Christopher Hollis
Two Nations

Ch. II. — The Failure of the Stuarts

Income falling, expenditure rising — that was the situation which Elizabeth bequeathed to her successor, James I.  The price-level stood at about 275 to 1542's 100.  There was no possibility of reducing prices by any substantial amount, but at least it should have been the object of James's policy to have prevented a further increase in them.  In this he failed.  In Elizabeth's reign a high proportion of the silver that had come into the country had been used for domestic and not for monetary purposes.  But the effect of her reduction of the silver content of the shilling in 1601 was, of course, to increase the sale price of silver.  The result was that for the next ten years the owners of plate were in a steady stream bringing their plate to the Mint and having it turned into coin.  Clearly James should have raised the Mint charges so high as to have made it unprofitable for silver to be brought in.  He did not do so.  The result was that between 1601 and 1611 there was a great increase of money in circulation, a gross inflation, and consequent rise of prices to between 400 and 500.

During the last fourteen years of James's reign there was, it is true, little minting of new silver, but clipping of the old coins was proceeding at a rapid rate.  Throughout the whole of English history the clipper had been steadily at work, but, so long as the price-level was kept stable, he preserved some discretion in his activities, knowing that it was he who would be blamed if that stability was upset.  At a time when that stability was already notoriously upset by other causes, he felt secure from risk and able to throw all discretion to the winds.  In these years and in the first years of Charles I's reign good new silver was coined in large quantities in accordance with an arrangement by which a third of the Spanish silver from America for use in the Netherlands was coined in London.  No sooner were the new coins issued than they were clipped.  As a result, by James's death the price-level was up to 550.

Thus it is easy to see that Charles I was the inheritor of a situation that was already utterly incapable of solution.  By no wriggle of arithmetic is it possible to pay off a debt of 5½d. when you possess only 1d.  It was that which Charles spent the last sad half of his life in trying to do.  Had the problem been merely a financial problem, Charles would have appealed to the Parliament and said to them, "Gentlemen, the situation has changed from that which existed in my predecessors' time through faults that are neither mine nor yours.  We must therefore have a New Deal.  If you wish me to be your King, will you please endow me with capital sufficient to give me an income so that I can carry on the government?" If they refused to do that, the alternative was that the King should be dependent upon annual Parliamentary grant for his income — that is to say, what was later to be known as Parliamentary Government.

Unfortunately the situation was complicated.  There was a powerful party which wanted not to solve the difficulties but to take advantage of them in order to prevent the institution of monarchy from working in its historic fashion.  Between the King and the Puritan party, which was powerful in Parliament, there was the unbridgeable gulf of religious difference.  The King's conscience would not permit him to allow Puritanism to dominate England, nor would the Puritan conscience allow such a domination to the King's Anglo-Catholicism.  There was then, after every twist and evasion had been tried, no alternative in honour but to fight the matter out to the death.

Unfortunately, as so often happens, victory in war settled little.  The killing of the King did nothing to bring down prices.  Cromwell, inheriting the power of Charles, inherited also the expenses of his Government.  He had in addition the expense of the upkeep of a large standing army.  The dishonesty of the Parliamentarians, who had ascribed to extravagance and tyranny Charles's demand for money instead of explaining that that demand was an inevitable result of circumstances, recoiled on the head of Cromwell, their only important survivor, and made it impossible for him to put forward a demand for high taxes without forfeiting all popularity.  He dared not disband the army until he had obtained some popular support for his rule, and, the longer that he continued to rule through the army, the more unpopular his rule became.  Caught in an insoluble dilemma, he dragged out his miserable days.

Cromwell's rule was opportunist, and under it no attempt was made to recapture for sovereignty that control of the price-level, without which any plan for the reform of the nation's financial arrangements was foredoomed to failure.  The problem now was the problem of the clipper.  New supplies of the precious metals from America were no longer coming into the country to any important extent.  On the other hand, the busy clipper was increasing the monetary supply too rapidly for productivity to keep pace and was forcing up prices.

