ENGLAND AND THE NETHERLANDS IN 1537
No recoinage, however, or change in the Mint rates, occurred for some years, and it must be taken asprimâ facieevidence that the basis of 1527 continued for some years efficient, and witnessed a steady growth in the circulation, accompanying a steady expanse of trade and prices. In 1535, however, complaints were again heard of the conveyance of coins out of the realm, and on the 15th July a proclamation was issued against it. This movement is perfectly well authenticated. On the 10th of May 1537, Hutton, writing from Brussels to Thomas Cromwell, says: "Goldwas formerly carried out of the realm [i.e.of England] for gain; now great sums are sent hither [i.e.to the Netherlands] in sterling groats [i.e.in silver]. This will both diminish the coin at home [i.e.in England] and injure the sale of cloth, for here are but three sorts of money current—crowns of the sun, sterlinggroats, and 'Riders Gelderus' coined in Guelderland." On the 6th of August the same hand writes, again from Brussels: "Exchange is stopped, and much money like to be conveyed over [i.e.hither], though all coins should be called down here.... The act made for money will stop the [English] trade in kerseys, and great sums will be conveyed out of the realm [of England to the Netherlands]."
That the flow-out of gold in 1526 should change into a flow-out of silver in 1539 was simply due to thealteration of the continental ratio. The relatively great depreciation of silver only begins in 1550. Up to that time the general trend of the two metals was on level lines, but with occasional traces or evidence of an appreciation of silver or relative depreciation of gold. At such a moment the lower-rated,i.e.cheaper, English silver inevitably tended to flow out in the very teeth of searchers and legislators. At almost the same time—and as showing at once how international this trade in money or "finances" was, and how confused, and conflicting the monetary system of Europe was, with a flow-out in one direction and a flow-in from another—the English merchants at their Calais Fair reported great gain of the precious metals. "We have very good sale of clothes," writes a merchant to the King on the 27th August 1538; "here is great plenty of money, which causes all wares to be dear. Your subjects will bring back above £3000 sterling inangelsandducats. We seek all theangelshere and give a penny in the piece to have them to carry home, so that I trust there will be few left here in a short time."
THE CURRENCY MEASURES OF 1544
The threatened rise of monetary denomination on the part of the Netherlands was accomplished by their ordinance of 15th April 1539, and almost immediately Henry found himself necessitated to change the basis of his currency from that established in 1527. In 1542 the silver penny was reduced from 101⁄2to 10 grains, and shortly after 1544 the angel was advanced from 7s. 6d. to 8s. The proclamation which enforcedthe change is dated 16th May 1544. Gold was raised from 45s. to 48s. the oz., and silver from 3s. 9d. to 4s. In the purchase price of the two metals, therefore, there was no change in the ratio, but calculating on the basis of the issue price,i.e.the pieces issued from the Mint, the alteration of ratio was from 1159⁄220to 1010⁄23. In the proclamation the change was attributed to "the enhancement of the prices of these metals beyond the sea, as well in Flanders as in France, which would have drawn all the coins out of the realm if a remedy had not been applied. And although the customers of the ports of the kingdom had been ordered to put in execution the statutes for the conservation of the coins, yet for the great gain they were still secretly carried abroad."
The coinage measures, therefore, of the year 1544, when justly considered, do not possess the aspect which has been generally attributed to them. It is incorrect to look upon them as the tentative beginning of that debasement of the coinage which disgraced the later years of the reign of HenryVIII.and the days of his son EdwardVI.The measures of 1544 were simply acts of justifiable self-defence and currency safeguard. The real debasement began two years later, in 1545-46, when, by indenture, the silver coins (testoons) were reduced from 10 oz. to 4 oz. fine silver, the 2 oz. of alloy in the former case being increased to 8 oz. in the latter. In 1550 the content of fine silver in the testoon was further reduced to 3 oz.
The plan of this history makes it incumbent to treat questions of debasement as standing apart from the subject-matter of the book, which is restricted to the natural and normal ebb and flow of the precious metals, due to the action of bimetallic law. The operation of debasing a coinage—of lowering it, that is, so far and so arbitrarily as to remove it at once from the action of natural law of prices ruling around—means an arrestation of natural economic processes and laws, and the events which follow thereupon stand apart from such laws and ought to be treated as so separate. In reality, debasements always favoured the action of this malignant bimetallic law, and the fact might possibly lead one to attribute to the normal action of a natural law what is in three-fourths of it due to arbitrary action of government.
It would be, therefore, unfair to treat of debasements in a history of bimetallism.
