to the Exchequer. Receipts from Goldsmiths for storage in strong
boxes had become a de facto paper currency. But when the
Goldsmiths had no more money to lend, the Bank of England was
founded in 1694 under whig auspices to provide money for war. It
was the first institution to issue notes in excess of its total
deposits. However, it was not allowed to lend money to the Crown
without the consent of Parliament. It was incorporated as the
first English joint-stock bank and had about 1,300 shareholders.
These original subscribers were individuals from London from many
walks of life, including well-to-do tradesmen and about 12% of
whom were women: wives, widows, or spinsters. Not many
corporations were original subscribers. Holders of at least 500
pounds could vote, of 2000 pounds could be directors, and of 4000
pounds could be Governor. The Bank issued notes payable to bearer
and discounted bills, but these were not legal tender. It lent at
8% to the Crown and occasionally to corporations. Money was also
borrowed by offering annuities on single lives. This was the first
time the government borrowed directly from the public on a long-
term basis.
In 1695 there was inflation due to over issue by the Bank because
of inexperience, pressure from government, and the Bank's greed
for business. After a dividend of 5% in 1695, the next year there
was no dividend and so the bank stock price fell. In 1696, five
pound and ten pound short term bonds were sold to the public. Also
in that year was the first run on the bank. This occurred two days
after clipped money lost currency; people wanted the new recoined
money, but the Mint had not supplied the Bank with sufficient
supplies. Interest instead of cash was given for notes. Cash was
short for months. The Bank's credit was much shaken. It was then
given a monopoly so that its notes would not have competition.
Thereafter, its dividends were good - about 12% per year. Because
of its monopoly, its dividends were about 3% above the current
going rate of interest. About this time, Exchequer Bills, with
interest, were started by the Exchequer and circulated by the Bank
of England. They were frequently endorsed many times by successive
holders.
The Bank simply took over from the goldsmiths its main everyday
business of deposit; running cash note [cashier's note, specie
note, cash note], which was payable on demand and normally did not
bear interest; and drawn note [precursor to the check, but not on
special paper]. The Bank gradually convinced many of its clients
to use its "check" [cheque] paper when drawing. The check paper
was unique to the Bank and embellished with distinctive scroll
work to serve as an obstacle to fraud. Over time the running cash
note tended to be for round sums of at least twenty pounds and
multiples of five pounds. The Bank of England had a monopoly on
issuing notes in the London area. Country banks arose and issued
bearer notes payable on demand and interest-bearing notes in their
areas. The Bank of England gave to its depositors the service of
paying annually to a designee without further order.
A decision of the common law courts held that bills of exchange
(written orders to pay a given a sum on a given date) were
transferable to other people by successive endorsements. So long
distance payments no longer had to be made in coin, with all the
dangers of highway robbery.
The financial revolution of the 1690s meant that the merchant
elite could invest in government bonds or company bonds at 5-6%,
or London leases at 10%, as opposed to income from landed estates,
which was under 3%. Shareholders were no longer personally liable
for company losses. Interest on loans was no longer considered
sinful as long as it was not oppressive. The greater ability to
borrow spurred the growth of capitalism.
All brokers and stock jobbers in London and Westminster of bank
stock, bank bills, shares and interests in joint stock must be
licensed by the mayor, which shall necessitate their taking an
oath to exercise their office without fraud or collusion to the
best of his skill and knowledge as of 1697. This is to avoid the
collusion of fixing values to their own advantage.
The science of statistics made life insurance possible. But it was
administered by ad hoc offices rather than companies and was not
reliable in making payments.
Charles instituted a hearth tax of 2s. per year in 1662, with
constables and offiers authorized to verify the number of hearths
and stoves in houses. It was repealed in 1688 because it could not
be enforced except by exposing every man's house to be entered and
searched at pleasure by persons unknown to the people, which was
oppressive and a badge of slavery.