The first need for the day was then for a method of circumventing the clipper.  In 1649 there arrived in England a Frenchman, Pierre Blondeau, equipped with an invention for coining milled edge coins, which was already in use in France and which would effectually make clipping impossible.  A Parliamentary committee examined his plan and reported favourably on it.  For seven years, however, the Government on one excuse and another delayed adoption.  The reason for this delay Blondeau explained without hesitation in an angry pamphlet which he issued.  It was that not only were there clippers abroad throughout the country but that the very officers of the Mint issued the new coins light of weight and pocketed themselves the profits of their roguery.  Blondeau's machine would have prevented the possibility of this theft, but the officers of the Mint were strong enough to raise petty difficulties and prevent its adoption.  At last in 1656 he was able to get leave to stamp some new coins, but Cromwell, "probably for political reasons," says Mr. Feaveryear,(7) decided at the last moment not to issue them and Blondeau retired in disgust to France.

In 1660 Charles came in and the great issue had at last to be fought out.  The situation was as follows.  Charles was not brought back to be a king in the sense in which any of his predecessors had been kings.  The old theory of the monarchy had been that the King should possess sufficient capital to give him an income which would enable him to carry on the government of the country in normal times.  In abnormal times he appealed to the people to help him by the supplement of taxation.  The new theory of the monarchy was that the King should have no capital of any importance and should be entirely dependent upon a regular income, voted to him by Parliament who would thus be able to control his conduct.  In practice Parliament took care to vote him an insufficient income so as to compel him to contract debts.  Charles's policy, on the other hand, was to come back to the throne on what terms he could and then to find some means by which he could trick those who had restored him and escape out of their clutches.

He very nearly succeeded.  It was the age of the first rumours of invention.  The roads were open for the development of commerce.  Once therefore, that the country settled down to peace after the disturbances of the last twenty years, there was an opportunity for a very great expansion of productivity.  Obviously then, if the goods in circulation were going to increase, it would be possible to increase the money in circulation in proportion without any change in the price-level.  How was that increase to be effected?

As has been said, the influx of precious metals had by now ceased.  The monetary-supply, so far as it was increased, was now being increased by the activities of the clippers.  Clearly Charles's first task was to put a check on these activities.  Therefore he called back Blondeau from France and made him Engineer of the Mint.  In future only milled-edged coins were to be issued.  It is true that that was not an immediate and total solution of his problem.  To solve the problem he should clearly have called in all the old clipped coins and issued in their place new milled coins of the average de facto weight of the old coins, declaring that, after such and such a date, the old coins would no longer be legal tender.  He did not do that, with the result that the new coins got melted down by the clippers and made up again into a larger quantity of "fake-antique" coins of short weight.  The melting of them was illegal but it was a law which it was impossible to enforce.  Yet clearly Charles had discovered the remedy and was only waiting the convenient opportunity of properly applying it.

Having thought of a way of preventing the clipper from increasing the country's monetary-supply, Charles had next to find a way of issuing that increased supply himself and for his own benefit.  His remedy was paper-money.  Clearly, the more that he could reduce the quantity of gold and silver in the country, the larger the gap which Charles could fill with his paper money without causing that rise in prices, which would of course discredit the experiment.  How could he get gold and silver out of the country ?

It has been explained how in the sixteenth century the trade between Spain and England was peculiar in that it was a trade not of goods against goods but of goods against money.  In Charles's time there was growing up another such trade — peculiar this time in the opposite direction — the trade between England and India.  The Indian had not as yet developed any considerable taste for English or European goods; on the other hand, he loved the precious metals simply for their own sake.  Therefore the trade between England and India was, to a large extent, one of the exchange of Indian goods against English money.  It was estimated, according to Davenant(8) at the end of the seventeenth century, that the gold and silver "carried away and sunk in the East Indies" amounted to £150,000,000.