Given, however, the above standpoint, and mental reservation of deduction and innuendo, it is permissible to treat of this debasement as showinghoworin what waya debasementdoes actuallyfacilitate the malignant action of bimetallic law.[14]Further, the presentinstance of debasement is the only one on record in English currency history, and the testimonies regarding it are of extreme interest.
THE TUDOR DEBASEMENT
For the purpose of external or foreign trade, a debasement of currency is fatuous and pernicious. The coins are estimated at their content of pure metal, and the international exchange is so rated. The consequence is an apparent rise of foreign prices proportioned to the extent of the debasement. This at once unsettles internal or home trade prices, and they rise to the same level, but with such inequality of motion as may happen to follow from friction, local ignorance, want of communication, or from the intricacies of trade. The inequality of exchange-coinage rates which results from this is the bullionist's or the financier's opportunity, and swiftly and invisibly the good species—or any, bad or good, upon which any differential profit can be had—disappear from circulation. The consequence is that the rising prices which instituted the process are no longer accompanied by an expanding or increasing volume of currency, but, on the contrary, with an enormous decrease in the total of acceptable or efficient currency. Hence come decay of trade, and ruin of town and country.
This is no paper,a prioriargument. It is the patent unmistakable statement of history and fact.
The staple trade of England in the sixteenth and seventeenth centuries was woollen. Coventry was one of the considerable seats of the industry, and known as a flourishing and wealthy town. In thethird year of EdwardVI.—the time when this debasement of our coinage reached the lowest point—its trade was gone, and its population had sunk to 3000, "whereas within memory there had been 15,000."
In the extraordinary "Dialogue concerning the common weal of this realm of England," the scene of which was probably laid in this very decayed town of Coventry, the advance of prices, and the general tendency of the above argument, is more than amply borne out. "I have well experience thereof," says the "cappe" or hat manufacturer, "for I am fain to give my journeymen 2d. a day more than I was wont to do, and yet they say they cannot sufficiently live thereon. The city which was heretofore well inhabited and wealthy (as ye know every one of you) is fallen for lack of occupiers to great desolation and poverty."
"So the most part of all the towns of England," quoth the merchant, "London excepted; and not only the good towns are decayed sore in their houses, streets, and other buildings, but also the country in their highways and bridges; for such poverty reigneth everywhere that few men have so much to spare as they may give anything to the reparation of such ways, bridges, and common easements. There is such a general dearth of all things as I never knew the like, not only of things growing within this realm, but also of all other merchandise that we bye beyond the seas, as silks, wines, oils, etc. I wot well all these do costme more now by the third part well than they did but seven years ago."
"Such of us," says the knight, "as do abide in the country still can not with £200 a year keep that house that we might have done with 200 marks but sixteen years ago."
The course of the enhancement of foreign prices is thus argued between the merchant and the doctor.
Merchant.—"We that be merchants pay dearer for everything that cometh over the sea, even by the third part well. And because they of beyond the sea will not receive our money for their wares, as they were glad in past times to do, we are fain to buy English wares for them, and that doth cost us dearer by the third part, yea almost the one-half, dearer than they did before time, for we pay 8s. for a yard of cloth that within these ten years we might have bought for 4s. 8d. When we have thus dear bought outlandish ware, then we have not so good vent of them again as we have had before time, by reason there be not so many buyers, for lack of power, though indeed in such things as we sell we consider the price we bought them at."
