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To induce Charles to declare war without waiting for his confession of Catholicism, Louis sent over Charles's sister, Henrietta, Duchess of Orleans. The king met her at Dover, and the point was discussed, but Charles would not move another step till the Treaty was formally signed, and the first payment made. The duchess, indeed, was much more earnest on her own affairs. She was most miserably married to the Duke of Orleans, the brother and heir-apparent of Louis, who treated her with cruelty and neglect for other women. She was anxious for a divorce and to live in England, but Charles would not hear of what was so hostile to his interests. The unfortunate duchess returned to Paris, and within three weeks she was a corpse, though only twenty-six years of age. There was every reason to believe that she was poisoned, though the doctors, on a postmortem examination, declared there were no signs of poison; but what was the value of the testimony of medical men given at the risk of their heads? On her deathbed, when questioned by Montague, the ambassador, as to her belief on that point, though warned by her confessor to accuse nobody, the poor woman would not say that she had no suspicions, but only shrugged her shoulders, a significant expression of her internal conviction.

The duchess left behind her in England one of her maids, a Mademoiselle Querouaille, or, as the English came to call her, Madam Carwell, whom Louis had selected as a spy and agent, feeling assured that she would soon captivate this amorous king, which she did at once, and became, in the usual way, his mistress, and at the same time maid of honour to the queen. She was soon advanced to the title of Duchess of Portsmouth, and so well did she serve the purposes of Louis, that in 1673 he gave her also a French title and estate. It was now thought by Charles and James that they could venture to put down the liberties, and, as James earnestly advocated, the religion of the nation. It was proposed to fortify Portsmouth, Hull, and Plymouth, at which towns French soldiers might be introduced, and James having the command of the fleet, no interruption to their transit could take place. When Parliament met in October, Charles observed that both Holland and France were increasing their navies—he could have told them really why—and on pretence of necessary caution, he demanded large supplies to place our own navy on a proper footing. There were complaints of prodigality and hints of Popery thrown out, but a sum of no less than two million five hundred thousand pounds was voted, by taxes on land, stock, law proceedings, and salaries—in fact, an income and property tax. There was a proposal to tax theatres, and when it was objected that the theatres contributed to his Majesty's pleasure, Sir John Coventry asked sarcastically, "whether his Majesty's pleasure lay amongst the men or the women players?"

For this remark Sir John was made to pay severely. The King and the whole Court were furious at his hard hit against the Moll Davieses and Nell Gwynns. The king declared that he would send a detachment of the Guards to watch in the street where Sir John Coventry lived, and set a mark upon him. The Duke of York in vain endeavoured to dissuade the king; the Duke of Monmouth, who was living on terms of great professed friendship with Coventry, yet undertook the execution of the business. He sent Sandys, his lieutenant, and O'Brien, the son of Lord Inchiquin, with thirteen soldiers, who waited for Sir John as he returned from Parliament on the evening of the 21st of December, 1670, and encountering him in the Haymarket, assaulted him. Sir John placed his back to the wall, snatched the flambeau from the hands of his servant, and with that in one hand he so well plied his sword with the other, that he wounded several of the soldiers, and got more credit by his gallantry than for any action in his life. But he was overpowered by numbers in the end, beaten to the ground, and then had his nose cut to the bone with a penknife, to make a mark for life, to teach him respect for the king. They then went back to the Duke of Monmouth's, where O'Brien, who was wounded in the arm, had it dressed. Coventry had his nose so well sewed up, that the trace of the outrage was scarcely discernible; but the House of Commons, even such a House, resented this dastardly attempt on one of its members, and it passed an Act making it felony without benefit of clergy to cut or maim the person, and banishing for life the four principal offenders unless they surrendered before a certain day, as well as rendering the crime incapable of pardon, even by Act of Parliament. But Monmouth and his assistants got out of the way, and the Parliament never had the virtue to enforce its own Act.

The year 1671 was chiefly employed in preparing for the war with Holland. Though Charles was under condition to become an avowed Roman Catholic, he published a proclamation, declaring that, as he had always adhered to the true religion as established, he would still maintain it by all the means in his power. De Witt, who was aware of what was going on, hastened to make a treaty with Spain, and Louis demanded a free passage through the Netherlands to attack Holland, or declared that he would force one at the head of sixty thousand men. Whilst war was thus impending, the Duchess of York, Hyde's daughter, died. She had been for some time a professed Catholic. Henrietta Maria, the mother of Charles, had died in August, 1669, at the Castle of Colombe, near Paris.