According to Davenant and to the conventional bullionist opinion, which considered the object of trade to be the acquisition of as large as possible a stock of precious metals, this trade was a loss.  Europe, he said, would "be richer by full one third if that trade had never been discovered."  But to one who looked on economic problems with a gaze free from confusion the Indian trade was a trade of pure gain to England.  We got from the Indians consumable goods which we wanted; we gave them in return useless gold and silver which we did not want and whose place in our internal economy could be supplied by paper money which cost us nothing.  Therefore Charles very reasonably removed the restrictions on the export of bullion and encouraged the East India Company by all the means in his power.  Throughout his reign it flourished exceedingly, and the shares which had stood at 100 at his accession had risen by his death to 300.

In that way he made as large as possible the gap which his paper money was to fill.  Now let us understand how it was that he issued that paper money.  He did not venture merely to issue Treasury notes, as the Government issued them during the late War.  Public opinion would not have been prepared for that.  His plan was more subtle.  In every age of the world's history there has been a certain amount of trading on credit.  That is to say, A is willing to buy an article from B but has not for the moment the cash ready at hand.  B therefore sells him the article in return for a promise to pay, made out in one form or another, at some future date.  Such credit-trading has, I say, existed in every age and in every country and, naturally enough, it always grows more common in a period of disturbance when physical obstacles often separate a man from his cash.  Therefore it had been widely used in the years before Charles's accession.  People were used to it.  The essence of it was that the seller always got paid in real cash eventually.(9)

Charles was in debt, and it had been his habit, just as it had been that of his predecessors, to issue to his creditors tallies, or notched pieces of wood, which the creditors re-presented when the taxes came in and in return for which they then received the cash due to them.  Charles conceived the plan of making these tallies negotiable and later, since pieces of wood were not convenient for this purpose, he paid his debts in negotiable paper orders instead.  That is to say, these paper orders — which, of course, cost him nothing — were to count as money up to such and such a date.  They were to be accepted in the shops, to be legal tender for the discharge of a debt and so on.  When the given date came, then whoever found himself in possession of them could bring them to the Treasury and exchange them for cash.

"Why was this of such importance," it may be asked, "if the King was going to pay cash in the end ?  He was merely postponing the payment of his debt — just like anyone else who gives an IOU for his debt instead of paying cash down."  That was, of course, what he wished people to say.  The experiment was important for this reason.  According to Charles's system each particular holder of a paper order would, it is true, at some future date be able to exchange it for cash and thus have a feeling of security, which, in the temper of the times, a purely paper currency could not perhaps have given him.  But at any given moment there would be a considerable amount of paper money in circulation.  Thus a creditor, to whom Charles owed money on 1st January, 1667, was given a paper order which could be turned into cash by whoever chanced to be in possession of it on 1st January, 1668.  But on 1st January, 1668, the King would issue a new set of paper orders which would run current until 1st January, 1669, and so on.  It was not intended that there should ever come a day on which all the outstanding paper orders should be redeemed.  The process was like that of emptying a cistern into a bath, to take a metaphor which Professor Soddy has used to illustrate a different point.  Every drop of water that leaves the cistern and enters the pipe in time comes out of the cistern into the bath.  But at any given moment the quantity of water in the bath is less than the quantity that has left the cistern by the quantity in the pipe.

Doubtless, had the experiment succeeded, Charles would gradually have lengthened the period to elapse before redemption.  By lengthening and shortening the period in accordance with the demands of the price-level he could have regulated the monetary supply in exactly the same way as that in which President Roosevelt regulates it to-day by unbalancing his budget.  Eventually, no doubt, he would have issued the orders, frankly as paper money, accepting a vague obligation to convert into gold and silver on a demand which he had discovered from experience to be very rarely made.  In fact, as Dr. Shaw, the greatest authority on the subject, points out,(10) the orders would have performed all the functions that were in the next century to be performed by the privately issued banknotes.  They would have played in history a part much more important than that of temporarily relieving the financial embarrassments of a harassed monarch.  For the vastly increased productivity of the next two hundred years were to necessitate a vastly increased monetary supply.  By a strange anomaly private persons were to be permitted to invent that money and put it into circulation in the form of loans.  Nor is it any paradox to say that that anomaly is the cause of the greater part of the evils that have since afflicted mankind.  Had Charles's experiment succeeded, had it come to be recognized that, when new money was required, it was the business of the King to issue it, the whole history not only of England but of the world must necessarily have been changed.