Doctor.—"I doubt not if any men have licked themselves whole [i.e.recovered the loss] you be the same, for what odds soever there happen to be in exchange of things, you that be merchants can espy it anon.Ye lurched some of the coin as soon as ever ye perceived the price of that to be enhanced. Ye, by and by perceiving what was to be won thereon beyondthe sea, raked all the old coin for the most part in this realm and found the means to have it carried over, so as little was left behind within this realm of such old coin [i.e., good undebased coin], at this day, which in my opinion is a great cause of this dearth that we have now of all things." "Thereby" he adds again, speaking of this "basing or rather corrupting of our coin and treasure, we have devised a way for the strangers, not only to buy our gold and silver for brass, and not only to exhaust this realm of treasure, but also to buy our chief commodities in manner for nothing.It was thought it should have been a means not only to bring our treasure home, but to bring much of others, but the experience hath so plainly declared the contrary, so as it were a very dullards part to be in doubt thereof,...Do you not see that our coin is discredited already among strangers, which evermore desired to serve us before all other nations at all our needs for the goodness of our coins; and now they let us have nothing from them, but only for our commodities, as wool, felt, tallow, butter, cheese, tin, and lead. And whereas before time they were wont to bring us for the same either good gold or silver, or else equally necessary commodities again, now they send us other trifles as I spake of before, as glasses, gelly pots, tennis balls, papers, girdles, brooches, etc.... As I told you in your ear before, they send us brass for our treasure of gold and silver, and for our said commodities I warrant you you see neither gold nor silver broughtover unto us as it was here before used, and no marvel. To what purpose should they bring silver or gold hither, where the same is not esteemed. Therefore I have heard say of a truth, and I believe it the rather to be true, because it is likely that since our coin hath been debased and altered, strangers have counterfeited our coin, and found the means to have great masses transported hither, and here uttered it as well for our gold and silver as for our chief commodity; which thing I report me to you what inconvenience it may bring the King's highness, and this realm, if it be suffered, and that in brief time.... And besides this, have you not made proclamations that our old coin specially of gold, that it should not be current here above such a price? Is not that the readiest way to drive away our gold from us, as everything will go where it is most esteemed? And therefore our treasure goeth over in ships.... I hear say that in France and Flanders, there goeth abroad such [brass and billon] coin at these days, but that doth not exile all other good coin, but they be current withal, and plenty thereof, howsoever they use it.Therefore I think it wisdom we did learn of them how we might use the one and the other keeping either of them of like rate as they do so, that they should never desire any of our coin for any greater value than they be esteemed at with them nor we theirs for any greater estimate with us than with them, and then we should be sure to keep our treasure at a stay.And as for recovering of old treasure thatis already gone, there might be order that some commodity of ours were so restrained from them that it should not be sold but for silver or gold, or for the third-part or half in such coins as is universally current, and thus chiefly our treasure might be recovered by the use of means."
When pressed by the knight to show how this merchandise in coins was actually initiated and worked the doctor thus replies: "Well, then, when goldsmiths, merchants, and other skilled persons in metal, perceived that the one groat is better than the other, and yet that he shall have as much for the worse groat as for the better, will not he lap up the better groat always and turn it to some other use, and put forth the worse, being like current abroad?Yea, no doubt, even as they have done of late with the new gold. For they apperceiving the new coin of gold to be better than the new coin of silver that was made to counter value it, picked out all the gold as fast as it came forth of the Mint and laid that aside for other uses, so that now ye have but a little more than the old current, and so both the King's highness is deceived of his treasures, and the thing intended never the more brought to pass, and all is because there is no due proportion kept between the coins, while the one is better than the other in his degree."
"But how," asks the knight, "do they do in France and Flanders, where they have both brass coin, mixed coin, pure silver, and pure gold current together?" "I warrant you," is the doctor's reply,'by keeping of due proportion every metal towards other, as of brass towards silver 100 to 1, of silver towards gold 12 to 1. For the proportion of silver towards gold, I think, cannot be altered by the authority of any prince, for if it might have been, it should have been ere this, by some one needy prince or other within 2000 years."
So much in brief for this depreciation of HenryVIII., and for this extraordinary dialogue. The doctor's remedy was a recoinage, such as was later effected. The extent of the knowledge of economic laws displayed by this figure throughout the dialogue is astonishing. The divine was the better merchant, and if he had lived—for Miss Lamond's masterly identification of this character with Latimer hardly admits of question—and ruled in later counsels, he might have shown himself the better legislator.
ELIZABETH'S RECOINAGE
The recoinage which he advocated was not effectually completed till the second year of Elizabeth's reign, 1559. The basis on which it was then accomplished was that of a ratio of 11.79, as nearly as possible that adopted in the same or the following year, 1560, by France, and slightly higher than that which was established in Germany by the imperial edict of 1559. The coincidence in these rates is remarkable, and it is quite apparent that the action of Elizabeth dictated that of France, as also that this her action secured for England a steady supply of the precious metals during a period in which France was violently agitated by currency crises.
In the first year of her reign, 1st May, Elizabeth issued a proclamation against the export of bullion. This was followed by one in the second year, 27th September, against the melting of monies, and by two others, of the 4th October and 23rd December of the same year, "for the valuation of certain base monies calledtestoons... finding that the ancient good gold and silver is daily transported," etc. Finally, on the 15th November (3 Eliz.), a proclamation was issued forbidding the circulation of Frenchcrownsand Flemish or Burgundiancrowns. This series of proclamations is to be regarded as one measure with, and as fortifying, the recoinage and the new ratio established. And the efficiency of the system thus instituted is to be judged by the fact that, with the exception of two unimportant proclamations of 16th October (7 Eliz.), and 1st December (8 Eliz.), no further legislation or Privy Council proclamation was needed for a matter of fifteen years.
