NOTES AND ILLUSTRATIONS.

THE SILVER RECOINAGE IN ENGLAND.

In 1696 the silver currency of England (the only one then in use) had become so reduced in value, from clipping and wear, as to cause the greatest inconvenience in all the operations of society. The coins in use, no matter how light, could still be used in the payment of debts and of the taxes due the government. The latter attempted for a long time to correct the evil, by causing large quantities of silver to be coined of the standard weight and fineness; but as the old coins, with one-quarter or one-fifth less of pure metal, were used as currency equally with the new, the latter were immediately taken up and melted down, or exported at their value as bullion or merchandise, so that no progress whatever was made in remedying an evil which had become well-nigh insupportable.

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"The financiers of that age," says Macaulay, in his graphic picture of it, seem to have expected that the new money, which was excellent, would soon displace the old money, which was much impaired. Yet any man of plain understanding might have known that, when the State treats perfect coin and light coin as of equal value, the perfect coin will not drive the light coin out of circulation, but will itself be driven out. A clipped crown, on English ground, went as far in the payment of a tax or a debt as a milled crown. But the milled crown, as soon as it had been flung into the crucible or carried across the channel, became much more valuable than the clipped crown. It might therefore have been predicted, as confidently as anything can be predicted which depends on the human will, that the inferior pieces would remain in the only market in which they could fetch the same price as the superior pieces; and that the superior pieces would take some form or fly to some place in which some advantage could be derived from their superiority.

"The politicians of that age, however, generally overlooked these very obvious considerations. They marvelled exceedingly that everybody should be so perverse as to use light money in preference to good money. In other words, they marvelled that nobody chose to pay twelve ounces of silver when ten ounces would serve the turn. The horse at the Tower still paced his rounds. Fresh wagon-loads of choice money still came forth from the mill; and still they vanished as fast as they appeared. Great masses were melted down; great masses exported; great masses hoarded; but scarcely one new piece was found in

the till of a shop, or in the leathern bag which the farmer carried home from the cattle fair. In the receipts and payments of the Exchequer the milled money did not exceed ten shillings in a hundred pounds. A writer of that age mentions the case of a merchant who, in the sum of thirty-five pounds, received only a single half-crown in milled silver.

"The evils produced by this state of the currency were not such as have generally been thought worthy to occupy a prominent place in history. Yet it may well be doubted whether all the misery which had been inflicted on the English nation in a quarter of a century by bad kings, bad ministers, bad parliaments, and bad judges was equal to the misery caused in a single year by bad crowns and bad shillings. Those events which furnish the best themes for pathetic or indignant eloquence are not always those which most affect the happiness of the great body of the people. The misgovernment of Charles and James, gross as it had been, had not prevented the common business of life from going steadily and prosperously on. While the honor and independence of the State were sold to a foreign power, while chartered rights were invaded, while fundamental laws were violated, hundreds of thousands of quiet, honest, and industrious families labored and traded, ate their meals and lay down to rest, in comfort and security. Whether Whigs or Tories, Protestants or Jesuits were uppermost, the grazier drove his beasts to market; the grocer weighed out his currants; the draper measured out his broadcloth; the hum of buyers and sellers was as loud as ever in the towns; the harvest-home was celebrated as joyously as ever in the hamlets; the cream overflowed the pails of Cheshire; the applejuice foamed in the presses of Herefordshire; the piles of crockery glowed in the furnaces of the Trent; and the barrows of coal rolled fast along the timber railway of the Tyne. But when the great instrument of exchange became thoroughly deranged, all trade, all industry, were smitten as with a palsy.

"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 anything 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 employed 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 account 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 coin 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 honor 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 speculative abilities united in an allegiance so close, so harmonious, and so honorable as that which bound Somers and Montague to Locke and Newton.

