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

by Baron Thomas Babington Macaulay Macaulay

Saturday, the second of May, had been fixed by Parliament as the last day on which the clipped crowns, halfcrowns and shillings were to be received by tale in payment of taxes. [694] 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. [695]

Most of the old silver had vanished. The new silver had scarcely made its appearance. About four millions sterling, 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. [696] 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 mocassins 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. [697] The manufacturers generally contrived, though with extreme difficulty, to pay their workmen in coin. [698] 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. [699] 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 moneychangers of Lombard Street circulated widely. [700] The paper of the Bank of England did much service, and would have done more, but for the unhappy error into which the Parliament had recently been led by Harley and Foley. The confidence which the public had felt in that powerful and opulent Company had been shaken by the Act which established the Land Bank. It might well be doubted whether there would be room for the two rival institutions; and of the two, the younger seemed to be the favourite of the government and of the legislature. The stock of the Bank of England had gone rapidly down from a hundred and ten to eighty-three. Meanwhile the goldsmiths, who had from the first been hostile to that great corporation, were plotting against it. They collected its paper from every quarter; and on the fourth of May, when the Exchequer had just swallowed up most of the old money, and when scarcely any of the new money had been issued, they flocked to Grocers' Hall, and insisted on immediate payment. A single goldsmith demanded thirty thousand pounds. The Directors, in this extremity, acted wisely and firmly. They refused to cash the notes which had been thus maliciously presented, and left the holders to seek a remedy in Westminster Hall. Other creditors, who came in good faith to ask for their due, were paid. The conspirators affected to triumph over the powerful body, which they hated and dreaded. The bank which had recently begun to exist under such splendid auspices, which had seemed destined to make a revolution in commerce and in finance, which had been the boast of London and the envy of Amsterdam, was already insolvent, ruined, dishonoured. Wretched pasquinades were published, the Trial of the Land Bank for murdering the Bank of England, the last Will and Testament of the Bank of England, the Epitaph of the Bank of England, the Inquest on the Bank of England. But, in spite of all this clamour and all this wit, the correspondents of the States General reported, that the Bank of England had not really suffered in the public esteem, and that the conduct of the goldsmiths was generally condemned. [701]

The Directors soon found it impossible to procure silver enough 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 note, after making a minute upon it that part had been paid. [702] 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. [703]

Another, and, at that conjuncture, a more effectual substitute for a metallic currency, owed its existence to the ingenuity of Charles Montague. He had succeeded in engrafting on Harley's Land Bank Bill a clause which empowered the government to issue negotiable paper bearing interest at the rate of threepence a day on a hundred pounds. In the midst of the general distress and confusion appeared the first Exchequer Bills, drawn for various amounts from a hundred pounds down to five pounds. These instruments were rapidly distributed over the kingdom by the post, and were every where welcome. The Jacobites talked violently against them in every coffeehouse, and wrote much detestable verse against them, but to little purpose. The success of the plan was such, that the ministers at one time resolved to issue twentyshilling bills, and even fifteenshilling bills, for the payment of the troops. But it does not appear that this resolution was carried into effect. [704]

It is difficult to imagine how, without the Exchequer Bills, the government of the country could have been carried on during that year. Every source of revenue had been affected by the state of the currency; and one source, on which the Parliament had confidently reckoned for the means of defraying more than half the charge of the war, had yielded not a single farthing.

The sum expected from the Land Bank was near two million six hundred thousand pounds. Of this sum one half was to be subscribed, and one quarter paid up by the first of August. The King, just before his departure, had signed a warrant appointing certain commissioners, among whom Harley and Foley were the most eminent, to receive the names of the contributors. [705] A great meeting of persons interested in the scheme was held in the Hall of the Middle Temple. One office was opened at Exeter Change, another at Mercers' Hall. Forty agents went down into the country, and announced to the landed gentry of every shire the approach of the golden age of high rents and low interest. The Council of Regency, in order to set an example to the nation, put down the King's name for five thousand pounds; and the newspapers assured the world that the subscription would speedily be filled. [706] But when three weeks had passed away, it was found that only fifteen hundred pounds had been added to the five thousand contributed by the King. Many wondered at this; yet there was little cause for wonder. The sum which the friends of the project had undertaken to raise was a sum which only the enemies of the project could furnish. The country gentlemen wished well to Harley's scheme; but they wished well to it because they wanted to borrow money on easy terms; and, wanting to borrow money, they of course were not able to lend it. The moneyed class alone could supply what was necessary to the existence of the Land Bank; and the Land Bank was avowedly intended to diminish the profits, to destroy the political influence and to lower the social position of the moneyed class. As the usurers did not choose to take on themselves the expense of putting down usury, the whole plan failed in a manner which, if the aspect of public affairs had been less alarming, would have been exquisitely ludicrous. The day drew near. The neatly ruled pages of the subscription book at Mercers' Hall were still blank. The Commissioners stood aghast. In their distress they applied to the government for indulgence. Many great capitalists, they said, were desirous to subscribe, but stood aloof because the terms were too hard. There ought to be some relaxation. Would the Council of Regency consent to an abatement of three hundred thousand pounds? The finances were in such a state, and the letters in which the King represented his wants were so urgent, that the Council of Regency hesitated. The Commissioners were asked whether they would engage to raise the whole sum, with this abatement. Their answer was unsatisfactory. They did not venture to say that they could command more than eight hundred thousand pounds. The negotiation was, therefore, broken off. The first of August came; and the whole amount contributed by the whole nation to the magnificent undertaking from which so much had been expected was two thousand one hundred pounds. [707]

