and Holland."

The State papers of this year contain quite numerous references to the subject: "Statement of the Undervalue set upon English Money in Foreign Countries, as proved by the last Placard of the Low Countries"; "Notes of the Advantage arising to the Crown of England from raising the Shilling to 13-1/2 Pence, and the Proportion of Gold from 12-1/2 to 13"; "Suggestions as to the Means of Preventing Foreign Nations from taking Advantage of the English in the Exchange of Monies, viz., raising English Coins in Nominal Value," etc.

On the 23rd March 1615 a further proclamation was issued against the export of gold and silver coin, and in the following year the exports of the East India Company were limited to 6000 in bullion or specie. The Mint officials proposed a raising of the denomination, and again the matter was hotly debated in and out of the Council. But a different race of men from Raleigh had succeeded, and, on the 31st December 1618, the Privy Council determined that "silver shall not be raised in value at present, and uniformity in the weight of the coin is to be observed; the melting of gold for braid or plate forbidden, but further regulations postponed till the committee for exchanges bring their report."

[Sidenote: ENGLAND: THE MEASURES OF 1619]

As it happened, owing to the necessity of replenishing the King's finances, the question had become complicated, and some of the measures proposed for staying the coin had a more sinister bearing, as is apparent in one of the schemes referred to (_supra_, p. 136), being, in short, cloaked proposals of debas.e.m.e.nt. In setting its face against such proposals of debas.e.m.e.nt the Council was right, but such proposals had relation only to the King's finances, and not to the currency crux, and in delaying the proper tariffing of the English against the continental coins the Council did wrong. By 1619 the evil had risen to so great a height that the Council determined to act upon its own proclamations.

Eighteen merchants were sentenced in the Star Chamber for exporting gold (8th December 1619), five being acquitted. The total of the fines imposed on the sentenced men reached 140,000, and it was stated that since the beginning of the reign a matter of 7,000,000 of gold had been surrept.i.tiously exported. On the 31st July 1619 proclamation was issued for a new coinage. The gold _angel_ was reduced in weight from 71-1/9 grs. to 64-11/15, being equivalent to an increase of an eleventh in its denominational value: and in January 1620, following the convictions of the merchants referred to, the Council busily debated "the erecting an exchange for monies, to prevent the export of silver by the goldsmiths who have been the offenders."

All these steps were taken too late, and the currency crisis which shook Germany ran its full course, too, in England.

In 1620 there was a great scarcity of silver in the country, and the trade of the Eastland merchant was gone--a scarcity and decay which they attributed "to the rise of foreign coin, especially that of Poland and Holland, during the last four years in which the Hollanders have farmed the King of Poland's Mint." The export of cloth had sunk to one-third the output of the previous year. By May 1621 the situation had become pressing. The secret export of money still continued, and it was again proposed to register bills of exchange, and also to make Spanish and French coins current in the country. In June the Privy Council issued circulars to the East India, Turkey, French, Eastland, and Spanish companies, and the Company of Merchant-Adventurers--practically the whole mercantile corporation of London--desiring them to choose experienced persons from each of these companies, to consult upon the best means of managing the exchange of monies, so as to encourage the import of silver, and prevent its export. Their statement on the 17th June was simply that the export was due to the under-valuation of the English monies. The Council considered their report on the following day, and ordered it to be further considered, "but the Lords think it best for some agreement to be made with neighbouring states for a due correspondence in the value of the coins now used."

[Sidenote: ENGLAND: THE CRISIS OF 1622]

But while the Lords of the Council talked of treaties the crisis came.

By the end of the year there was no money in the country, and trade was at a standstill. In February 1622, Locke informs Carleton "money is very scarce. In the clothing counties the poor have a.s.sembled in troops of forty or fifty, and gone to houses of the rich and demanded meat and money, which has been given through fear. The Lords ordered the clothiers to keep their people at work, but as they complained that they cannot sell their cloth, usurers and monied men though not in the trade are ordered to buy it." In March the Justices write from Gloucestershire: "The people begin to steal, and many are starving; all trades are decayed; money very scarce." Stocks of cloth acc.u.mulated in the London "halls" or warehouses of the various districts, and notes of them were submitted to the Privy Council.

Pieces unsold.

Gloucester, Worcester, Reading, Somerset, and Suffolk Hall, and Blackwell Hall, 433

Manchester Hall 853 ("Besides many in the country which are not sent off for want of a market.")

Storehouse for Gloucester, Worcester, Kent, Somerset 1163 (Mostly belonging to Kent.)

Wiltshire Hall 560

Northern Hall 5159

Leadenhall 3057 (Cloths from Suffolk and Ess.e.x.)

