+--------------+--------+---------++--------------+--------+---------+

| Date. | Florin.| Krtzers.|| Date. | Florin.| Krtzers.|

+--------------+--------+---------++--------------+--------+---------+

| 1582 | 1 | 8 || 1621 Jan. | 2 | 20 |

| 1587 | 1 | 9 || Feb. | 2 | 24 |

| 1590 | 1 | 10 || March | 2 | 30 |

| 1594 | 1 | 11 || April | 2 | 36 |

| 1596 | 1 | 12 || May 25 | 2 | 48 |

| 1603 | 1 | 14 || May 31 | 3 | 15 |

| 1604 | 1 | 14 || June | 3 | 6 |

| 1605 | 1 | 15 || July | 3 | 15 |

| 1607 | 1 | 16 || Aug. | 4 | 0 |

| 1608 | 1 | 20 || Aug. 10 | 3 | 15[A] |

| 1609 June 15 | 1 | 22 || Sept. | 4 | 30[A] |

| July 7 | | || Oct. | 5 | 0[A] |

| Dec. 19 | 1 | 24 || Nov. | 5 | 30[A] |

| 1610 | 1 | 24 || Dec. | 6 | 30[A] |

| 1613 Sept. | 1 | 26 || Dec. 20 | 3 | 15 |

| 1614 Aug. | 1 | 28 || 1622 Jan. 18 | 7 | 30[B] |

| 1615 March | 1 | 28 || Jan. 27 | 4 | 30 |

| Nov. 1 | 1 | 24 || Feb. 10 | 10 | 0[C] |

| Nov. 17 | 1 | 30 || Mar. | 10 | 0[C] |

| 1616 | 1 | 30 || Mar. 12 | 6 | 0 |

| 1617 | 1 | 30 || June 16 | 3 | 15[A] |

| 1618 | 1 | 32 || Oct. | 5 | 0[B] |

| 1619 Oct. | 1 | 48 || Nov. | 6 | 0[B] |

| Dec. | 2 | 4 || 1623 April | 1 | 30 |

| 1620 June | 2 | 8 || And at this last figure |

| Nov. 9 | 2 | 20 || standing up to 1669. |

+--------------+--------+---------++--------------+--------+---------+

[Footnote A: Nuernberg.] [Footnote B: Augsburg.] [Footnote C: Vienna.]

The course of the _gold gulden_ which could be given is exactly

parallel.

This table speaks volumes. It marks the acuteness of the monetary panic

and crisis of 1621-22--the central time of the commercial ruin induced

by the disorder of the _Kipper und Wipper Zeit_. The pamphleteer and

polemic literature of this crisis is as rich and instructive as any

which has accompanied the bimetallic agitation and silver question of

our later days.

At Hamburg the _thaler_, which had gradually risen from an equivalence

of 24 schillingen to 33 schillingen in 1609, had a correspondingly

excited course during these years.

+-----------+------------+----------++-----------+------------+---------+

| |Schillingen.|Pfennige. || |Schillingen.|Pfennige.|

+-----------+------------+----------++-----------+------------+---------+

|Oct. 1609 | 36 | 0 ||July 1618 | 42 | 6 |

| 1610-13 | 37 | 0 ||Sept. | 43 | 0 |

|Dec. 1614 | 37 | 6 ||Nov. | 44 | 0 |

|Aug. 1615 | 38 | 9 ||Sept. 1619 | 46 | 6 |

|Jan. 1616 | 40 | 0 ||Oct. | 48 | 0 |

|Aug. | 41 | 0 ||Aug. 1620 | 52 | 0 |

|April 1617 | 40 | 6 ||Feb. 1621 | 53 | 0 |

|Aug. | 41 | 0 ||Mar. | 54 | 6 |

|Sept. | 41 | 6 ||May | 54 | 0 |

|Nov. | 42 | 0 ||May 1622 | 48 | 0 |

+-----------+------------+----------++-----------+------------+---------+

It was in anticipation of the approaching disorder that on the 3rd of

March 1609 a Mint treaty had been made between Mecklenburg,

Schleswig-Holstein, Luebeck, and Hamburg, "for protection against the

Mint disorder, which is most disastrous to land and people, and to take

precaution against the advance of the larger silver specie." Seven years

later, on the 10th January 1616, the merchants and financiers of Hamburg

drew up a petition complaining that, through the monetary disorder,

trade and exchange was being driven from the city, as within a short

period the exchange with Frankfort had fallen from 74 kreutzer (=32

schillingen Luebeck) to 62 kreutzer (=32 schillingen Luebeck), and the

exchange with Amsterdam from 46 stivers (=32 schillingen Luebeck) to 39

stivers. To the Senate's proposal for the erection of an exchange bank,

the merchants would, however, have nothing to say, considering it

unnecessary and dangerous, and called for the suppression of the notes

which the merchants had brought into use to facilitate their

settlements.

