their passion, that if the Bank allowed interest to its customers, it must advance money to traders to make it. Some became extremely zealous for the morals of the nation, which were to be placed in imminent peril by the new Bank. Some pretended to dislike it for fear it should disappoint the King in the expected supplies. The domestic enemies of the Government were furious against it, because they saw how enormously it would strengthen the new dynasty

29. The immense benefit which accrued to the State by the establishment of the Bank, was shown by the increased vigour with which the war was carried on. The army assumed the offensive; and, in July, 1695, the King undertook the siege of Namur. At this time Mr. Michael Godfrey, the Deputy-Governor of the Bank, went over to Namur to arrange with the King as to the manner in which the money for the use of the army should be remitted. In the last days of July he ventured too near the town to speak to the King, during a heavy cannonade, and was killed at his side. Previously to this he had published a pamphlet on the subject of the Bank, which is of great historical importance with regard to the Currency. It is written in a strain of the warmest congratulation upon the great success of the experiment, which he had taken so leading a part in forwarding. He states that, whereas in the beginning of 1694, the Government tallies were at a discount of £25 to £30 per cent., in addition to the public interest, the Bank took them at par, and from the former heavy discount they had risen to a premium, so that they were then better than money, because there was 7 or 8 per cent. per annum benefit while they were kept, which never could have been done without the Bank. He said that those who lodged their money at the Bank had it as much at their disposal as if it were in the hands of the goldsmiths, or in their cash chest, and he certainly countenances an accusation which is constantly brought against the goldsmiths in contemporary pamphlets; for he says, that if the money which had been lodged with them for four or five years past had been deposited in the Bank, it would have prevented it from being so scandalously clipped, which he predicts would cost the nation some day a million and a half or two millions to repair. He notes it as very surprising and quite

unexampled, that after the nation had been at war for six years, and had spent £30,000,000, besides great quantities of bullion being exported and captured by the enemy, that there had been so great a fall in the rate of interest instead of a rise, as in all previous wars, which was entirely due to the Bank, and he predicted that it would, in the course of a few years, reduce it permanently to 3 per cent. He says that, within 30 years of that time, the public had lost between two and three millions by the goldsmiths and scriveners breaking, which would not have happened if the Bank had been established. He says that there were some who were for having a forced currency of bills or tallies, thinking that they might pass as well as bank bills, but they do not consider that it is nothing makes bank bills current, but only because all those who desire it can go when they will and fetch their money for them; and to force anything to pass in payment but money would soon end in confusion. He then enters into numerous arguments to show that any attempt at a forced currency would only end in damaging the public credit. He says that the chief reason of the indignation of the goldsmiths at the Bank was that they allowed 2d. per cent. per diem on their bank bills, which drew away customers from them. He says that the interest allowed to the holders of their bills amounted to £36,000 per annum

30. The year 1694 is remarkable as the one in which the first of those speculative manias occurred, which have, on different subsequent occasions, seized upon the nation. All the tricks, all the rogueries, which have been so familiar in the joint stock bubbles of later years, were rife at the time, but it is remarkable that while, in later times, these things have always sprung up when there was a greater abundance of capital than usual, in time of peace, this was at a time when a costly war had been raging for several years, and there was a great dearth of specie

31. We must now retrace our steps a little, and examine the condition of the Coinage, which is necessary to understand the subsequent history of Banking; for controversies on the subject

now began which have lasted almost till our own times; if indeed they may be even yet considered to be extinct

In April, 1690, the great scarcity of silver coins occasioned great public inconvenience. The goldsmiths complained to the House of Commons that they had ascertained that immense quantities of silver bullion and dollars had been exported. That many Jews and merchants had recently bought up large quantities of silver to carry out of the kingdom, and had given three half-pence per ounce above its regulated value. That this had encouraged the melting down of much plate and milled money, whereby for six months past no Bullion had been brought to the Mint to be coined. The House appointed a Committee, who verified these allegations. It was shown that the profit of melting down the milled money for exportation was about £25 per £1,000, and that the Mint price of silver was £5 2d. per ounce, but it was generally sold for 5s. 34d. The House, in consequence, passed one of their useless laws against exporting Bullion

The state of the Coinage now became every day more disgraceful. Quantities of base and counterfeit coin were thrown into circulation. The House of Commons addressed the King to abolish the private right of coinage of half-pence and farthings. The current coins had been for many years clipped and adulterated, which in 1694 reached such a height, that the silver coins current had lost nearly half their value, while a great part of the current money was only iron, brass, or copper plated