Just at this conjuncture Portland arrived from the Continent. He had been sent by William with charge to obtain money, at whatever cost and from whatever quarter. The King had strained his private credit in Holland to procure bread for his army. But all was insufficient. He wrote to his Ministers that, unless they could send him a speedy supply, his troops would either rise in mutiny or desert by thousands. He knew, he said, that it would be hazardous to call Parliament together during his absence. But, if no other resource could be devised, that hazard must be run. [708] The Council of Regency, in extreme embarrassment, began to wish that the terms, hard as they were, which had been offered by the Commissioners at Mercers' Hall had been accepted. The negotiation was renewed. Shrewsbury, Godolphin and Portland, as agents for the King, had several conferences with Harley and Foley, who had recently pretended that eight hundred thousand pounds were ready to be subscribed to the Land Bank. The Ministers gave assurances, that, if, at this conjuncture, even half that sum were advanced, those who had done this service to the State should, in the next session, be incorporated as a National Land Bank. Harley and Foley at first promised, with an air of confidence, to raise what was required. But they soon went back from their word; they showed a great inclination to be punctilious and quarrelsome about trifles; at length the eight hundred thousand pounds dwindled to forty thousand; and even the forty thousand could be had only on hard conditions. [709] So ended the great delusion of the Land Bank. The commission expired; and the offices were closed.

And now the Council of Regency, almost in despair, had recourse to the Bank of England. Two hundred thousand pounds was the very smallest sum which would suffice to meet the King's most pressing wants. Would the Bank of England advance that sum? The capitalists who lead the chief sway in that corporation were in bad humour, and not without reason. But fair words, earnest entreaties and large promises were not spared; all the influence of Montague, which was justly great, was exerted; the Directors promised to do their best; but they apprehended that it would be impossible for them to raise the money without making a second call of twenty per cent. on their constituents. It was necessary that the question should be submitted to a General Court; in such a court more than six hundred persons were entitled to vote; and the result might well be doubted. The proprietors were summoned to meet on the fifteenth of August at Grocers' Hall. During the painful interval of suspense, Shrewsbury wrote to his master in language more tragic than is often found in official letters. "If this should not succeed, God knows what can be done. Any thing must be tried and ventured rather than lie down and die." [710] On the fifteenth of August, a great epoch in the history of the Bank, the General Court was held. In the chair sate Sir John Houblon, the Governor, who was also Lord Mayor of London, and, what would in our time be thought strange, a Commissioner of the Admiralty. Sir John, in a speech, every word of which had been written and had been carefully considered by the Directors, explained the case, and implored the assembly to stand by King William. There was at first a little murmuring. "If our notes would do," it was said, "we should be most willing to assist His Majesty; but two hundred thousand pounds in hard money at a time like this." The Governor announced explicitly that nothing but gold or silver would supply the necessities of the army in Flanders. At length the question was put to the vote; and every hand in the Hall was held up for sending the money. The letters from the Dutch Embassy informed the States General that the events of that day had bound the Bank and the government together in close alliance, and that several of the ministers had, immediately after the meeting, purchased stock merely in order to give a pledge of their attachment to the body which had rendered so great a service to the State. [711]

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 of Whitehall, but who never condescended to come near the Tower. This office had just become vacant, and Montague had obtained it for Newton. [712] The ability, the industry and the strict uprightness of the great philosopher speedily produced a complete revolution throughout the department which was under his direction. [713] He devoted himself to his task with an activity which left him no time to spare for those pursuits in which he had surpassed Archimedes and Galileo. Till the great work was completely done, he resisted firmly, and almost angrily, every attempt that was made by men of science, here or on the Continent, to draw him away from his official duties. [714] The old officers of the Mint had thought it a great feat to coin silver to the amount of fifteen thousand pounds in a week. When Montague talked of thirty or forty thousand, these men of form and precedent pronounced the thing impracticable. But the energy of the young Chancellor of the Exchequer and of his friend the Warden accomplished far greater wonders. Soon nineteen mills were going at once in the Tower. As fast as men could be trained to the work in London, bands of them were sent off to other parts of the kingdom. Mints were established at Bristol, York, Exeter, Norwich and Chester. This arrangement was in the highest degree popular. The machinery and the workmen were welcomed to the new stations with the ringing of bells and the firing of guns. The weekly issue increased to sixty thousand pounds, to eighty thousand, to a hundred thousand, and at length to a hundred and twenty thousand. [715] Yet even this issue, though great, not only beyond precedent, but beyond hope, was scanty when compared with the demands of the nation. Nor did all the newly stamped silver pass into circulation; for during the summer and autumn those politicians who were for raising the denomination of the coin were active and clamorous; and it was generally expected that, as soon as the Parliament should reassemble, the standard would be lowered. Of course no person who thought it probable that he should, at a day not far distant, be able to pay a debt of a pound with three crown pieces instead of four, was willing to part with a crown piece, till that day arrived. Most of the milled pieces were therefore hoarded. [716] May, June and July passed away without any perceptible increase in the quantity of good money. It was not till August that the keenest observer could discern the first faint signs of returning prosperity. [717]