ELIZABETH'S FINAL REVISION
From 1572-76, however, as has been seen already, the Netherlands issued a closely consecutive series of plakkaats which altered the situation for the whole of Europe, and England, equally with the rest, felt the drain. Contemporary evidence as to this fact has been already quoted (p.73). Accordingly, on the 20th September (18 Eliz.), Elizabeth issued a proclamation "for the ordering the exchange of monies by enactment, according to laws of the realm, ... because of disorders, ... decay of merchandise, ... and value of monies." Again, in 1582, inquiries weremade respecting the export of gold, and one of the London aldermen wrote to Secretary Walsingham, advising the appointment of four skilful merchants as an advisory body. Finding the drain continue, on the 12th October (29 Eliz.) the Queen issued a proclamation "for reforming of the deceits in diminishing the value of coins of gold current in our dominion, and for remedying the losses which might grow by receiving thereof being diminished." According to the express testimony of this proclamation the gold coins wereexported,diminished, andreturned, and it accordingly enacted that no coins should be taken as current when beneath such and such a weight, or lacking such and such a remedy.
For a dozen years or so after this no further complaints of a gold drainage are heard, but in 1597 they recommence. "If good provision be not foreseen the coins of gold and silver of England will flow over to the Low Countries as fast as they can be coined," is the testimony of a document of April in that year, "for theangelandsovereignof England are current in Holland and Zealand at 18s. the piece of Flemish money, and our silver much after the same rate." And the writer adds: "I see no harm to this realm, if the French gold coin was permitted to be current for 6s. 2d., the Spanish goldpistolefor 6s., and the silverreal of eightfor 4s."
It was under the influence of this movement, of which more complaints exist among the Domestic State Papers, that the final Elizabethan revision of the Mintprices of the metals took place. On the 18th March 1600 she issued a proclamation "concerning coin, plate, and bullion of gold and silver," reciting that "bullion of gold and silver, etc., for these later years, have been much more abundantly transported and conveyed away than in any former times," and commanding the observance of the statutes against such transport.
Finding her proclamation mere waste paper, Elizabeth resorted to the only safe and possible expedient, a change in the issue rate of the coinage. But for once her instinct, or the wisdom of her councillors, failed her. Instead of raising the ratio of gold to silver, she lowered it from 1:111⁄10to 1:105614⁄5921.
It is inconceivable that such a blunder should have been committed at a time when the production of silver had advanced and was advancing by leaps and bounds beyond that of gold, and when the currency of every European country of commercial note was being accommodated to the depreciation of silver with unerring instinct. But so it was, and the blunder only served to accelerate and intensify the catastrophe under JamesI.
ECONOMICS OF THE PURITAN REVOLUTION
In matters of currency history it is impossible to separate the Tudor from the Stuart period, and this last and sole blunder of Elizabeth's administration only serves to show the continuity of principle or event, and how little of moral censure attaches in this matter to abused James any more than to lauded Elizabeth. But it is instructive and curious to notethat the currency history of England during all the reign of Elizabeth shows such remarkable quiescence. From 1558 to the fatal blunder of 1601 there was no change in her Mint rates. The complaints of exports of coins, and the evidence of the action of bimetallic law, appears only at three isolated and widely separated periods. The inference can only be—and it is more than an inference—that her reign, besides being a period of currency expansion, was one in which the ratio existing in England facilitated the flow of metals from the Continent, and secured the permanence of that currency expansion. On this increased basis of currency was built that commercial and national, yea even literary, growth and expansion, which have made the Elizabethan age the glory of our history. Similarly, the unrest and commercial credit crises under JamesI.and CharlesI., which resulted from the same wide causes and principles, underlay and played a vitally determining part in the agitation and revolution-sowing of their reigns, and that, too, in a manner which has never yet been appreciated. The uprisal of England, which resulted in the first dethronement of the Stuarts, was as widely and vitally based upon economic causes as upon legal or religious,—possibly, indeed, much more so, if we only knew it.
At first James was determined to proceed with the monies which were being wrought by Elizabeth's warrant. But on the 11th November, in the first year of his reign, a new indenture was made for thecoining of a new piece called the Unite, to commemorate the union of the two crowns of England and Scotland. While preserving the same value as the pound sovereign of Elizabeth's issue of 1601 (viz. 20s.), its weight was only 15426⁄31grains, while that of Elizabeth's was 17161⁄67. In the following year the angel was reduced from 7866⁄73grains to 711⁄9. The combined effect was to raise the ratio from 10.90 (as in 1601) to 12.15. Elizabeth's blunder was thereby effectually remedied, but it was not before an outcry had been made about the decay in shipping, and in the export of English cloth.