Devonshire Kerseys 423

The merchant-adventurers were appealed to, to buy up these stocks, but they were unable. The ordinary taxes of the country could not be levied, or, when levied, proved only a fraction of the estimated amount, and invariably the commissioner attributed the deficiency to the want of money and the general decay of trade. "Wools and cloth are grown almost valueless," write the justices of Somerset, on the 15th of May 1622, "and the people desperate for want of work."

The expectations of outbreaks were great, and in Nottingham musters were held, and the trained bands ordered to be ready for instant service, to suppress riots, if any occurred (July 1622).

Meanwhile the Council was busy conferring with merchant delegates from every part of the country. A new proclamation against exporting coin was talked of (15th June 1622), and a declaration issued (same day), that the King purposed to establish a Royal Exchange, to regulate all exchanges.

"Treatises on Exchanges," "Statements of the Disadvantages of a Low Exchange," and similar doc.u.ments crowd the State papers; and on the 28th July a proclamation was issued ordering nothing to be worn at funerals but English-made cloth, forbidding the export of raw wool or yarn, and declaring the establishing of a Standing Commission on matters of trade.

On the 30th of August the Goldsmiths' Company returned their answers to the Council's queries with regard to the comparative weight and value of Spanish _reals_ and English shillings, and suggested that the pound of silver should be cut into 65s. instead of 62s. The officers of the Mint followed up this advice by confirmatory testimony. "The business is weighty," wrote Sir Robert Heath to Secretary Calvert, in enclosing him the above reports. "For we are drawn dry. Coin must be brought in from elsewhere [i.e. abroad], which can only be by a.s.surance of gain to the merchants in equalling our coin to that of other States." As a corollary it was proposed on the following day, August 31, to encourage the bringing in of money by making the Spanish _real_ pa.s.s current at 4s.

8d., its true value in English coin. "The merchants will bring them in at this profit, though they can gain more for them in Holland, and they press for an immediate reply, as the Spanish fleet is coming in, and the money will be brought hither if the merchant can make a reasonable profit."

In September the clothworkers and dyers of London complained in a pet.i.tion of their want of employment, and that many thousands of them were in the greatest distress. So great was the want in the country districts that a proclamation was issued ordering all persons of quality in London and Westminster to go to the country, and reside on their estates, for the relief of the poor in the dearth. In January 1623 fears of disturbance in Ess.e.x were rife, "because of poor clothworkers, the masters being unable to employ the men, and many who were thought the wealthiest were likely to become bankrupt." On the 7th of February the officers of the Mint reported to the Council that they found the value of the Spanish _real of eight_ to be equal to 4s. 6-1/2d., as compared with the new shilling coin; and on the 4th of March following a proclamation was issued to make these Spanish _reals_ current at 4s.

6d., "in hopes of bringing some of that coin to the Mint."

From this time onwards no further references, save one laconic remark in May 1623, "the poor do not complain much," occur in the State papers to this, one of the acutest currency crises in our history; and we are left to follow the process of recovery and the dumb, inarticulate agony of the widespread ruin in sympathy and imagination merely. The details here given are taken entirely from the State papers, stolid and ungarnished, but the tale they tell is momentous and dire in its importance.

When consulted by the Privy Council, the various committees and delegates of the merchants attributed the crisis to the deceits practised in the manufacture of cloth, to the embargo on its sale, and other such causes, as well as to the scarcity of money, and the loss in exchange. The first suggestion is hardly worth a moment's consideration.

Every testimony points to the fact that the crisis was as purely a monetary or currency crisis, as later crises have been distinguishedly credit crises. Between 1613 and 1621 hardly any silver monies were coined in the English Mint; for example, between 1617 and 1620 the total silver coinage was only 1070, whereas in the four succeeding years the silver coinage at the Tower Mint amounted to 205,500.

[Sidenote: ENGLAND: JAMES I.]

"From the year 1621," says one of the informers of 1638, to whose pet.i.tion reference will be shortly made, "many goldsmiths and cashiers of London culled the weighty shillings and sixpences to make into plate, silver wire, and to other manufactures; for most of that time, we having wars with Spain, little or no silver came from thence; so likewise hath little or no silver from France in that time, and no silver could be brought out of Holland by reason it went so high by the placard. For sterling silver pa.s.sed in Holland for 4d. per ounce higher than it was made in our Mint, sterling being in Holland at 5s. 4d. per ounce, so that no silver could be imported from Holland to supply our Mint, which the goldsmiths and others perceiving presently fell a-culling the silver monies current, and the money being coined in the Mint at 5s. 2d., the goldsmiths, finers, and wire-drawers did raise it up to 5s. 3d. per ounce, and melted down into the weight of shillings and sixpences, and left none to pa.s.s betwixt man and man but light monies and clipped, and did exceed the rate of the Mint by giving for sterling 5s. 3d. per ounce, and 5s. 3-1/2d., and sometimes more; by which means there was no silver brought into the Mint for ten years to speak of but the silver which came from Wales. This will appear by the Mint books."