Now why did Charles's experiment fail ?  Let us first understand who exactly was interested in its failure.  It has been said that the proclaimed theory of the Restoration of 1660 was to restore a King dependent upon taxation voted by Parliament for the expenses of government.  That was the theory.  But in practice from the first year of the Restoration Parliament refused steadily to vote the King a sufficient income, while of the £1,200,000 which it voted he never in fact received more than £800,000.(11) The legend that Charles's extravagance was to any important extent responsible for the insufficiency of his income has been quite exploded by the researches of Mr. Bryant.  Parliament refused to vote Charles sufficient taxes — some of its members because they were ill-read squires with a natural dislike of taxation and of an understanding incapable of comprehending the consequences of unbalanced budgets, others because they understood those consequences only too clearly.  They were consequences which would be, they reckoned, directly or indirectly to their own advantage.

It was clear that, if Parliament would not vote Charles the necessary money then he must either get that money by some trick or windfall or else he must borrow it from the owners of gold and silver.  The price of such loans would be, in the end, the passing of the control of policy away from either King or Parliament into the hands of the money-lenders.  It was in an effort to avoid that consummation that Charles made his experiment with paper money, just as it was for the same purpose that he afterwards accepted the gold and the silver of Louis XIV.

It is hard to form a just judgment of the monetary problems of this reign unless we bear in mind the balance-sheet of it which Dr. Shaw drew up.  "With our modern system of annual budgets," writes Dr. Shaw,(12) "estimates and supplementary estimates, we are so far removed from this seventeenth century practice and theory that we cannot conceive it possible.  It is this want of proper sense of historical perspective that has produced the accepted Whig view of Charles II's reign — a view which is as mean in its psychology as it is gross and palpable in its ignorance.

Rough Balance-Sheet As Between Charles II And His Parliament

In his ordinary revenue (including interest) Charles was cheated by his Parliament on the whole reign roughly ......... £4,432,000
In the extraordinary or war revenue Charles was cheated by his Parliament —
On the 1st Dutch war .......... 1,500,000
On the 2nd Dutch war ............ 100,000
On the thirty ships
On the intended war with the French King and the disbandment ..... 180,000
..................... £6,212,000
How the Deficit was made up.
Rendition of Dunkirk ....... £290,000
Queen Catherine's dowry ......... 180,000
French King's money ........... 742,000
Bankers' debt .......... 2,000,000
Crown lands sold .......... 1,000,000
Departmental debts and debts at interest resting on the executive at the death of Charles ..... 2,000,000
.................................... £6,212,000

"Even and quit.

"Requiescant in pace et Parliamentum suum fide Rex lissimum."

It is easy enough to see why the owners of gold and silver are always anxious for it to appear that it is not possible to maintain a stable price-level with a non-metallic currency.  But it is important, too, to understand who were at that time the owners of the gold and silver.  Doubtless the little clipper was working for Charles's defeat, but the real business of clipping and melting was in the hands of the big London goldsmiths, now for the first time emerging also as bankers or money-lenders.  "The bankers," explains Clarendon,(13) "did not consist of above the number of five or six men, some whereof were aldermen and had been lord mayor of London.... They were a tribe that had risen and grown up in Cromwell's time.... They were for the most part goldsmiths."  They had first gained their riches by supplying Cromwell's "wants of money upon great advantages."  The names of the two best known were Viner and Backwell.