Even this higher ratio did not remain permanently, or for long, effective. In 1607 the transportation of specie rose to such a height that a proclamation had to be issued against it, 9th July, and there was again talk of establishing "a true and perfect way to keep the money within the kingdom by instituting a register for all payments made by way of exchange." Again, two years later (10th August 1609 and 18th May 1611), the proclamation had to be twice renewed; no less a person than Sir Francis Bacon drafting the clause in the first case. The anxiety which the subject caused to the Privy Council is quite apparent in the State papers, and much division of opinion prevailed before the only possible remedy—a raising of the denomination of the coinage—was adopted. Salisbury was at first adverse to the measure, but set himself carefully to study the question. The slow working of his mind is still traceable in the paper of notes hedrew up for his own guidance. "All the proportions of bullion ought to be xij for one between the gold and silver unmixed. Our sterling standard is wrought with a mixture of 18 dwt. in every lb. weight, which is 12 oz.; so as every 18 dwt. is 4s. 6d., and therefore that is wanting.
SALISBURY ON CURRENCY
"Now, two things are in question, one the inconvenience of general transportation, the other of the particular, viz. Scotland. In the general this is the mischief, that our gold is not so much alloyed as our silver, and therefore being more worth than silver is bought and carried away. The particular, of Scotland, is more notorious, because it is not forbidden....
"The gold ought to be 24 caretts.
"Now oure angell is not so much but neare it, about 23 caretts 3 grains and1⁄2.
"4 grains makes a caret. 24 caretts an oz.
"In silver every pound lacks 4s. 6d.
"A pound is 3liin tale.
"In 6 angells wch is in tale 3li, and in weight one ounce, there is not such an alloy, for in silver we want 4s. 6d., and in gold but—"
The notes end thus imperfectly, but what Salisbury was toilfully figuring for himself lay ready to his hand in the opinions of experts and of the officials of the Mint. Immediately succeeding these broken notes of his in the State Papers, there exists a series of documents which he doubtless had under his eye, and which exposed the situation with a clearness that was more than convincing. "Statement of theLoss sustained by England in the Exchange of Coin." ... "Statement by the Officers of the Mint that the Raising the Value of the English Silver Coins by making a Pound Troy of Silver worth £3, 11s. 6d. only equalises the Value of English Money with those of Foreign Countries, and that to prevent the Export of Gold its Price must be raised in Proportion." And so on.
As the result of such representations, and after ten months of wavering Salisbury gave way, and on the 22nd November 1611 he consented to the issuing of a proclamation raising the denominational value of all gold coins 10 per cent. This proclamation was issued on the following day, and the ratio was thereby at a blow raised from 12.15 to 13.32.
Among the many alternative schemes proposed before the adoption of this measure, had been one for "raising £500,000 on loan to the King, by coining brass money to that amount, and compelling their acceptance in certain proportions by the people, on promise to repay within seven years in full value silver." It was fondly asserted that this would be a "means of preventing the export of coin and bullion, caused by the rise and value of foreign coin."
Another project brought forward was "for meeting the increase of value laid upon the coins of the Low Countries by issuing a copper coinage, corresponding thereto, and by raising the value of English silver and gold coins in order to prevent losses of merchants in foreign trade, etc."
ENGLAND: THE AGITATION OF 1611
A year later a third scheme was proposed to remedy the under-valuation of English monies, "by the coinage of small silver monies of coarser silver, so as to raise the value of the larger money in proportion; the old standard to be observed in payments of rents, the new in ordinary bargains."
The step actually and finally adopted, however, by the proclamation of 1611, did not equalise the exchange for more than a twelvemonth. The rise on the Continent continued, and the outflow recommenced. In 1612 the Council took note of the persons concerned in this trade of transporting, with a view to proceeding against them, while on their side the general commercial public, or such of them as did not share the secret and the gain of bullion-broking, demanded that the under-valuation of English monies should be redeemed by further raising the value of the coins one penny in the shilling. On the 14th May 1612 a proclamation was issued forbidding merchants to exceed Mint prices in buying bullion. A year later (4th July 1613) we are told that the Privy Council had sat twelve or thirteen hours on the Sunday, and "have been forced to dismiss the gold and silver business, and also that of the fishing, as involving many points in the treaties with Burgundy and Holland."
The State papers of this year contain quite numerous references to the subject: "Statement of the Undervalue set upon English Money in Foreign Countries, as proved by the last Placard of the LowCountries"; "Notes of the Advantage arising to the Crown of England from raising the Shilling to 131⁄2Pence, and the Proportion of Gold from 121⁄2to 13"; "Suggestions as to the Means of Preventing Foreign Nations from taking Advantage of the English in the Exchange of Monies, viz., raising English Coins in Nominal Value," etc.