By bribes, Charles built up a body of support in Parliament which
could be relied upon for a majority. They came to be called
"tories" by their opponents. "Tory" had been a term of abuse for
Irish Catholic bandits. The tory and whig groups were known by
their disagreement over the authoritarianism of the Crown. The
tories were sympathetic to the doctrine of divine right and
favored a doctrinally high church. The tories represented landed
property and the established church, and usually wore blue in
contrast to the purple of royalty. Many royalists became tories.
The whigs refused to accept the sacrosanct character of the
monarchy. The whigs opined that government depended upon consent
of the people and that the people had a right of resistance. They
subordinated the Crown to Parliament. The whigs represented the
dissenters and the mercantile classes, and often wore red. Many
former Puritans became whigs. "Whig" had been a term of abuse for
Scots Presbyterian rebels and horse thieves. The gout and venereal
disease were common among political leaders. A primitive condom
just introduced to the aristocracy from France helped deter
syphillus; It was uncomfortable and unreliable.
Under Charles II, the Treasury as a supreme financial body
separated from the Exchequer as a depository of revenue. A gold
guinea coin was issued. From 1690, government policy was
controlled by specific appropriations. Money bills had to
originate in the Commons, and could not be amended by the House of
Lords.
Boards became independent of the king's Privy Council and
answerable to the secretary of state.
In the 1680s, Charles compelled some of the livery companies in
London to give up their charters to him and he called in many
corporation charters of boroughs whenever some light excuse could
be found to justify it. This was done by the use of the writ of
quo warranto before a court. In London he had the tory mayor
revive an ancient custom of selecting a sheriff by drinking to him
at the annual feast. Two tory sheriffs were installed into office.
All these actions gave the king a voice in selection of the
officers of London and boroughs, since Royal commissioners would
then determine who the officers would be. This was to assure
London's representation in Parliament by Crown loyalists as London
had been whig. It also allowed influenced selection of sympathetic
jurors.
Criminal seditious libel was brought into the common law courts in
1664, when Benjamin Keach was tried for writing a book containing
contradictions of the doctrine of the established church. He wrote
against infant baptism and asserted that laymen might preach the
gospel. The justice intimidated the jury to find him guilty. He
was sentenced to be fined, to spend two hours in the pillory in
two successive weeks, and his book to be burned before his face.
He was to be imprisoned until he found sureties for his good
behavior and renunciation of his doctrine and for his future
appearance in court. Juries were loath to find anyone guilty of
seditious libel.
James II succeeded Charles II to the throne and fostered Roman
Catholicism by appointments and by attempting to suspend laws
unfavorable to Catholics. He commanded all bishops to read in the
churches his Declaration of Indulgence exempting both Catholic and
Protestant dissenters from all penal statutes based on religion.
Seven bishops refused to obey and jointly petitioned him, stating
that his action was illegal according to Parliament. He prosecuted
them for seditious libel in the petition. The jury found them not
guilty. James discharged the two justices of the five who had
rejected the seditious libel doctrine which had been created by
the Star Chamber Court. This roused the whigs and tories in turn
to discharge him by joining in inviting protestants William of
Orange and Mary to take the throne in his place. James was
effectively chased out of England by William's advancing army in
the Glorious Revolution of 1688-9, which took away the powers of
final authority from the king, but without transferring them to
any other body. A "Bill of Rights" stated that
1. The king may not suspend laws or dispense with them
without consent of Parliament.
2. The establishment of a Court of Commissioners and like
bodies for ecclesiastical causes is illegal.
3. The king may not levy money or extend an authorized levy
without consent of Parliament.
4. Subjects have a right to petition the king without
prosecution.
5. The king may not raise or keep a standing army within the
country in time of peace without the consent of Parliament.
6. Protestants may have arms for their defense as allowed by
law.
7. The elections of members of Parliament should be free.
8. The freedom of speech or debates or proceedings in
Parliament should not be impeached or questioned in any
court or place outside of Parliament.
9. Excessive bail should not be required, nor excessive
fines imposed, nor cruel and unusual punishments inflicted
(so no more men were whipped to death)
10. Jury selection should not be tampered with, and jurors
who try men for high treason should be freeholders.
11. All grants and promises of fines and forfeiture of
particular persons, before conviction, are illegal and void.