The testimony only confirms the previous inference. The whole reign of James I. was a period of inefficient attempts to rate the English coinage to the incessant rise in the continental coinages, of consequent drain of specie to the Netherlands, and of practical closing of the Mints at home. The cause, opportunity, channel, or machinery of the drain was the incessantly shifting, badly tariffed, imperfectly understood bimetallic system of the times; and the crisis of 1622 was only the most patent expression of its malignant action. It is doubtful whether the political effect of that crisis has been properly estimated by the const.i.tutional student of the popular revolution under the Stuarts. Its commercial, currency, and economic and theoretic influence has certainly, and much more, been hitherto overlooked.

[Sidenote: ENGLAND: CHARLES I.]

The reign of Charles I., and the period of the Commonwealth, display similar characteristics to that of James I., but in a more modified and less malignant measure. Putting aside, after one nearly fatal slip in August 1626, the various propositions for a debas.e.m.e.nt which were made early in his reign, Charles made, throughout, no change in the denomination or value of his coins, and no change in the ratio. In 1627 the export of coinage became again perceptible, and a warrant was issued for erecting a Royal Exchange between England and Scotland, September 28, and for a proclamation forbidding all indirect practices of merchants, and underhand buying of uncurrent coin and foreign bullion.

In the following March, 1628, a committee was appointed to advise his Majesty concerning the coins, and to observe from time to time all accidents at home and abroad touching coins. Numerous schemes were proposed for the arresting of the process of export. They bear generally two characters--(1) as proposing a change of the ratio; (2) as proposing a differential issue of the silver issue coinage, i.e. coining 4d., 3d., and 2d. silver pieces at a different and higher rate than the larger silver pieces. Such schemes have no importance at the present day, save as foreshadowing the mechanism by which England finally evolved a monometallic system which permitted of the fullest retention of silver.

The flow of coinage which these proposals were intended to meet was not now to the Netherlands but to France, and it must be attributed to the course of the French currency already indicated. In 1630 the names of certain merchants engaged in the transport of gold and silver were reported to the Council, together with the names of the French merchants who received the same in France. In June 1635 certain of these were arrested, and in 1638 not less than thirty-seven of them were prosecuted in the Star Chamber for this unlawful transportation. The drain went steadily on during the whole of the decade. On January 18, 1635-6, a proclamation was issued for restraint of the consumption of coin and bullion. In the following March an order of the King in Council was issued against the exportation of English and Scotch coin, and by gentlemen crossing the sea, and forbidding the wearing of jewels, etc., "because of the great quant.i.ty of money exported." Any such enactments were doomed to be futile. The true remedy, or rather the keynote of the situation, was contained in a proposition submitted to the Privy Council for the making current of certain foreign coins. "The forbidding of Spanish money in England," says the author Barrett, "was to enrich the Mint, which brought forth contrary effects, for the French, Dutch, and other nations, by advancing Spanish coins, received the greatest profit." He accordingly proposed that the King should raise the Spanish money to be current in England by proclamation. The double _pistolets_ weighing 16s. to be raised to 15s.; the _piece of eight_ weighing 5s. to be raised to 4s. 6d., "and when there is store brought into the kingdom, then have a new proclamation to call in these coins to be stamped with a mark and apprised to the intrinsic value." The step was not adopted, and by his Majesty's declaration of 1639 in the Star Chamber, gold and silver were to be considered commodities of merchandise. "By 1640 there was not in the kingdom a million of silver," says Sir Ralph Maddison in a memorial. "Gold and silver," said Sir Thomas Roe in his speech on trade in the Commons, "are very scarce, and the kingdom is impoverished.

Money has been drawn away into other kingdoms, especially into France and Holland, where it is worth more." One of the informants, who had been employed by the Government in the prosecutions of 1638, thus gave his testimony in a pet.i.tion which he subsequently drew up: "Divers goldsmiths of London are become exchangers of bullion of gold and silver, and buy it of merchants and others, pretending to carry it to the Mint. But indeed they are the greatest instruments for transporting that are, and in a manner they are only those who furnish transporters with English and foreign gold, Spanish money, _rixdollars_, _pistolets_, _cardacues_, etc. Some of the goldsmiths make it their use and practice to buy light English gold of shopkeepers and others, which, by the laws of this kingdom, wanting beyond remedy, ought to be bought as bullion, and upon the sale ought to be defaced and new-coined in the Mint. But they take another way, for they sell all this gold to transport, though it want four, five, or six grains above the allowance, and that a 20s.-piece will not make 19s. to be coined in the Mint. Yet the goldsmiths will not abate above 2d. or 3d., and sometimes but 1d. in the piece, let the gold want what it will, by which means they outgive the Mint, and the gold which the goldsmiths buy of the subjects, thinking it is to carry to the Mint to be new-coined, to pa.s.s in current payment, they put it into a dead sea, never to be made coin of in our commonwealth. For, weekly, French and English have bought up this gold, let it be as light as it will, at 19s. 9d., 19s. 10d., 19s. 11d., and so after that rate for all other gold, to the value of many hundred thousand pounds. Many thousands of _dollars_ and Spanish money they furnish yearly to merchants that trade for Norway and Denmark, to transport silver for those parts."