Yet they themselves were as yet hardly masters in their own houses.  The financial centre of the world at that date was Amsterdam.  "I believe there is at this day," writes a correspondent from Amsterdam in 1652,(14) "forty times more gold and silver in the Low Countries than in England."  We must not, of course, attach any importance to the figure "forty," but the sentence was substantially true.  Seventeenth-century Holland, like nineteenth-century England, was a comparatively high-wage country, whose financiers were anxious to export their capital to lower-wage countries where it would earn a larger dividend.  England was, in the circumstances of the time, such a country.  The Dutch, wrote Child(15) about this time, "give generally more wages to all their manufacturers by at least twopence in the shilling than the English."  As a consequence, interest rates in England were higher than in Holland.  There was a difference, says Barbon,(16) of 3 per cent, and right back in James I's time the plea that it would cause a flight of foreign capital was already being used as an argument against the reduction of English interest-rates.  "This will draw much money out of the country, the Dutch having much here," was the argument against the reduction of the legal rate to 8 per cent.(17) During the Civil War some of the Dutch capital was withdrawn, but it returned after the Restoration.  It was stated that London after the Great Fire was largely rebuilt with Dutch capital.(18) In 1669, the very time when Charles was making his experiments with paper money, a Parliamentary committee was being told(19) that "Alderman Bucknill had above £100,000 in his hands, Mr. Meynell above £30,000, Mr. Vandeput at one time £60,000, Mr. Dericost always near £200,000 of Dutch money lent to merchants at 7, 6 and 5 per cent when money was at 8 per cent."  That is to say, the London goldsmiths, who play so large a part in the story of Restoration England, were to a very great extent mere agents, operating with Dutch money.

Now why did Charles's experiment fail? and how did it fail ?  It was not that the price-level got out of hand.  There was no rise in prices.  Charles did not issue an excess of paper money, but he did on the other hand make the blunder of only issuing his paper orders for large sums.  This meant that the recipient of them naturally, as a rule, wanted to change them.  The bankers — the goldsmiths — offered to change them.  In return for Charles's orders they gave to their clients their own notes, or "promises to pay" in smaller denominations.  These "promises to pay" they professed themselves willing to change into cash on demand, and on the strength of that profession charged a heavy discount on Charles's "promises to pay" in the future.  At the same time they did all that they could to persuade their clients that it would in practice be foolish of them to bother to change their notes into cash.

Now by refusing to make the exchange except at a large discount the goldsmiths were able to bring Charles's orders into a certain discredit.  Thus in the year 1672 — in the middle of the Dutch War — Charles, saddled with heavy expenditure which Parliament refused to meet out of taxation, found his creditors reluctant to accept more of their payments in paper orders.  Therefore he said most reasonably that, since it was the goldsmiths who were the cause of that reluctance, it must be they who should be inconvenienced rather than the whole country suffer by defeat in war, by defeat at the hands of those who were in fact the goldsmiths' paymasters.  He therefore postponed for a year his repayment of his past debts to the goldsmiths and announced that the taxes as they came in would entirely be devoted to current needs.  An exception was made for the paper orders that were in the possession of contractors, suppliers of stores, or servants; they were to be redeemed.  Of those in possession of bankers the redemption was to be postponed.  On the other hand the debt was not repudiated.  On the contrary the King promised to repay the principal as soon as possible and in the meanwhile to pay 6 per cent interest.

However, the news of the exchequer's stoppage made the holders of the goldsmith's "promises to pay" wonder if the goldsmiths really were in possession of the cash for which they had issued those promises.  They went to the goldsmiths and demanded their cash.  Of course the goldsmiths had not got it, for they had been promising to pay cash on the King's orders to the extent of ten times what they possessed.  According to Sir Dudley North,(20) a banker, then as now, who owed £10,000, seldom kept more than £1,000 in his vaults.  Therefore they had, of course, to suspend payment.  In 1667, when the Dutch had been up the Medway, there had been talk of a run on the banks, and they had had to postpone payment.  Thus Pepys, under the date of 14th June, 1667, "So to the office after dinner; and thither comes Mr. Pierce who tells me his condition, how he cannot get his money, about £500 (which he says is a very great part of what he hath for his family and children) out of Viner's hand; and indeed it is to be feared that this will wholly undo the bankers."  However, the King had then come to their rescue by pledging his word to the punctual repayment of their loans.  For up to that time they had only lent on to the King cash that had been deposited with them by their clients — or at least so they were able to pretend.  By 1672 they had developed quite a new technique.  They had lent to their clients "promises to pay" which they knew themselves unable to make good and were taking interest on them as if they were loans of cash.