Three years later, however, the Senate declared more strongly for the

establishment of a bank, premising in the preamble of their resolution

that "it is many ways known and plain how disastrous a disorder has

hitherto been in the currency, both from the rise of the larger silver

species and from the excessive importation of smaller depreciated

specie, whereby not only private individuals but also common interests,

as churches, hospitals, widows, and orphans are greatly pinched in their

incomes."

[Sidenote: GERMANY: HAMBURG IN 1619]

It was as the outcome of this resolution that the celebrated Hamburg

bank was instituted in 1619, the later life of which was to become of so

much importance for the monetary and commercial history of North

Germany.

The curious point to observe is the short time--a few months merely--by

which the crisis in Germany preceded that in England, and the analogy of

some of the manifestations, although there were no such Mint and coinage

disorders in England as had aggravated and in the first place partly

induced the movement in Germany.

In 1623 a great Mint deputation from all the circles was held, and in

accordance with its representations the new imperial basis was

established, which remained in force until the conclusion of the period

of which we here treat. By that basis the mark of silver was coined into

9 _Reichs thalers_ 2 _groschen_. The _thaler_ was fixed at 90 kreutzers,

the gold _gulden_ at 1 florin 44 kreutzers, and the _ducat_ at 2 florins

20 kreutzers. This disposition remained the Mint law over all the weary,

disastrous period of the Thirty Years' War, which is practically a blank

for the monetary history of Germany. It is not until 1665--the opening

of a fresh period--that complaints of the state of the lower

denominations of the coinage are again heard. But how far this

quiescence is to be attributed to the economic wisdom of the settlement

of 1623, or to the mute, dumb, inarticulate agony of Germany during that

strife when her commerce, much more even than her national life, was

suspended, is hidden from us in almost complete darkness.

[Sidenote: SPAIN: FUNCTION IN SEVENTEENTH CENTURY]

Spain.

During the sixteenth and seventeenth centuries the function of Spain was

a very simple one in the European system. She was the receiver and

distributor of the metallic wealth and finds of the New World, and

accomplished her task perfectly naturally and efficiently. But it was at

the cost of her political and commercial future and greatness. If Spain

had been a commercially independent nation, growing for herself and

supplying herself with her own manufactures, the metallic wealth of the

New World would have stayed much longer in her lap, and Europe would

have starved. But she was not. She produced little, and manufactured

less, and the ill-gotten, blood-stained gain, which flowed to her shores

from America, served only to feed an impractical vanity and to further

unfit the nation for manufacturing and commercial life. The, to her,

disastrous influence of Spain's shortlived empire endure to-day, for she

is still as unfitted as ever by temperament and natural training for

mercantile life. Such is the penalty her dower of New World gold and

silver brought her. Finding she could purchase anything and everything

with this gold and silver, she threw herself into her work of conquest,

and let commerce go. Her manufactures came to her from England and the

Netherlands--countries she sought to conquer and enslave; and thither

her gold went in exchange, and before the century was out those

countries had risen exulting over her. But the point to notice is this.

Assuming this distributing function as her own and proper one, the only

condition essential to its proper fulfilment was the maintaining of an

absolutely unimpeachable coinage. The rapidity with which the precious

metals left her possession was simply due to the fact that Spain did so

maintain her coinage and for a sufficiently lengthened period. The

goodness of her coins exalted them above the prevailing rates in France

and the Netherlands, and they were eagerly sought in consequence. The

monies that did not, and could not, normally leave her possession by

ordinary way of trade left her by means of arbitrages working on the

system of bimetallism, which existed unacknowledged.[13] It was this

commanding quality of the Spanish coins that led to the adoption of

their system by France in 1641. That in the case of Spain we hear no

complaints of depletion of coinage and commercial disturbance resulting

therefrom, such as mark the history of the other countries of Europe, is

simply due to the fact that her stock of metals was continually being

replenished, and that she had no commerce to be disturbed. The gold and

silver of America came to her in a steady stream and left her for the

Netherlands and elsewhere in a stream as steady; and so long as that

flow was turned through her dominion, so long as the main sources of

precious metal-mining were American, and the product a

monopoly-possession of Spain, she stood above, and felt no immediate

harm from, the bimetallic law which insatiably sucked away her wealth.

