When the King had returned from the last campaign, he had supported Somers and Montague in the recoinage scheme, by which the mutilated and clipped money of the realm was to be reminted; the plan was so daring as to frighten most of the King's advisers, but Montague, having secured a certain Isaac Newton as master of the Mint, proceeded to put his plans into execution with skill and address. He was also largely responsible for the scheme of the Bank of England, which, after paying a million and a half for its charter, had enjoyed the confidence of the Government until Robert Harley and Foley revived Chamberlayne's wild project of a Land Bank. The King, anxious for money to commence the campaign and carry on the government during his absence, had passed an Act before he prorogued Parliament, establishing the Land Bank, which was to advance him two and a half millions at seven per cent.
The Tories declared that their scheme would soon ruin the earlier bank; Charles Montague thought so too, though he and most other thoughtful observers were certain that the Land Bank was an unpractical conception, a mere delusion. But the country was not with them; the country gentlemen, Whig and Tory, believed they saw an infallible way of obtaining riches, the King wanted the money too much to inquire into the means that produced it, and the Land Bank appeared to flourish while the Bank of England tottered and showed every sign of ultimate failure.
The Directors found it impossible to redeem the paper money that they had put in circulation, and that malice or necessity demanded the payment of. There was scarcely any money to be had; the mint worked day and night to turn out the new milled coin, but the moment it appeared it was hoarded by the panic-stricken public. The paper money fluctuated in value so as to be almost useless, stock jobbers caused constant scares on the Exchange, credit was paralysed, and the country was only held together by Montague's device of exchequer bills bearing a small rate of interest.
The discovery of the assassination plot and the Jacobite schemes of invasion had strengthened the King's position at home and made him as popular as he had been in '88, but it had resulted in the recall of the fleet from the Mediterranean, the renewed supremacy of the French in those waters, and the instant defection of the Duke of Savoy, thus causing the first rift in the coalition that William's unwearied skill had maintained against the arts of Louis for seven years.
He was now powerless to bribe or threaten. Early in the war Kohorn and Athlone had burnt the huge stores that Louis had built with vast expense at Givet, and France had staggered under the blow, but William was helpless to take advantage of it. The treachery of the Duke of Savoy, the state of the English finances, the general exhaustion of the allies, caused M. de Caillières, the French representative at Ryswick, to change his tone, go back from the pledge he had given that William should be recognised by Louis, and propound arrogant terms.
Meanwhile the letters from the King became desperate; only his personal influence kept the army, which was literally starving, together. He had pledged his private fortune and strained his private credit in the United Provinces as far as he could.
And the subscription list of the Land Bank at Exeter 'Change remained blank; only a few hundreds had been added to the five thousand contributed by the King as an example.
William even authorized the summoning of Parliament during his absence; but the ministers dare not risk this expedient. He then sent Portland to London to represent to the Council of Regency that something must be devised to raise money, or, in his own words to Shrewsbury, "All is lost, and I must go to the Indies."
It was Portland who now faced the three ministers in Shrewsbury's rich withdrawing-room.
These three were the Lord Keeper, Godolphin, the one Tory in the Council, and First Commissioner of the Treasury, and Shrewsbury himself, now again Secretary of State, and as devoted to the Government as if he had never, in an hour of weakness, tampered with St. Germains; he was, perhaps, of the seven Lords Justices now governing England, the one most liked and trusted by the King.