Charles and his ministers of the Cabal bribed by Louis (who even pensioned the mistress of Buckingham, Lady Shrewsbury, with ten thousand livres a year) prepared to rush into the war against Holland in the hope of retrieving past disgraces, and securing some valuable prizes. At the close of the last session, on pretence of maintaining the Triple Alliance, the very thing they were intending to betray, and of keeping Louis of France in check, whom they were, in fact, going to assist in his aggressions, they procured eight hundred thousand pounds from the Commons, and then immediately prorogued Parliament. But this most unprincipled trick was nothing to what they were preparing to perpetrate.

During the recess of Parliament, it was suddenly announced by proclamation on the 2nd of January, 1672, that the Exchequer was shut. To understand what was meant by this most flagitious act, we must recollect that Charles was in the habit of anticipating the supplies voted, by borrowing of the London bankers and goldsmiths, and granting them some branch of revenue to refund themselves with interest. He had at this time obtained one million three hundred thousand pounds in this manner, but calculating that the Dutch war could not be carried on without larger means than the recent Parliamentary grant, it was therefore announced that Government was not prepared to repay the principal borrowed, or, in other terms, could not grant the annual security of the incoming taxes, but the lenders must be content with the interest. This would enable the Government to receive the revenue themselves instead of paying their just debts with it. The consternation was terrible. The Exchequer had hitherto kept its engagements honourably, and had thus obtained this liberal credit. The lenders, in their turn, could not meet the demands of their creditors. The Exchange was in a panic, many of the bankers and mercantile houses failed, a great shock was given to credit throughout the kingdom, and many annuitants, widows, and orphans, who had deposited their money with them, were reduced to ruin. Ashley and Clifford were said to have been the authors of the scheme, but Ashley was a man of infinite schemes, and probably was the original inventor. Government declared that the postponement of payment should only be for one year; but the greater part of the money was never again repaid, and this sum so fraudulently obtained became the nucleus of the National Debt.

The manner in which the Government commenced the war on Holland was characterised by the same infamous disregard of all honourable principle. Though Charles had bound himself to make war on the Dutch, he had no cause of quarrel with them, whatever he pretended to have. When Louis menaced them with hostilities, Charles offered himself as a mediator, and the Dutch regarded him as such. Under these circumstances he sent Sir Robert Holmes with a large fleet to intercept a Dutch fleet of merchantmen coming from the Levant, and calculated to be worth a million and a half. Holmes, in going out, saw the squadron of Sir Edward Spragge at the back of the Isle of Wight, which had lately returned from destroying the Algerine navy; and though his orders were to take all the vessels along with him that he could find at Portsmouth, or should meet at sea, lest Spragge should obtain some of the glory and benefit, he passed on and gave him no summons. The next day he descried the expected Dutch fleet; but to his chagrin he found that it was well convoyed by seven men-of-war, and the merchantmen, sixty in number, were many of them well armed. The vast preparations of Louis, and some recent movements of the English, had put them on their guard. Notwithstanding Charles's hypocritical offers of friendly mediation, he had withdrawn the honourable Sir William Temple from the Hague, and sent thither the unprincipled Downing, a man so detested there, that the mob chased him away. Van Nesse, the Dutch admiral, successfully resisted the attack of Holmes, who only managed to cut off one man-of-war and four merchantmen. The chagrin of Charles was equal to the disgrace with which this base action covered him and his ministers. Both his own subjects and foreigners denounced the action in fitting terms, and Holmes was styled "the cursed beginner of the two Dutch wars."

There was nothing now for it but to declare war, which was done by both England and France. Charles mustered up a list of trumpery charges, which, bad as they were, would have come with a better grace before attacking his allies without any notice—the detention of English traders in Surinam; the neglect to strike the Dutch flag to him in the narrow seas; and refusal to regulate their trade relations according to treaty. Louis simply complained of insults, and declared his intention to assert his glory. Under such thin veils did Louis and his bond-slave Charles attempt to hide their real intentions.

The Dutch fleet was not long in appearing at sea with seventy-five sail under De Ruyter. On the 3rd of May the Duke of York, admiral of the English fleet, consisting of only forty sail of the line, descried this powerful armament posted between Calais and Dover, to prevent his junction with the French fleet. He managed, however, to pass unobserved, and join the French squadron under D'Estrées, La Rabiniere, and Du Quesne. On the 28th they came to an engagement near Southwold Bay; the battle was terrible—scarcely any of these sanguinary conflicts of those times with the Dutch more so.