Until the time came, therefore, when she lost her monopolist position in

this matter the monetary history of Spain is free from those features of

disturbance, commercial agitation, monetary conferences and edicts,

which are common to the rest of Europe, and consist merely of a record

of Mint ordinances regulating the fineness of her coins and slowly

adjusting them to the general movements of the century. Only in the case

of the first of these--the edict of Juan and Don Carlos, 1537, by which

the standard of _coronas_ and _escudos_ was fixed at 22 quilates, "which

is the standard of the greater escudos of France and Italy"--has the

enactment any comparative or international bearing.

For sixty-one years after the settlement of 1497 there had been no

alteration of the monetary system. In 1523 the Cortes of Valladolid had

petitioned the King, Charles I., to lower the standard and content of

the gold coin, "so that in weight and value they may pass equal with the

_crowns of the sun_ which are made in France, so that by these means

they will no longer draw our gold from the kingdom." In its ignorance

this Cortes also demanded that the silver monies should be reduced and

issued on a relatively depreciated footing. It was a matter of thirteen

years before Charles yielded and adopted the measure suggested, in the

edict of 1537, already referred to, and it may be safely said that by

the time of its adoption the need for the measure had passed away. Any

disturbance and loss of her stock of precious metals caused by the

general movement which marks itself in European history about 1519-20,

and which shows itself in Spain in the petition of the Cortes of 1523,

was quickly redressed by the inrush of metals from America. Finding gold

and silver come to her easily, Spain cared little how they went. After

the edict of 1537 there is only one complaint of the export of coin

recorded in the legislative enactments of the country, viz. in 1552,

when it was decided to alter the alloy of the billon money in order to

avoid its exportation, "as we are given to understand that its intrinsic

value is greater in other countries than here."

[Sidenote: SPAIN: PASSIVE ATTITUDE]

The Mint edicts of Spain during the years 1500-1660 simply follow in the

wake of the general movements of prices in Europe generally. The

authorities were perfectly passive to the export of the precious metals,

and no attempt was made to manipulate the ratio in such a way as to

arrest the outflow. The conduct of Philip II., in 1566, in still further

raising the denomination of the gold coins by one-seventh has the same

passive aspect, although it has been attributed to a mere base desire on

the part of Philip to fill his depleted treasury by a partial

debasement. A comparison of the movements of metals and prices in France

and Spain will show that the advance was only normal and general, and

the further changes which were made in 1609 and 1612 have this same

normal character, and call for no comment. At the points enumerated it

is quite evident that Spain merely and mechanically followed the general

trend of the precious metals and prices through the century. There is no

expression of aggrievement, either slight or acute, at the precious

metals leaving her. While every other country was occupied seriously,

sometimes desperately, with the question of how to guard their stocks of

them, the eyes of the Spanish Government and the nation's mind were

fixed only on conquest and imperial growth. The cost of her empire was

such that at the accession of Philip III., 1598, the national debt was

over a hundred million ducats, an absolutely unparalleled sum for the

time. When, therefore, the Spanish Government began the enormous issues

of base billon money which mark the reign of Philip IV., it is to be

looked upon as a financial, or treasury, or budget expedient, and

totally unconnected with any currency movement, pure and simple. These

issues were so great that, in 1625, the premium on gold and silver, as

compared with billon monies, was fixed at 10 per cent.; in 1636, at 25

and 28 per cent.; and, in September 1641, at 50 per cent. (See account

of Spanish monies, Appendix III.)

Such base monies always tend to become the only _visible_ currency of a

land. But, save as thereby facilitating the denudation of Spain's store

of precious metals, this matter of the depreciation of her billon money

has practically little or no relation to the general movements of the

two precious metals which we are investigating. It has more resemblance

to an over-issued and depreciated paper currency.

Of that ebb and flow, that oscillation and instability in the metals,

which make the study of the other currency histories of Europe during

this period so instructive an object-lesson of the effect and influence

of a bimetallic law and system, Spain shows not a trace. She received

the metals in a steady stream, and emitted them in a steady stream. They

poured _through_ her. Her function was that of distributor, and she

performed it. When the time came that her monopoly of the metals ceased,

her remedy against the ruin of a bimetallic law was removed, and she

became as signal an instance of its malignant operation as any--France,

England, or Germany. Until that time came she had her remedy against

immediate ruin in her yearly argosy, with its blood- and toil-stained

tribute.

England.

To come to England.

The following tables give a succinct synopsis of the general course of

her gold and silver coinage during this period:--

[Sidenote: ENGLAND, 1500-1660]

TABLE OF ENGLISH SILVER COINS, 1500-1660.