12. Parliament should be held frequently for redress of
grievances and for the amending, strengthening, and
preserving of the laws.
13. All Protestants may freely exercise their religion and
the king will maintain the Protestant religion and the law
and liberty of the realm.
The right of the peoples' representatives to select and depose the
king and to change the order of succession was established. There
was no divine right or hereditary right to the Crown. An English
monarch was created by an act of Parliament. The king still called
and dissolved Parliaments, except that Parliament continued for
six months after the death of a king. From 1689, Parliament sat
every year. Freedom of speech for members of Parliament was
established by a resolution overturning a King's Bench felony
conviction of Sir John Elliot.
By the act of settlement of 1701, no officer or pensioner of the
king could be a member of Parliament. All resolutions by the Privy
Council had to be signed by the members consenting to them. No one
born outside the realm could be a member of the Privy Council or
of Parliament, or could have any civil or military office or place
of trust, or any grants of land or tenements from the king.
Justices served during good behavior instead of at the pleasure of
the king.
After the Glorious Revolution, Tories tended to accept of the Whig
principles of limited constitutional monarchy instead of rule by
divine right.
Under William and Mary, the ministers were first chosen by them
but could be impeached by the Commons and then removed by the
Parliament. The Commons removed anyone who disagreed with them as
soon as he made a mistake. But the king could pardon anyone
convicted by Parliamentary bill of attainder. This was
inconsistent, so no one was allowed to plead pardon by the king in
an impeachment by the Commons. Thus Parliament gained control of
who would be ministers.
The Glorious Revolution favored the capitalists and the commercial
magnates even though it had been started by the landed families,
with whom they now intermarried. There were companies in the
fishing, silk, baize [a coarse wool], sugar, rope, paper, iron,
hardware, gunpowder, saw milling, and pottery trades. The largest
pottery workshops employed about six men. One man shaped the pots,
another made the handles and put them on, while the others did the
decoration, the glazing, and the firing. New companies could be
formed without royal or Parliamentary consent. There were no more
commercial monopolies. Regulated companies declined. The Merchant
Adventurers lost their last monopoly privileges; their entrance
fees were abolished. Their method of limiting the volume of their
exports of English cloth to Germany to keep up prices was
obsolete. Now they tried to capture the market by selling cheap.
There were more joint-stock companies and on a larger scale. They
also no longer restricted output to keep prices high, but geared
to export many inexpensive goods. The Stock Exchange was
incorporated about 1694.
The domestic or "putting out" system came into use. In this
system, the worker usually owned his own machinery and the
capitalist owned the material, which he put out to the worker at
home. The merchant manufacturer bought raw wool and had it carded,
spun, woven, fulled, and dressed at his own expense. Some farmers
became spinners in the winter when outside work was impossible.
The manufacture of nails was also done by this system.
Accordingly, the guilds and municipal corporations in towns ceased
to control the recruiting, conditions of work, and pay of
industries. New industries for the manufacture of silk, paper, and
cutlery were organized on capitalist lines rather than being
subject to guilds. That is, production was controlled by men with
money and the means of manufacture. Only a quarter of 200 towns
had any organized guilds at all. Growing Birmingham was not a
chartered borough, so never was encumbered with guild regulations.
The guild and apprentice regulations were effectively enforced
only in agriculture. Artisans became known as tradesmen. Work was
usually irregular, some seasonal. In bad years, when a worker had
to borrow money, he used work tools, such as his loom, as
security. In this way, work tools often became the property of a
merchant. Some merchant clothiers also owned a fulling mill and a
shop where it was sold. The capitalists first became owners of the
materials, then of the implements, and then of the work places.
But production was still confined to the known wants of its
habitual market. Men used to working at home were generally not
inclined to go to work in a factory. So there was an assortment of
unskilled factory labor, such as country people driven from their
villages by the growth of large estates, disbanded soldiers, and
paupers. They had to be taught, trained, and above all
disciplined.
In 1670, Vauxhall glass works were opened with workmen brought
from Venice to blow their fine glass and make mirrors.
The capitalist organization of the mining, glass manufacture,
salt, soap, wire and other monopolized industries was made
possible only by government support.