[Sidenote: ENGLAND: THE SITUATION IN 1638]

The drain of coinage to France he distinctly attributes to the raising of the French coins. "At this present in France the native merchants there match us with such a point of policy that it would be hard for our merchants to be master of.... Since the raising of our 20s.-piece to 26s. there ... they have advanced the price of their commodities according to their advanced monies, to the full sum of 6s. in the pound more than they were before."

[Sidenote: ENGLAND: SIR ROBERT STONE ON THE MINT]

During the Civil Wars there is a remarkable paucity of reference to the subject, doubtless owing to the supreme importance of the war itself. On the 26th August 1643, and on the 24th February 1643-4, the Long Parliament issued orders, on the pet.i.tion of merchant strangers who were prevented from importing bullion by the rigours of the search of their vessels, for their due encouragement. The pet.i.tions would argue a tendency towards an importation of specie, but in 1649 this was again changed, and a heavy export became perceptible. There can be little doubt that the initial impulse came from the new coinage which was inst.i.tuted by the Act of 17th July 1649, and by the table of weights for the Commonwealth coins which that Act adopted. For two years and more both Council and Parliament were exercised in mind with regard to this export of specie and the consequent decay of trade, and draft Acts to prevent the export, as well as many other propositions, were had under long consideration. No measures were adopted, and an Amsterdam correspondent of Sir Robert Stone, in May 1652, thus gave his opinion of the wisdom of the Mint officials and the Government in this process of drift: "Experience has taught me that when the State does not keep extraordinary watch, and the laws are not put into execution against culling and sorting out the heaviest coins to be transported, and the light and clipped left behind, it is a great debasing of the current value of coin. All your silver money (i.e. in England) is thus abused by goldsmiths and others. And when the State does not employ such as can discover those offenders, but puts persons into the Mint who have had no experience, great damage must follow. For there are bankers and exchangers in Holland who know the ignorance of all your present Mint men that have any place of trust, and laugh at them. They say when the Mint in the Tower flourished, old Andrew Palmer, Mr. Rogers, and one Cojan were there, who were all subtle Mint men, and held correspondence here (i.e. in Amsterdam), and knew what to do to advance the Mint, and would always find a way to bring grist to the mill. But now your Mint comes to be neglected and money adulterated. Many of our bankers here have a great trade with your goldsmiths and merchants in London for English gold and heavy English silver. Your Mint will never go until this be discovered, for these men are the sluices that drain all your money. I believe there is at this day forty times more gold and silver in the Low Countries than in England. About twelve years since the French were forced to call in all their money, it being so clipped that their commerce ran into confusion, and you have almost brought yourself to the same point, the coin in Ireland being 20 per cent. less value since the war. In England almost all your gold is transported, and the little that is left is in hucksters' hands, that go to an exchange in Lombard Street, and you must pay from 6 to 10, and sometimes more, to have 100 in gold for silver. For who will take gold to the Tower to be coined, and lose 2s. in 20s. of what they can make by transporting it?

We have more English gold in Amsterdam than you have (in England), all sent within those twenty years, and great quant.i.ties of English silver have weekly come over in pinks and Dutch men-of-war for years, to the value of many hundred thousands of pounds, in return for coin. I wondered at first how the merchants transported all the weighty and culled English money into Holland, until one of the bankers told me. I would have you inquire it and prevent it, for it is a most pernicious thing. It is the goldsmiths, especially those in Lombard Street, which are the greatest merchants, and London cashiers, and who will receive any man's money for nothing, and pay it for them the same or next day, and meantime keep people in their upper rooms to cull and weigh all they receive, and melt down the weighty, and transport it to foreign parts, sometimes without melting, and keep banks for all the princ.i.p.al coin in Christendom in their shops."

The succeeding years of the Commonwealth saw little change in the situation. In 1659 and 1660 the Council was still anxiously debating the question of the transport of bullion and coin. But this chain of phenomena refers to the third period in this history, and are to be treated of in that connection.