On the 23rd March 1615 a further proclamation was issued against the export of gold and silver coin, and in the following year the exports of the East India Company were limited to £6000 in bullion or specie. The Mint officials proposed a raising of the denomination, and again the matter was hotly debated in and out of the Council. But a different race of men from Raleigh had succeeded, and, on the 31st December 1618, the Privy Council determined that "silver shall not be raised in value at present, and uniformity in the weight of the coin is to be observed; the melting of gold for braid or plate forbidden, but further regulations postponed till the committee for exchanges bring their report."
ENGLAND: THE MEASURES OF 1619
As it happened, owing to the necessity of replenishing the King's finances, the question had become complicated, and some of the measures proposed for staying the coin had a more sinister bearing, as is apparent in one of the schemes referred to (supra, p. 136), being, in short, cloaked proposals of debasement. In setting its face against such proposals of debasement the Council was right, but such proposals had relation only to the King's finances, and not to thecurrency crux, and in delaying the proper tariffing of the English against the continental coins the Council did wrong. By 1619 the evil had risen to so great a height that the Council determined to act upon its own proclamations. Eighteen merchants were sentenced in the Star Chamber for exporting gold (8th December 1619), five being acquitted. The total of the fines imposed on the sentenced men reached £140,000, and it was stated that since the beginning of the reign a matter of £7,000,000 of gold had been surreptitiously exported. On the 31st July 1619 proclamation was issued for a new coinage. The goldangelwas reduced in weight from 711⁄9grs. to 6411⁄15, being equivalent to an increase of an eleventh in its denominational value: and in January 1620, following the convictions of the merchants referred to, the Council busily debated "the erecting an exchange for monies, to prevent the export of silver by the goldsmiths who have been the offenders."
All these steps were taken too late, and the currency crisis which shook Germany ran its full course, too, in England.
In 1620 there was a great scarcity of silver in the country, and the trade of the Eastland merchant was gone—a scarcity and decay which they attributed "to the rise of foreign coin, especially that of Poland and Holland, during the last four years in which the Hollanders have farmed the King of Poland's Mint." The export of cloth had sunk to one-third the outputof the previous year. By May 1621 the situation had become pressing. The secret export of money still continued, and it was again proposed to register bills of exchange, and also to make Spanish and French coins current in the country. In June the Privy Council issued circulars to the East India, Turkey, French, Eastland, and Spanish companies, and the Company of Merchant-Adventurers—practically the whole mercantile corporation of London—desiring them to choose experienced persons from each of these companies, to consult upon the best means of managing the exchange of monies, so as to encourage the import of silver, and prevent its export. Their statement on the 17th June was simply that the export was due to the under-valuation of the English monies. The Council considered their report on the following day, and ordered it to be further considered, "but the Lords think it best for some agreement to be made with neighbouring states for a due correspondence in the value of the coins now used."
ENGLAND: THE CRISIS OF 1622
But while the Lords of the Council talked of treaties the crisis came. By the end of the year there was no money in the country, and trade was at a standstill. In February 1622, Locke informs Carleton "money is very scarce. In the clothing counties the poor have assembled in troops of forty or fifty, and gone to houses of the rich and demanded meat and money, which has been given through fear. The Lords ordered the clothiers to keep their peopleat work, but as they complained that they cannot sell their cloth, usurers and monied men though not in the trade are ordered to buy it." In March the Justices write from Gloucestershire: "The people begin to steal, and many are starving; all trades are decayed; money very scarce." Stocks of cloth accumulated in the London "halls" or warehouses of the various districts, and notes of them were submitted to the Privy Council.
Pieces unsold.Gloucester, Worcester, Reading, Somerset, and Suffolk Hall, and Blackwell Hall,433Manchester Hall("Besides many in the country which are not sent off for want of a market.")853Storehouse for Gloucester, Worcester, Kent, Somerset(Mostly belonging to Kent.)1163Wiltshire Hall560Northern Hall5159Leadenhall(Cloths from Suffolk and Essex.)3057Devonshire Kerseys423
The merchant-adventurers were appealedto, tobuy up these stocks, but they were unable. The ordinary taxes of the country could not be levied, or, when levied, proved only a fraction of the estimated amount, and invariably the commissioner attributed the deficiency to the want of money and the general decay of trade. "Wools and cloth are grown almost valueless," write the justices of Somerset, on the 15th of May 1622, "and the people desperate for want of work."
The expectations of outbreaks were great, and in Nottingham musters were held, and the trained bands ordered to be ready for instant service, to suppress riots, if any occurred (July 1622).
Meanwhile the Council was busy conferring with merchant delegates from every part of the country. A new proclamation against exporting coin was talked of (15th June 1622), and a declaration issued (same day), that the King purposed to establish a Royal Exchange, to regulate all exchanges.