From the mid-1500s to 1700, coal production increased fourteen
times. Sir Ambrose Crowley, an iron maker with coal works,
established disability and medical benefits and pensions for his
workers.
Smiths used trip hammers powered by water mills which turned an
axle with cams on it. They made iron gates, fences, balconies, and
staircases with hammer, anvil, and chisel. Cast iron was made by
running liquefied metal into molds. This was harder but more
brittle than the tough but malleable wrought iron. Tinkers went
from house to house to repair metal items such as pots and pans.
Salt and glass manufacture expanded. Glass drinking vessels were
in common use. Mirrors of blown plate glass were manufactured in
England. Some plate glass by casting was imported. Plate glass was
a large and strong glass piece, which was formed by the liquid
glass being poured on a table. This glass was not distorted, so
mirrors could be made perfectly reflective. Then plate glass for
coaches, mirrors, and windows became manufactured in England; this
new industry was organized on capitalist lines.
The East India Company had about half the trade of the nation. Its
shares were frequently bought and sold. It responded to anger over
its semi-monopoly status by granting liberty to all English
subjects below the age of forty to live in its Indian settlements
and to trade practically everywhere. Bombay, India became subject
to the East India Company. Charters gave the East India Company
the right to coin money, to exercise jurisdiction over English
subjects, to levy taxes, to build and command fortresses, to
command English and Indian troops, to make peace and war, and to
enter into alliances with Indian rulers. The Company always paid
high dividends and the market price of its shares generally rose.
100 pound stock was worth 130 pounds in 1669, 245 pounds in 1677,
280 pounds in 1681, 360 and even up to 500 pounds in 1683, and 190
pounds in 1692. In 1693 a new charter for the Company included
loss of monopoly status by resolution of the Commons. With this
resolution, Parliament assumed the right of regulating commerce,
now no longer the king's province. Thereafter the Commons
regulated trade with India and determined who could participate in
trade there. Political issues developed, which initiated
corruption at elections by entertainment and bribes to candidates,
which was later proscribed. The trade opened up to many more
traders and investors. Ordinary investors came to include women
and Quakers.
When there was a surplus of grain, it was exported. About 1696,
the king set up a board of trade of eight paid members and great
officers of state, who nominally belonged to it, and a staff. This
was to achieve a favorable balance of trade. For instance, it
imposed tariffs to protect internal markets and put restraints on
imports of goods producible in the country, e.g. live cattle,
dairy products, and woolen goods. It also restricted the export of
raw wool. England led the way in protectionist measures.
Exports included grain, silk, metal wares, foodstuffs, lead, and
tin. Cloth and manufactures were exported to America. Dyeing and
dressing of cloth became the norm and undressed cloth exports fell
sharply. Imports included linen, flax, hemp, timber, iron, silk
(raw, thrown, and woven), wine, brandy, fruit, coffee, chocolate,
cauliflower, and oil. From America came molasses, sugar, tobacco,
and dyes. The East India Company imported calico, silk, pepper,
spices, China tea, potions, and saltpeter. Tonnage of English
shipping doubled by 1688. Exports and imports increased 50% by
1700.
Parliament required an oath of allegiance to the new sovereigns
William and Mary from all those in public functions, including the
clergy. By extending this rule to the clergy, Parliament asserted
a supremacy of Parliament over the church. It also asserted a
supremacy over the king by requiring all monarchs to take a
coronation oath promising to govern according to the statutes,
laws, and customs of Parliament, to make judgments with law and
justice in mercy, and to maintain the Protestant religion
established by law.
Drinking of gin, which had first been made by a Flemish physician,
became popular under King William, who was Dutch. The year of his
accession, the gin monopoly ended.
England competed with other nations for land in the New World.
Carolina, named for Charles II, was colonized for commerce in
1663. The Episcopal Church, an analogue of the Church of England,
was established there by law. The whole coast became English after
war with the Netherlands gave New York, named for Charles II's
brother the Duke of York, and New Jersey to England in 1667.