+------+--------------+------------++------+--------------+------------+

|Date. |Denomination. | Weight in ||Date. |Denomination. | Weight in |

| | |Troy Grains.|| | |Troy Grains.|

+------+--------------+------------++------+--------------+------------+

| 1504 | Penny, | 12 || 1552 | Penny, | 8 |

| | Groat, | 48 || | Shilling, | 96 |

| | Shilling, | 144 || | | |

| | | || 1553 | Penny, | 8 |

| 1527 | Penny, | 10-1/2 || | Groat, | 32 |

| | Groat, | 42-1/2 || | Shilling, | 96 |

| | | || | | |

| 1543 | Penny, | 10 || 1560 | Penny, | 8 |

| | Groat, | 40 || | Groat, | 32 |

| | Shilling, | 120 || | | |

| | | || 1601 | Penny, | 7-3/4 |

| 1549 | Shilling, | 80 || | Shilling, | 92-3/4 |

+------+--------------+------------++------+--------------+------------+

TABLE OF THE ENGLISH GOLD COINS, 1500-1660.

+----------------------+--------------+---------+---------------+---------+

| |Denomination. |Weight | Fineness. | |

| Date. | |in Troy +-------+-------+ Equiv- |

| | |Grains. |Carats.|Grains.| alents. |

+----------------------+--------------+---------+-------+-------+---------+

|Henry VII., 1489 |Sovereign, | 240 | 23 | 3-1/2 |L1 0 0 |

| | | | | | |

|Henry VIII., 1527 |Rose Nobel | 120 | 23 | 3-1/2 | 0 11 3 |

| |or Rial, | | | | |

| |Sovereign, | 240 | 23 | 3-1/2 | 1 2 6 |

| 1544 |Angel, | 80 | 22 | 0 | 0 8 0 |

| |Crown, | 57-21/67| 22 | 0 | 0 5 0 |

| |Pound, | 200 | 22 | 0 | 1 0 0 |

| 1545 |Crown, | 48 | 20 | 0 | 0 5 0 |

| |Pound, |192 | 20 | 0 | 1 0 0 |

| | | | | | |

|Edward VI., 1549 |Pound, |169-7/17 | 20 | 0 | 1 0 0 |

| 1550 |Angel, | 80 | 23 | 3-1/2 | 0 8 0 |

| |Sovereign, |240 | 23 | 3-1/2 | 1 4 0 |

| 1551 |Pound, |178-8/11 | 22 | 0 | 1 0 0 |

| | | | | | |

|Mary, 1553 |Angel, | 80 | 23 | 3-1/2 | 0 6 8 |

| | | | | | |

|Elizabeth, 1558 |Angel, | 80 | 23 | 3-1/2 | 0 10 0 |

| |Sovereign, |240 | 23 | 3-1/2 | 1 10 0 |

| |Pound, |174-8/11 | 22 | 0 | 1 0 0 |

| 1601 |Angel, | 78-66/73| 22 | 0 | 0 10 0 |

| |Pound, |171-61/67| 22 | 0 | 1 0 0 |

| | | | | | |

|James I., 1603 |Pound, |171-61/67| 22 | 0 | 1 10 0 |

| 1604 |Unit and its |154-2/3 | 22 | 0 | 1 0 0 |

| |fractions, | | | | |

| |the Double | | | | |

| |Cr., Brit- | | | | |

| |ish Crown, | | | | |

| |and Thistle | | | | |

| |Crown, | | | | |

| 1605 |Angel, | 71-1/9 | 23 | 3-1/2 | 0 10 0 |

| 1610 |Angel, | 71-1/9 | 23 | 3-1/2 | 0 11 0 |

| | | | | | |

|Gold raised 10 p. ct. |Unit, |154-26/31| 22 | 0 | 1 2 0 |

| 1619 |Angel, | 64-11/15| 23 | 3-1/2 | 0 11 0 |

| | | | | | |

|Charles I. 1625 |Angel, | 64-11/15| 23 | 3-1/2 | 0 10 0 |

| |Unit, |140-20/41| 22 | 0 | 1 0 0 |

+----------------------+--------------+---------+-------+-------+---------+

TABLE OF THE VALUE IN PENCE OF THE GRAIN OF GOLD (23 c. 3-1/2 gr. Fine)

IN THE VARIOUS GOLD COINAGES OF ENGLAND, 1500-1660.

