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

by Baron Thomas Babington Macaulay Macaulay

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]