Presbyterians and Baptists fled from religious tests and
persecutions in England to colonize New Jersey. For free passage
to the English colonies, people became indentured servants,
agreeing to serve the master of the ship or his assigns with a
certain kind of labor for a term of a few years according to a
written contract made before departure. Also, various statutes
made transportation to any part of America to the use of any
person who will pay for his transportation, for a term of years,
usually seven, a new possible penalty for offenses. In 1636,
Harvard College was founded in New England to advance literature,
arts, and sciences, as well as to train ministers.
In 1682, Quaker William Penn, son of an Admiral, founded the
colony of Pennsylvania for Quakers in a "Holy Experiment" in
political and religious freedom. The king had granted proprietary
rights to this land to him to discharge a Crown debt to his
father. When Penn refused to take off his hat before King Charles
and asked why Charles took off his own, Charles, unruffled,
replied that "It's the custom of this place that only one man
should remain uncovered at a time". The Pennsylvania Charter of
1701 went beyond Magna Carta and England's law in guaranteeing
right to counsel and giving a right to defendants to summon
witnesses in all criminal cases. It gave Penn absolute authority
and he established liberty of conscience (freedom of religion) and
freedom from arbitrary arrest. In 1751, some Quakers founded a
small hospital in Pennsylvania as an asylum for the insane, where
they would be treated humanely.
Proprietary colonies, in which an individual or syndicate held
under the crown a sort of feudal overlordship, were founded in
America: namely, Virginia, Maryland, Carolina, New York and New
Jersey in 1663, and Pennsylvania and Delaware in 1682. New
Hampshire was made a royal province in 1680 to cut off the
expansion of Massachusetts, which had been avoiding the trade
laws. These colonies were distinguished from the corporate
colonies of Massachusetts, Plymouth, Connecticut, and Rhode
Island, which made their own arrangements for internal government
without a royal executive. Charles persuaded the Chancery Court to
declare the charter of Massachusetts void; it was given a new
charter in 1691 which made it a royal province. New York was made
a royal province in 1691. Maryland's proprietor gave way to a
royal governor in 1692. Soon all colonies except Rhode Island,
Connecticut, Pennsylvania were royal provinces, with governors
nominated by the Crown. This bringing of union to the colonies was
done for maintenance of order, to coordinate defense, and to
enforce trade laws.
In 1670, the Hudson's Bay Company was incorporated to engage in
fur trade with Indian trappers in the Hudson Bay and to find a
northwest passage to China.
In 1701 the founding of the "Society for the Propagation of the
Gospel in Foreign Parts" by the Church of England created many
missionaries in the colonies, where they called their churches
"Episcopalian".
Increase Mather and his son Cotton Mather were Puritan ministers
in Boston. Increase was for a time the President of Harvard
College and participated in obtaining the new charter of
Massachusetts of 1691. He and his son tried to maintain the
principles of the Puritan founders of Massachusetts, which
included the theories of diabolical possession and witchcraft. But
the thought of Presbyterians, Anglicans, and Baptists became
influential also. In 1692 in the small town of Salem,
Massachusetts, some hysterical girls showing strange spasms and
sounds charged they had been bewitched by certain other residents.
Victims were deluded, flogged, or tortured into forced confessions
and then excommunicated from the church. They were then hanged and
their property confiscated. One man endured being pressed to death
for refusal to plead so that his property would be inherited by
his family rather than confiscated. Eventually, some prominent
citizens including judges were accused. Then the more thoughtful
people began to doubt the whole phenomenon and admitted error. The
excommunications were revoked. Cotton Mather came to accept
Newton's science and advocated inoculation. He encouraged
Puritanism into a simpler piety and charity. This influenced
American Protestantism toward a generalized concern with good
works, morality, and social leadership.
- The Law -
Any sale of land or lease or estate of freehold or copyhold shall
be in writing and signed. An interest in land given orally shall
have only the force of estates at will. All contracts for sale of
goods or merchandise for the price of at least 10 pounds shall be
in writing and signed by the parties or shall be accompanied by
part payment or partial acceptance of the goods. This is to deter
fraud. This statute caused many small freeholders, including
yeomen, who paid rent by custom to be dispossessed.