+-------------------+--------++------------------+--------+

| | Pence || | Pence |

| Date. | per || Date. | per |

| | Grain. || | Grain. |

+-------------------+--------++------------------+--------+

| 1527 | 1.125 || 1601 | 1.626 |

| 1544 (22 carats) | 1.281 || 1603 (22 carats) | 2.236 |

| 1545 (20 carats) | 1.470 || 1604 | 1.655 |

| 1549 (22 carats) | 1.518 || 1605 | 1.27 |

| 1550 | 1.2 || 1610 | 1.856 |

| 1551 (22 carats) | 1.425 || 1619 | 2.052 |

| 1553 | 1.0 || 1625 | 1.851 |

| 1558 | 1.5 || 1625 (22 carats) | 1.838 |

| 1558 (22 carats) | 1.425 || | |

+-------------------+--------++------------------+--------+

[Illustration: TABLE OF THE MOVEMENT OF GOLD & SILVER IN ENGLAND

1500-1680]

The testimony of these tables is perfectly general. They establish,

roughly speaking, just such an advance of price as befell the whole of

Europe. They do not witness the oscillation in the coinage, and the

commercial disaster due to the action of bimetallic law. For the

evidence of this latter, however, there is ample store of material in

the State papers of England throughout the period.

The moment prices began to rise on the Continent good English gold

tended to disappear and flow away, being replaced by continental coins

of lower contents (or higher denomination). The stress of this practical

diminution of the currency was made all the greater by the simple fact

that the increasing trade which accompanied such rise of prices demanded

an expanding rather than a contracting currency.

[Sidenote: WOLSEY'S ADMINISTRATION OF THE MINT]

The very year, therefore, 1519, which marks the commencement of the

rise for the Continent generally, marks the commencement also of

agitation in England with regard to the supply of the precious metals.

There is preserved among the State papers at the English Record Office a

paper of advice from a German of the name of Herman King to Wolsey,

dating in June 1519, "How to provide bullion from Germany for this realm

with the greatest profit." He advises contracting for a fixed supply of

metal at a certain price, which he puts down, and adds: "If Wolsey will

appoint a person to receive the money, I will engage to deliver 2000 or

4000 marks weight yearly at this price, but it must be secretly, as, if

the purveyor were discovered, he would be in great danger, and the

(German) princes would not suffer any silver to depart because of their

own Mints."

Four years later the effects of the exchange had made themselves so felt

that Henry was obliged to make a treaty with the Emperor, Charles V.,

"for the reformation of old and new money," 1523. An attempt was made to

tie down the chief coins in exchange--the gold _real_ of Flanders, the

gold _carolus_ and the _double carolus_ of Spain--and it was further

agreed (Article IV.) that no new money of Germany, Italy, Spain, France,

or elsewhere, should be given in payment to English merchants, unless it

had a fixed value in sterling money by consent of both princes.

In December of the following year Wolsey was meditating sending

commissioners to the Low Countries to require that all monies valued

too high should be reduced to their normal rate, but he was informed by

Knight, resident at Mechlyn, that, "having spoken with several who hear

daily the council's opinion, they think it is not likely to be done

while the war continues, as the chief merchandise now is finances; and,

besides, as their 'goldes' are highly esteemed in France, if they lower

them they will all be carried thither."

Any such method of procedure as this of Wolsey's was bound to be futile,

and Henry's Government fell back on the much wiser plan of altering the

denomination of the coins. On the 24th July 1526, a commission was

issued to Wolsey "for increasing the sterling value of the coinage to an

equality with the rates of foreign currency." The reciting information

contained in the commission itself is perfectly succinct and clear in

its bearing--"one pound weight of angel gold (i.e. 23 carats 3-1/2 grs.

fine) is worth, in current money, L27; by alloy of 1/11 it is worth L29,

6s., of which 11s. is allowed the Mint master for coining. In return he

gives the merchants 108 crowns of the rose, at 5s., really worth but 4s.

10-1/2d., which makes L26, 6s. 8d. So that there is a clear gain of 48s.

4d."

The investigations of the commission were followed by a proclamation on

the 22nd August 1526, fixing an altered tariff of exchange. _Crowns of

the sun_ were put at 4s. 6d., which only four years before had been at

4s. 4d., while the _ducat_ was raised from 4s. 6d. to 4s. 8d.

Finding the enhancing of the gold and the export of specie still

continue, an inquest was held, on the 30th October 1526, into the

fineness and value of the coins. As a result of the verdict of the jury,

a second proclamation was issued in the same year, dated November 5th,

"to check the exportation of specie arising from the increased value of

currency on the Continent." The sovereign was put at 22s. 6d. (having

previously been rated at 20s. 6d.), and other gold coins in proportion.

Silver coinage was to pass at previous rates, but a new issue was to be

made, in which the ounce Troy was to be coined into 3s. 9d. Finally,

foreign _ducats_ were to be taken as bullion, no rate of exchange being

even fixed.

At the same time Wolsey was attempting to negotiate for a supply of gold

from Antwerp to replenish the currency. On this subject there exists a

curious letter from his agent in Antwerp, dated 21st November 1526.