So in 1672 they smashed.  A large number of poor people, of course, suffered as they always do from bankers' inability to perform their promises.  But the whole story dealt no murderous blow to the country's prosperity, for immediately afterwards — in 1674 — a movement of unexampled trade expansion began.  The Customs receipts rose; credit steadily improved, and this improvement continued for the rest of the reign.  Yet suffering had been caused and there was blame to be awarded.  But it was clear to one who properly understood what had happened that the bankers were far more deeply to blame than Charles.  Charles, at the worst, was guilty of a somewhat slick exploitation of public stupidity.  He did not deceive people about what he was doing; he confessed it frankly, possibly a little hoping that they would be too stupid to follow.  But the bankers had been guilty of the far greater fault of giving promises which they knew themselves unable to redeem.

To-day we take it for granted that that is what bankers do, but at that date it was not yet frankly admitted that bankers lent out beyond their cash-holdings.  Men like Sir Dudley North, when they let the cat out of the bag, were revealing a trade secret.  It was, however, beginning to be widely suspected that they did so.  And to allay suspicions the Bank of Amsterdam, then the leading bank of the world, every year allowed its vaults to be examined by municipal officials, who then deposed on oath that they had found there cash equivalent to the bank-notes in circulation.  Yet it was so manifestly to the advantage of the shopkeepers and burghers of Amsterdam that the city should keep its position as the world's financial capital that the depositions of the officials were not widely believed.  At this very date, 1672, there was therefore in face of the French threat a danger of a run on the bank.  To check this the magistrates took any depositors who wished into the bank's vaults and showed them its stores of cash untouched, a form for every form bank-note that was on issue.  How exactly this clever piece of window-dressing was arranged has never been quite discovered, as it is certain that the Dutch did lend well beyond their cash-holdings.  Yet it was effective in strengthening public confidence in bankers.  It was vital for them that, at this very moment when the Dutch bankers had bluffed with unhoped-for success, the English bankers should not let the cat out of the bag.(21)

Up till now the English bankers had on the whole been on the King's side in politics.  But they could no longer afford the luxury of a preference.  Somebody was going to be blamed for the crisis of 1672 and, if it was not to be the bankers, the only alternative was that it should be the King.  Therefore from now on they had two objects — the first, to weaken the monarchy politically so as to make sure that it did not strengthen itself financially — the second, so to confuse the public over the story of 1672 that they should think that it was the King and not the bankers who was responsible for their sufferings and thus to divert public attention from inquiry into what it was that they were doing.

This is not the place in which to trace through the fascinating but intricate story of the duel between Charles and Shaftesbury with which the rest of Charles's reign was filled.  It was a complex multitude of causes which went to build up that Whig mentality which was prepared to use every weapon to prevent a revival of the ancient monarchy.  But it is notable that whereas Shaftesbury had been a member of Charles's ministry at the time of the experiment of paper money and whereas in the early years of the reign the bankers had given their support to a King whom they fondly imagined would be as putty in their hands, now that Shaftesbury went into opposition it was from the financial interests and the City of London that he found his support.  It was necessary to clip the King lest the King should stop them from clipping the coins.

Whoever was deceived by the confusions of the times, there was one clear mind, among the clearest that has ever given itself to the study of English politics, to whom every move in the game lay patent and exposable.  The whole story can be read to-day in the great verse of John Dryden, the first man clearly to comprehend that necessary battle between monarchy and money-power with which all subsequent history has been filled.  The object of Shaftesbury and the City of London was, as he wrote in the Medal [228-9] with characteristic wit and truth,

"Perhaps not wholly to melt down the King
But clip his legal rights within the ring."