As this state of matters gave rise to the first great Currency debate of modern times, and brought about a great monetary crisis, we may dwell upon it rather fully

During 1694, the silver coinage became worse daily, and by the end of the year, guineas, which had originally been coined to represent 20s., gradually rose, till they reached 30s. The exchange with Holland fell 25 per cent., and it would have fallen still lower, only it was shewn that the real exchange was in favour of England. The exchange with Ireland fell so much that £70 there was worth £100 in England

The evils of clipping the coin reached so great a height at the end of 1694, that Mr. Fleetwood, the Chaplain-in-Ordinary to the

King and Queen, being selected to preach before the Lord Mayor and Aldermen on the 16th December, 1694, made it the subject of his sermon on the text, Gen. xxiii., 16. In an admirable sermon, or rather politico-economical discourse, he denounced the fraud and wickedness of clipping and debasing the coinage. He said (p. 19), that the money was clipped down nearly one half. He showed that he understood the subject a great deal better than many men a century later. He showed that, if the money generally were clipped, all the good and weighty money that remained must be exported. "The merchant that exports more goods from home than he imports from abroad, must unavoidably discharge the overbalance with good money; this he can never do with clipped, for it is not Cæsar's face and titles, but weight and goodness that procure credit. And, if a foreigner import more of his country's goods than he carries away of ours, the overbalance must be paid in weighty money, for the clipped will not go abroad. Now, if the exportation of our weighty money (which is only now the milled) be a mischief to a nation, we see it is occasioned chiefly by the clipping

32. The disgraceful state of the Coinage could no longer be overlooked by Parliament. On the 8th of January, 1695, a Committee was appointed to consider the subject. At this time, says the Parliamentary History, vol. v., p. 955 :-"The difficulty lay so heavy upon the Government, that a stop was almost put to trade and taxes. The current silver coin had for many years begun to be clipped and adulterated; and the mischief of late had been so secretly carried on by a combination of all people concerned in the receipt of money, and so industriously promoted by the enemies of the Government, that all pieces were so far diminished and debased, as that five pounds in silver specie was scarce worth 40s., according to the standard; besides an infinite deal of iron, brass, or copper washed over or plated." The Committee recommended that the money should be recoined into milled money. It estimated the expense at one million. That the new money should be of the same weight and fineness as the old. That the crown piece should be current at 5s. 6d. That various penalties should be imposed for offences against the coins. An Act was passed, statute 1695, c. 17, to prevent

counterfeiting and clipping the coin of the kingdom. This statute averred that it was notorions that the current coin had been greatly diminished by clipping, rounding, filing, and that many false and counterfeit coins had been clipped, for the better disguising thereof, and that these practices had been much occasioned by those who drove a trade of exchanging broad money for clipped money, and other arts and devices. It therefore, prohibited any person from exchanging, lending, selling, borrowing, buying, receiving, or paying any broad or unclipped silver money for more in tale, benefit, profit, or advantage than the same was coined for, and ought by law to pass for, under a penalty of 10s. for every 20s. so trafficked with. It also enacted that whoever should buy or sell, or knowingly have in his possession, any clippings or filings of the coin, should forfeit them, as well as a penalty of £500, and be branded on the right cheek with a hot iron. It forbade any one but a trading goldsmith, or refiner of silver, to buy or sell Bullion, under pain of imprisonment, and enacted numerous other vexatious penalties and regulations respecting the export of Bullion. All these absurd cruelties were wholly ineffectual, and, while multitudes of miserable wretches were dangling on the gibbets, clipping and counterfeiting were as rife as ever. Guineas which had originally been coined to be equal to 20s. had progressively risen as the silver got worse, till at this time they were current at 30s. of the base trash, which passed by the name of silver coin

The frightful disorder of the currency may be judged of by the following facts. In the months of May, June, and July, 1695, 572 bags of silver coin, each of £100, were brought into the Exchequer, whose aggregate weight, according to the standard, ought to have been 18,451 lbs. 5 oz. 16 dwts. 8 grs.; their actual weight was 9,480 lbs. 11 oz. 5 dwts., making a deficiency of 8,970 lbs. 7 ozs. 11 dwts. 8 grs., showing a deficiency in the weight of the current coins in the ratio of 10 to 22. One writer says (An Essay for regulating of the coin. A. V., Sept. 2, 1695)-" Upon trial I have found that 58. of milled money hath weighed 88. of the present current money, and 38. of the 8s. was not clipped, only worn. Again, I have found 108. in milled money to weigh 218. of the clipped money.

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