"These two days," says Hacket, "I have been trying to agree with the

principal merchants about the exchange, but none would make any bargain,

as you (Wolsey) have limited me to 4s. 6d. for the _ducat_, and as a

ducat of such gold as they would be bound to pay would be worth 4s. 10d.

in the Mint. They must receive either _ducats_, or a _crown of the sun_

and a _groat_, for every ducat, or the same in _angellets_. The best

thing would be for one or two of their factors to see you (Wolsey). The

gold can be kept at home for 2 or 3 more per cent., for they would be

glad to give that to take it out of the realm."

The new coinage of 1527 was in complete accordance with the proclamation

of the preceding November. As far as the tariff or absolute exchange was

concerned, it served to redress the balance, and thus to bring the

English coin abreast of the continental. In the matter of the ratio,

however, hardly any change was made. In the coins of the old standard

(i.e. 23 carats 3-1/2 grs.) the ratio remained as before, 1:11-151/755;

in those of the new standard (i.e. 22 carats) it was raised slightly (to

1:11-59/220). Neither in the appointment of the exchange, however, nor

in the matter of the ratio, could the measure be more than temporarily

successful under the conditions. The necessity remained as constantly as

ever to watch the changing continental tariff, and to accommodate the

English system to it. One State paper, dating apparently in 1529, thus

pictures the situation at the time:--

"Disputes in London between English, Italian, Flemish, and Spanish

merchants, as to the exchange, because of the last edict about gold. The

writer knows of the importation of 100,000 _crowns_ and L10,000 in gold,

which will be exported again unless care is taken. In Flanders, directly

after this proclamation, gold was publicly put at a higher price than

before--a noble at 24 _groats_," and so on. The writer, therefore,

recommends that the searchers at the various ports should be warned to

attend to their duty and see that no gold was carried away from the

realm.

[Sidenote: ENGLAND AND THE NETHERLANDS IN 1537]

No recoinage, however, or change in the Mint rates, occurred for some

years, and it must be taken as _prima facie_ evidence 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: "_Gold_

was 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_, sterling _groats_, 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 the alteration 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 L3000

sterling in _angels_ and _ducats_. We seek all the _angels_ here 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."

[Sidenote: 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 10-1/2 to 10 grains, and shortly after 1544 the angel

was advanced from 7s. 6d. to 8s. The proclamation which enforced the

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 11-59/220 to 10-10/23. 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 Henry VIII. and the days of his son Edward VI. 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

showing _how_ or _in what way_ a debasement _does actually_ facilitate

the malignant action of bimetallic law.[14] Further, the present

instance of debasement is the only one on record in English currency

history, and the testimonies regarding it are of extreme interest.

[Sidenote: 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 priori_ argument. 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 the third year of

Edward VI.--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 cost me

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 L200 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

beyond the 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 brought over 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 that is 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 Henry VIII., 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.

[Sidenote: 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 called _testoons_ ... 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 French _crowns_ and Flemish or Burgundian _crowns_. 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.

[Sidenote: 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 were

made 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 were _exported_, _diminished_, and

_returned_, 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 the _angel_ and _sovereign_ of

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 gold _pistole_ for 6s., and the silver

_real of eight_ for 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 Mint prices 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 1:11-1/10 to 1:10-5614/5921.

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

James I.

[Sidenote: 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

note that 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 James I. and Charles I., 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 the coining 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

154-26/31 grains, while that of Elizabeth's was 171-61/67. In the

following year the angel was reduced from 78-66/73 grains to 71-1/9. 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 he drew 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.

[Sidenote: 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

and 1/2.

"4 grains makes a caret. 24 caretts an oz.

"In silver every pound lacks 4s. 6d.

"A pound is 3^{li} in tale.

"In 6 angells wch is in tale 3^{li}, 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 the Loss

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 L3, 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 L500,000 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."

[Sidenote: 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 Low Countries"; "Notes

of the Advantage arising to the Crown of England from raising the

Shilling to 13-1/2 Pence, and the Proportion of Gold from 12-1/2 to 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 L6000 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."

[Sidenote: 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 the currency 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 L140,000, and it was stated that

since the beginning of the reign a matter of L7,000,000 of gold had been

surreptitiously exported. On the 31st July 1619 proclamation was issued

for a new coinage. The gold _angel_ was reduced in weight from 71-1/9

grs. to 64-11/15, 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 output of 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."

[Sidenote: 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 people at 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, 433

Manchester Hall 853

("Besides many in the country which are not sent off for want

of a market.")

Storehouse for Gloucester, Worcester, Kent, Somerset 1163

(Mostly belonging to Kent.)