Their desire, as he explains in Absalom and Achitophel, was for a disputed succession, for with two claimants to the throne, the one to be played off against the other, there would be no risk of a revived monarchy ever challenging, as Charles was challenging, the Whigs' right to rule.  Dryden explains the reason why Shaftesbury supported the cause of Monmouth.

"Not that he wished his greatness to create,
For politicians neither love nor hate,
But for he knew his title, not allowed,
Would keep him still depending on the crowd."  [Part i, 222-5]

Shaftesbury had united behind him a motley following of people who were ready

"For several ends to serve the same design."  [Part i, 501-8]

Among them were those who

"for interest sought to embroil the state
To sell their duty at a dearer rate
And make their Jewish markets of the throne,
Pretending public good to serve their own.
Others thought kings a useless, heavy load
Who cost too much and did too little good.
These were for laying honest David by
On principles of pure good husbandry."  [Part i, 494]

And in all the incomparable portrait-gallery of that great poem there is no picture more living nor more damning than that of Slingsby Bethell [Part i, 585-632], the sheriff of the City of London,

"Shimei, whose youth did early promise bring
Of zeal to God and hatred to his King."

He had spent his youth, said Dryden,

"heaping wealth by the most ready way
Among the Jews — which was to cheat and pray,"

and now, even in maturity,

"If any leisure time he had from power. —
Because 'tis sin to misemploy an hour —
His business was by writing to persuade
That kings were useless and a clog to trade."

Bethell had, as it happened, written a treatise on the Interest of Princes and Stales, advocating free trade and attacking monarchies, but it is characteristic of Dryden's peculiar felicity to bring against Shimei the accusation that is not only true of Bethell in particular but also true of all the tribe of Shimeis in general.

"Their business was by writing to persuade
That kings were useless and a clog to trade."

It would be hard to think of any words that could more aptly hit off the whole business of Whig political teaching, then just coming into being and to rule England for a hundred and fifty years.

Yet it was a paradox in Charles II's England, for so far had that King been from proving himself a "clog to trade," that trade had flourished under his rule as it had never flourished before.  The Customs duties,(22) for instance, which in 1661 yielded only £260,000, in 1685 had risen to £800,000.  It was indeed this very increase in productivity which made possible that increase of money, the issue of which the City interests were scheming to get completely into their own hands.  But of that, according to their campaign, nothing must be said.  It must instead be put about that a monarchy was of its nature irresponsible and unfit to be trusted with the nation's monetary-supply.  No credit must be given to the King for the increase of the country's trade; the whole blame for the temporary crisis of 1672 must be placed upon his shoulders.

proceed !


7. Pound Sterling, Feavearyear, p. 86.

8. Worhs (ed. 1771), i, 91.

9. There is, it is true, another sort of credit-transaction in which B gives the article to A in return for a promise from A to supply an article of equal value at some future date. In such a transaction, of course, the promise is cancelled when the second artic'e is delivered and no cash ever changes hands at all. The cash value is merely a measure.

10. Introduction to the Volume of Treasury Books in the State Papers.

11. Charles II, Bryant, p. 139.

12. Calendar of Treasury Books, vol. vii, part i.

13. Life of Edward, Earl of Clarendon (ed. 1827), iii, 7.

14. Calendar of State Papers, Domestic Series, xxiv, 21.

15. A New Discourse of Trade (4th ed.), pp. x-xi.

16. A Discourse of Trade (1690), 33, 84-5.

17. House of Commons Journal, i, 679.

18. Hist. MSS. Comm., part i, 134.

19. Ibid.

20. Discourses upon Trade (1691), 21.

21. Holland, Thorold Rogers, pp. 223, 224.

22. Jacobite Movement, Petrie, p. 37.