"Treatises on Exchanges," "Statements of the Disadvantages of a Low Exchange," and similar documents crowd the State papers; and on the 28th July a proclamation was issued ordering nothing to be worn at funerals but English-made cloth, forbidding the export of raw wool or yarn, and declaring the establishing of a Standing Commission on matters of trade. On the 30th of August the Goldsmiths' Company returned their answers to the Council's queries with regard to the comparative weight and value of Spanishrealsand English shillings, and suggested that the pound of silver should be cut into 65s. instead of 62s. The officers of the Mint followed up this advice by confirmatory testimony. "The business is weighty," wrote Sir Robert Heath to Secretary Calvert, in enclosing him the above reports. "For we are drawn dry. Coin must be brought in from elsewhere [i.e.abroad], which can only be by assurance of gain to the merchants in equalling our coin to that of other States." As a corollary it was proposed onthe following day, August 31, to encourage the bringing in of money by making the Spanishrealpass current at 4s. 8d., its true value in English coin. "The merchants will bring them in at this profit, though they can gain more for them in Holland, and they press for an immediate reply, as the Spanish fleet is coming in, and the money will be brought hither if the merchant can make a reasonable profit."
In September the clothworkers and dyers of London complained in a petition of their want of employment, and that many thousands of them were in the greatest distress. So great was the want in the country districts that a proclamation was issued ordering all persons of quality in London and Westminster to go to the country, and reside on their estates, for the relief of the poor in the dearth. In January 1623 fears of disturbance in Essex were rife, "because of poor clothworkers, the masters being unable to employ the men, and many who were thought the wealthiest were likely to become bankrupt." On the 7th of February the officers of the Mint reported to the Council that they found the value of the Spanishreal of eightto be equal to 4s. 61⁄2d., as compared with the new shilling coin; and on the 4th of March following a proclamation was issued to make these Spanishrealscurrent at 4s. 6d., "in hopes of bringing some of that coin to the Mint."
From this time onwards no further references, save one laconic remark in May 1623, "the poor do not complain much," occur in the State papers to this, one ofthe acutest currency crises in our history; and we are left to follow the process of recovery and the dumb, inarticulate agony of the widespread ruin in sympathy and imagination merely. The details here given are taken entirely from the State papers, stolid and ungarnished, but the tale they tell is momentous and dire in its importance.
When consulted by the Privy Council, the various committees and delegates of the merchants attributed the crisis to the deceits practised in the manufacture of cloth, to the embargo on its sale, and other such causes, as well as to the scarcity of money, and the loss in exchange. The first suggestion is hardly worth a moment's consideration. Every testimony points to the fact that the crisis was as purely a monetary or currency crisis, as later crises have been distinguishedly credit crises. Between 1613 and 1621 hardly any silver monies were coined in the English Mint; for example, between 1617 and 1620 the total silver coinage was only £1070, whereas in the four succeeding years the silver coinage at the Tower Mint amounted to £205,500.
ENGLAND: JAMES I.
"From the year 1621," says one of the informers of 1638, to whose petition reference will be shortly made, "many goldsmiths and cashiers of London culled the weighty shillings and sixpences to make into plate, silver wire, and to other manufactures; for most of that time, we having wars with Spain, little or no silver came from thence; so likewise hath little or no silver from France in that time, and nosilver could be brought out of Holland by reason it went so high by the placard. For sterling silver passed in Holland for 4d. per ounce higher than it was made in our Mint, sterling being in Holland at 5s. 4d. per ounce, so that no silver could be imported from Holland to supply our Mint, which the goldsmiths and others perceiving presently fell a-culling the silver monies current, and the money being coined in the Mint at 5s. 2d., the goldsmiths, finers, and wire-drawers did raise it up to 5s. 3d. per ounce, and melted down into the weight of shillings and sixpences, and left none to pass betwixt man and man but light monies and clipped, and did exceed the rate of the Mint by giving for sterling 5s. 3d. per ounce, and 5s. 31⁄2d., and sometimes more; by which means there was no silver brought into the Mint for ten years to speak of but the silver which came from Wales. This will appear by the Mint books."
The testimony only confirms the previous inference. The whole reign of JamesI.was a period of inefficient attempts to rate the English coinage to the incessant rise in the continental coinages, of consequent drain of specie to the Netherlands, and of practical closing of the Mints at home. The cause, opportunity, channel, or machinery of the drain was the incessantly shifting, badly tariffed, imperfectly understood bimetallic system of the times; and the crisis of 1622 was only the most patent expression of its malignant action. It is doubtful whether the political effect of that crisis has been properly estimated by the constitutional student of the popular revolution under the Stuarts. Its commercial, currency, and economic and theoretic influence has certainly, and much more, been hitherto overlooked.