Wiltshire Hall 560

Northern Hall 5159

Leadenhall 3057

(Cloths from Suffolk and Essex.)

Devonshire Kerseys 423

The merchant-adventurers were appealed to, to buy 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

Spanish _reals_ and 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 on the following day, August 31, to encourage the

bringing in of money by making the Spanish _real_ pass 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 Spanish _real of eight_ to be equal to 4s. 6-1/2d., as compared

with the new shilling coin; and on the 4th of March following a

proclamation was issued to make these Spanish _reals_ current 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 of the 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 L1070, whereas in the four succeeding years the

silver coinage at the Tower Mint amounted to L205,500.

[Sidenote: 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 no silver 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. 3-1/2d., 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

James I. 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.

[Sidenote: ENGLAND: CHARLES I.]

The reign of Charles I., and the period of the Commonwealth, display

similar characteristics to that of James I., 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 be current in England by proclamation. The double _pistolets_

weighing 16s. to be raised to 15s.; the _piece of eight_ weighing 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 be bought 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 of _dollars_ and Spanish money they

furnish yearly to merchants that trade for Norway and Denmark, to

transport silver for those parts."

[Sidenote: ENGLAND: THE SITUATION IN 1638]

The drain of coinage to France he distinctly attributes to the raising

of the French coins. "At this present in France the native merchants

there match us with such a point of policy that it would be hard for our

merchants to be master of.... Since the raising of our 20s.-piece to

26s. there ... they have advanced the price of their commodities

according to their advanced monies, to the full sum of 6s. in the pound

more than they were before."

[Sidenote: ENGLAND: SIR ROBERT STONE ON THE MINT]

During the Civil Wars there is a remarkable paucity of reference to the

subject, doubtless owing to the supreme importance of the war itself. On

the 26th August 1643, and on the 24th February 1643-4, the Long

Parliament issued orders, on the petition of merchant strangers who were

prevented from importing bullion by the rigours of the search of their

vessels, for their due encouragement. The petitions would argue a

tendency towards an importation of specie, but in 1649 this was again

changed, and a heavy export became perceptible. There can be little

doubt that the initial impulse came from the new coinage which was

instituted by the Act of 17th July 1649, and by the table of weights for

the Commonwealth coins which that Act adopted. For two years and more

both Council and Parliament were exercised in mind with regard to this

export of specie and the consequent decay of trade, and draft Acts to

prevent the export, as well as many other propositions, were had under

long consideration. No measures were adopted, and an Amsterdam

correspondent of Sir Robert Stone, in May 1652, thus gave his opinion of

the wisdom of the Mint officials and the Government in this process of

drift: "Experience has taught me that when the State does not keep

extraordinary watch, and the laws are not put into execution against

culling and sorting out the heaviest coins to be transported, and the

light and clipped left behind, it is a great debasing of the current

value of coin. All your silver money (i.e. in England) is thus abused by

goldsmiths and others. And when the State does not employ such as can

discover those offenders, but puts persons into the Mint who have had no

experience, great damage must follow. For there are bankers and

exchangers in Holland who know the ignorance of all your present Mint

men that have any place of trust, and laugh at them. They say when the

Mint in the Tower flourished, old Andrew Palmer, Mr. Rogers, and one

Cojan were there, who were all subtle Mint men, and held correspondence

here (i.e. in Amsterdam), and knew what to do to advance the Mint, and

would always find a way to bring grist to the mill. But now your Mint

comes to be neglected and money adulterated. Many of our bankers here

have a great trade with your goldsmiths and merchants in London for

English gold and heavy English silver. Your Mint will never go until

this be discovered, for these men are the sluices that drain all your

money. I believe there is at this day forty times more gold and silver

in the Low Countries than in England. About twelve years since the

French were forced to call in all their money, it being so clipped that

their commerce ran into confusion, and you have almost brought yourself

to the same point, the coin in Ireland being 20 per cent. less value

since the war. In England almost all your gold is transported, and the

little that is left is in hucksters' hands, that go to an exchange in

Lombard Street, and you must pay from L6 to L10, and sometimes more, to

have L100 in gold for silver. For who will take gold to the Tower to be

coined, and lose 2s. in 20s. of what they can make by transporting it?

We have more English gold in Amsterdam than you have (in England), all

sent within those twenty years, and great quantities of English silver

have weekly come over in pinks and Dutch men-of-war for years, to the

value of many hundred thousands of pounds, in return for coin. I

wondered at first how the merchants transported all the weighty and

culled English money into Holland, until one of the bankers told me. I

would have you inquire it and prevent it, for it is a most pernicious

thing. It is the goldsmiths, especially those in Lombard Street, which

are the greatest merchants, and London cashiers, and who will receive

any man's money for nothing, and pay it for them the same or next day,

and meantime keep people in their upper rooms to cull and weigh all they

receive, and melt down the weighty, and transport it to foreign parts,

sometimes without melting, and keep banks for all the principal coin in

Christendom in their shops."