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“In whatever way the restoration of the coin might be affected, great sacrifices must be made, either by the whole community or by a part of the community, and to call for such sacrifices at a time when the nation was at war, and 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 everything 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 1694 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 recoinage 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, 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 an 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 authorized by law to pay a hundred pounds with eighty. Had his arguments prevailed, the evils

of a vast confiscation would have been added to 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 proposition of Lowndes was for a recoinage of the currency with one-fifth less metal than the standard of the old coins; to raise, to use his own words, "the value of the silver in the coins to the foot of 6s. 3d. in every crown, because the price of standard silver in bullion is risen to 6s. 5d. an ounce." Locke was called upon to prove, and did prove most conclusively, that silver coins only equalled in value similar weights of the metal in bullion; and, consequently, that nothing could be gained, at home or abroad, by altering the standard, as the coins, both at home and abroad, would pass only at their value measured by weight and fineness. It would seem that the conclusions to which Locke came might have been assumed as axioms from which he might have commenced his argument. If so, the statement of the question contained its own answer. Locke was not content with this. He prepared a pamphlet of more than a hundred pages in which he reënforced his argument by a wealth and conclusiveness of illustration which should have put the question forever at rest. He did, indeed, carry the government with him, but by no means the general sense of mankind.

The plan of relief finally adopted by the English government provided that the money of the kingdom should be recoined according to the old standard of weight and fineness; that all the pieces should be milled, and that the loss on the clipped pieces should be borne by the public. A time was fixed after which no clipped money should pass, except in payments to the government; and a later time after which it should not pass at all. To provide for the loss on the clipped coins, the Bank of England undertook, on the security of the window tax, to advance the government £1,200,000. This advance, however, afforded but a partial relief. Full relief could only be had when the new silver (the metal chiefly in circulation) came in in sufficient abundance to fill up the vacuum made by calling in the old.

Saturday, the second of May," (1696), said Lord Macaulay, "had been fixed as the last day on which the clipped crowns, half-crowns, and shillings were to be received by tale in payment of taxes. The Exchequer was besieged from dawn till midnight by an immense multitude. It was necessary to call in the guards for the purpose of keeping order. On the following Monday began a cruel agony of a few months, which was destined to be succeeded by many years of almost unbroken prosperity.

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"Most of the old silver had vanished. The new silver had scarcely made its appearance. About £4,000,000, in ingots and hammered coin, were lying in the vaults of the Exchequer; and the milled money as yet came forth very slowly from the Mint. Alarmists predicted that the wealthiest and most enlightened kingdom in Europe would be reduced to the state of those barbarous societies in which a mat is bought with a hatchet, and a pair of moccasins with a piece of venison. There were, indeed, some hammered pieces which had escaped mutilation, and sixpences not clipped within the innermost ring were still current. This old money and the new money together made up a scanty stock of silver, which, with the help of gold, was to carry the nation through the summer. The manufacturers generally continued, though with extreme difficulty, to pay their workmen in coin. The upper classes seem to have lived to a great extent on credit. Even an opulent man seldom had the means of discharging the weekly bills of his baker and butcher. A promissory note, however, subscribed by such a man, was readily taken in the district where his means and character were well known. The notes of the wealthy money-changers of Lombard street circulated widely. The paper of the Bank of England did much service.

"The directors soon found it impossible to procure silver to meet every claim which was made on them in good faith. They then bethought them of a new expedient. They made a call of twenty per cent. on the proprietors, and thus raised a sum which enabled them to give every applicant fifteen per cent. in milled money on what was due to him. They returned him his notes after making a minute upon it that part had been paid. A few notes thus marked are still preserved among the archives of the Bank, as memorials of that terrible year. The paper of the corporation continued to circulate; but the value fluctuated violently from day to day, and indeed from hour to hour; for the public mind was in so excitable a state that the most absurd lie which a stockjobber could invent sufficed to send the price up or down. At one time the discount was only six per cent., at another time twenty-four per cent. A tenpound note, which had been taken in the morning as worth more than nine pounds, was often worth less than eight pounds before night.

"Meanwhile, strenuous exertions were making to hasten the recoinage. Since the restoration the mint had, like every other public establishment in the kingdom, been a nest of idlers and jobbers. The important office of warden, worth between six and seven hundred a year, had become a mere sinecure, and had been filled by a succession of fine gentlemen who were well known at the hazard-table at Whitehall, but who never condescended to come near the Tower. This office had just become vacant, and Montague had obtained it for Newton. The ability, the industry, and the strict uprightness of the great philosopher speedily produced a complete revolution throughout the department which