ENGLAND: CHARLES I.
The reign of CharlesI., and the period of the Commonwealth, display similar characteristics to that of JamesI., but in a more modified and less malignant measure. Putting aside, after one nearly fatal slip in August 1626, the various propositions for a debasement which were made early in his reign, Charles made, throughout, no change in the denomination or value of his coins, and no change in the ratio. In 1627 the export of coinage became again perceptible, and a warrant was issued for erecting a Royal Exchange between England and Scotland, September 28, and for a proclamation forbidding all indirect practices of merchants, and underhand buying of uncurrent coin and foreign bullion.
In the following March, 1628, a committee was appointed to advise his Majesty concerning the coins, and to observe from time to time all accidents at home and abroad touching coins. Numerous schemes were proposed for the arresting of the process of export. They bear generally two characters—(1) as proposing a change of the ratio; (2) as proposing a differential issue of the silver issue coinage,i.e.coining 4d., 3d., and 2d. silver pieces at a different and higher rate than the larger silver pieces. Such schemes have no importance at the present day, save as foreshadowing the mechanism by which England finally evolved a monometallic system which permitted of the fullest retention of silver. The flow of coinage which these proposals were intended to meet was not now to the Netherlands but to France, and it must be attributed to the course of the French currency already indicated. In 1630 the names of certain merchants engaged in the transport of gold and silver were reported to the Council, together with the names of the French merchants who received the same in France. In June 1635 certain of these were arrested, and in 1638 not less than thirty-seven of them were prosecuted in the Star Chamber for this unlawful transportation. The drain went steadily on during the whole of the decade. On January 18, 1635-6, a proclamation was issued for restraint of the consumption of coin and bullion. In the following March an order of the King in Council was issued against the exportation of English and Scotch coin, and by gentlemen crossing the sea, and forbidding the wearing of jewels, etc., "because of the great quantity of money exported." Any such enactments were doomed to be futile. The true remedy, or rather the keynote of the situation, was contained in a proposition submitted to the Privy Council for the making current of certain foreign coins. "The forbidding of Spanish money in England," says the author Barrett, "was to enrich the Mint, which brought forth contrary effects, for the French, Dutch, and other nations, by advancing Spanish coins, received the greatest profit." He accordingly proposed that the King should raise the Spanish money to becurrent in England by proclamation. The doublepistoletsweighing 16s. to be raised to 15s.; thepiece of eightweighing 5s. to be raised to 4s. 6d., "and when there is store brought into the kingdom, then have a new proclamation to call in these coins to be stamped with a mark and apprised to the intrinsic value." The step was not adopted, and by his Majesty's declaration of 1639 in the Star Chamber, gold and silver were to be considered commodities of merchandise. "By 1640 there was not in the kingdom a million of silver," says Sir Ralph Maddison in a memorial. "Gold and silver," said Sir Thomas Roe in his speech on trade in the Commons, "are very scarce, and the kingdom is impoverished. Money has been drawn away into other kingdoms, especially into France and Holland, where it is worth more." One of the informants, who had been employed by the Government in the prosecutions of 1638, thus gave his testimony in a petition which he subsequently drew up: "Divers goldsmiths of London are become exchangers of bullion of gold and silver, and buy it of merchants and others, pretending to carry it to the Mint. But indeed they are the greatest instruments for transporting that are, and in a manner they are only those who furnish transporters with English and foreign gold, Spanish money,rixdollars,pistolets,cardacues, etc. Some of the goldsmiths make it their use and practice to buy light English gold of shopkeepers and others, which, by the laws of this kingdom, wanting beyond remedy, ought to bebought as bullion, and upon the sale ought to be defaced and new-coined in the Mint. But they take another way, for they sell all this gold to transport, though it want four, five, or six grains above the allowance, and that a 20s.-piece will not make 19s. to be coined in the Mint. Yet the goldsmiths will not abate above 2d. or 3d., and sometimes but 1d. in the piece, let the gold want what it will, by which means they outgive the Mint, and the gold which the goldsmiths buy of the subjects, thinking it is to carry to the Mint to be new-coined, to pass in current payment, they put it into a dead sea, never to be made coin of in our commonwealth. For, weekly, French and English have bought up this gold, let it be as light as it will, at 19s. 9d., 19s. 10d., 19s. 11d., and so after that rate for all other gold, to the value of many hundred thousand pounds. Many thousands ofdollarsand Spanish money they furnish yearly to merchants that trade for Norway and Denmark, to transport silver for those parts."