The succeeding years of the Commonwealth saw little change in the

situation. In 1659 and 1660 the Council was still anxiously debating the

question of the transport of bullion and coin. But this chain of

phenomena refers to the third period in this history, and are to be

treated of in that connection.

[Sidenote: CLOSE OF THE SECOND PERIOD: RESUME]

In broadest and hastiest resume, and this by way of justification of the

length to which this chapter has been drawn out, the influence of

American gold and silver makes itself perceptible in 1520. For forty

years a level and equal advance in each of the precious metals and in

prices records itself, then the relative and absolute production of

silver increases enormously over that of gold, and the ratio is

disturbed. The inequality of the rate at which this change of ratio

spreads to successive countries, and is adopted in their various Mint

regulations, is the bullionist's or exchanger's opportunity, and the

disastrous effect of their activity results in the crisis of 1570 in

France, and 1622 in England and Germany. Properly speaking there has

been no subsequent crisis in European history fitly comparable with the

latter of these. If at all, there is only one comparison possible, and

that is the currency situation in which the monetary world is at this

moment, or which has come upon it since 1850--a period of bullion

inflation in which silver has, finally as yet, outweighed gold, to the

violent disturbance of the ratio. But, as will be seen, the other

conditions of the comparison are not reducible to, or expressible in,

similar terms, and so far the legitimate deduction fails. None the less,

the currency history of Europe during the sixteenth and seventeenth

centuries has a vital didactic importance.

FOOTNOTES:

[Footnote 9: The only accounts accessible are in Cabrera (see

Philippson's "Estimate of the Revenues of Spain," in his _Henrich IV.

and Philipp III._, vol. ii. p. 44), and relate only to the years

1599-1610. The amounts given are not the total yield of the American

mines, which is out of the question, but the amount of metal brought

yearly to Spain by the Silver Fleet. The amounts (without distinction of

the metals) were as follow:--

1599 8,000,000 Ducats.

1600 9,926,192 "

1600 10,000,000 "

1601 1,000,000 "

1602 10,000,000 "

1603 7,000,000 "

1604 14,500,000 "

1606 9,000,000 Ducats.

1606 4,500,000 "

1607 12,200,000 Pesos.

1608 9,000,000 Ducats.

1609 10,600,000 "

1610 10,000,000 "

]

[Footnote 10: For further details of the troubles of 1632-36, see

Vicomte D'Avenel, _Histoire de la propriete, etc._, i. 120, 121.]

[Footnote 11: Such is the statement of the proclamation itself. The

difference between the ratios as there proclaimed and the ratios given

in the table, pp. 40 and 69, is presumably due to the calculation being

made on the mark of pure metal. For the character of these figures of

ratios see the Preface.]

[Footnote 12: See Hirsch, i. 318.]

[Footnote 13: "The second (cause for the decay of the trade of Spain) is

the residence of many Genoa merchants amongst them, who are found in

good numbers to abide in every good city, especially on the sea coasts,

whose skill and acuteness in trade far surpassing the native Spaniards

and Portuguese, and who, by means of their wealth and continual practice

of exchanges, are found to devour that bread which the inhabitants might

otherwise be sufficiently fed with; and by reason that the King of Spain

is ever engaged to their commonwealth for great and vast sums at

interest, he is their debtor, not only for their moneys, but also for

their favour, which by many immunities throughout his kingdom he is

found continually to requite them, and amongst the rest it is observed

that there is no Genoa merchant resident in Spain, or any part, but has

a particular licence to transport the _rials_ and _plate_ of this

kingdom to a certain round sum yearly, which they seldom use really to

do, but sell the same to other nations that are constrained to make

their returns in plate for want of other more beneficial commodities,

which, for the certain profit it is found ever to yield in other

countries, is often preferred before all the other commodities of the

kingdom."--_Lewis Robert's Map of Commerce_, p. 165.]

[Footnote 14: By the action of bimetallic law is meant any action of bad

money on good--of worn money on new--of higher rated (or lower valuable)

money on lower rated (or higher valuable) money. It does not at all

matter, especially in cases of debasement, whether there are two metals

in the process or only one or even three. If a currency is silver, and

part of it is debased and part left good there is bimetallic action, and

the good disappears. Of course, the case is argumentatively and for

deduction's sake much clearer if a currency is truly bimetallic in the

ordinary sense.]