The History of Currency, 1252 to 1896
CHAPTER II
From the Discovery of America to the end of the First Cycle of the Influence of the Metals of the New World on European Currencies, 1493-1660
The last decade of the fifteenth century witnessed the discovery of America, and therein the monetary salvation and resurrection of the Old World. The end of the second quarter of the seventeenth century in its turn witnessed the end of the first phase, and the most important, of the New World upon the destinies of Europe. Practically and historically the century and a half intervening between 1493 and 1660 may be treated as a single cycle with a single aspect. It was a time of unexampled increase in the imports of the precious metals, of equally unexampled rise of prices, and at the same time of feverish instability and want of equilibrium in the monetary systems of Europe. Two general statements may be premised.
1. Broadly speaking--of prices, i.e.--no movement of any note is perceptible, or records itself in legislative enactment until about 1520, so gradual and at first unimportant was the flow of metal from America. What did come at first was not silver so much as gold, and represents the puny and blood-stained plunder of ornaments from the natives. If this import tended to turn the balance in any way, it was in the direction of depreciation of gold as compared with silver. But during this first quarter of the sixteenth century, possibly more influence on the maintaining of equilibrium is to be attributed to the largely increased home production of silver. The silver mining in the Saxon Harz, in Bohemia, and the Tyrol, had received a strong impulse towards the close of the fifteenth century, while gold was obtained during the same period in appreciably greater quantities in the archbishopric of Salzburg, and in Hungary, as well as from Africa.
[Sidenote: GENERAL STATEMENT]
2. In this second period of European bimetallic history, the centre of European monetary exchanges passes from Italy to the Netherlands. Antwerp takes the place of Venice and Florence. There is a double and deep significance in the fact. It is not merely that the trade route had changed in such a way as to lay the foundation for that development of European commerce, of which England is the highest expression in our own days; it is that by the change was provided a more effective safeguard against precipitate and overwhelming depreciation. The centre of European exchanges--Antwerp in the sixteenth, as London to-day--has always performed one supremest function--that of regulating the flow of metals from the New World by means of exporting the overplus to the East. The drain of silver to the East, discernible from the very birth of European commerce, has been the salvation of Europe, and in providing for it Antwerp acted as the safety-valve of the sixteenth-century system, as London has done since. The importance of the change of the centre of gravity and exchange from Venice to Antwerp lies therefore in this fact. Under the old system of overland and limited trade, Venice could only provide for such puny exchange and flow as the mediæval system of Europe demanded. She would have been unable to cope with such a flood of inflowing metal as the sixteenth century witnessed, and Europe would have been overwhelmed. But the foundations of the commerce of the Netherlands were laid wider. Together with Portugal she opened an extensive empire along the coasts of Africa and in the Indian East; and the very time which gave birth to the revolution in the production of the precious metals in America saw provision made for the regulation of its outflow through the commerce and exchanges of Antwerp to India. In the modern system this would be a theoretically perfect world-mechanism, and its working would be normal and healthy, and the safest indicator of commerce. That it was not so to seventeenth-century Europe was simply due to the existence of a disordered, understood bimetallic system, and the crisis to which the working of this mechanism brought her has perhaps not been since equalled at any point of time.
The underlying causes of this crisis have been already described. The currencies of the trading nations of Europe were all unconsciously bimetallic. Throughout, there was in existence one class who grasped the _fact_ without any knowledge of the _theory_, and profited by it--the merchant exchangers. There was constant oscillation--change of ratio, and the least alteration of the condition of one metal made it a lever for operations upon the other. These operations were arbitrage merely. They had no relation to the ebb and flow of commerce as modern arbitrage transactions have. It was a financier's opportunity of _private_ gain, and for _private_ gain the system was worked. The ebb and flow of European currencies, which the sixteenth and seventeenth centuries witnessed, were as unnecessary (i.e. for the purposes of her commerce) as they were disastrous.
It is sufficient to indicate the tendency of this argument, and to leave the illustration of it to the following pages.
To return to the yield of precious metals during the years under discussion. Any estimate must be conjectural, in the absence of the accounts of the Spanish Mints.[9] This understood, it may be thus tabularly represented.
[Sidenote: PRODUCTION OF THE PRECIOUS METALS]
+-----------+-------------+-------------+--------------+--------------+ | | Annual | Annual | Proportion | Proportion | | Date. | Average | Average | of Gold | of Silver | | | Production | Production | in Total. | in Total. | | | of Gold. | of Silver. | | | +-----------+-------------+-------------+--------------+--------------+ | 1493-1520 | £800,000 | £600,000 | 57% | 43% | | 1521-45 | 1,000,000 | 1,100,000 | 47% | 53% | | 1545-60 | 1,200,000 | 3,850,000 | 23.6 | 76.4 | | 1560-80 | 855,000 | 3,640,000 | 20.8 | 79.2 | | 1581-1600 | 1,030,000 | 4,945,000 | 17.2 | 82.8 | | 1601-20 | 1,190,000 | 4,820,000 | 19.8 | 80.2 | | 1621-40 | 1,157,850 | 3,916,300 | 22.8 | 77.2 | | 1641-60 | 1,223,400 | 3,516,500 | 25.8 | 74.2 | +-----------+-------------+-------------+--------------+--------------+
The general tendency of the first years of this period (1493-1520), if discernible at all, seems rather in favour of silver, and to the depreciation of gold. The average ratio was 10.75, speaking very generally, and with every mental reservation as to its applicability at any particular time and place. An equally rough average for the preceding time (see Chapter I.) would give a ratio of 11.28, showing apparently a movement in favour of silver owing to the increased production of gold.
The succeeding quarter of a century, 1521-45, covers the time from the conquest of Mexico to the commencement of the exploitation of the silver mines of Potosi. Looked at from the point of view of prices in Europe,--as evidenced most circumstantially in the _Plakkaats_ of the Netherlands, to which reference will be immediately made,--these years display stability--i.e. a steady maintaining of the advance gradually and already made between the years 1493 and 1520, and chronicled for us in the prices of 1521--rather than any further great and readily perceptible rise. For example in brief. In the Flemish _Plakkaats_ the French crown is quoted at an equivalent of 1 florin 15-1/2 stivers in 1499, and of 1 florin 19 stivers in 1522, when an attempt was made to reduce it to 1 florin 15-1/2 stivers again. From 1522 to 1548 no further advance, but retrogression rather is quoted thus:--
+-------+-----------------------------------+---------+-----------+ | Date. | | Florin. | Stivers. | |-------+-----------------------------------+---------+-----------| | 1519 | French Crown quoted at | 1 | 15-1/2 | | 1522 | " " | 1 | 19 | | 1526 | " " {(Real) | 1 | 19 | | | " " {(Attempted) | 1 | 15-1/2 | | 1539 | " " {(Real) | 1 | 17 | | | " " {(Attempted) | 1 | 15 | | 1548 | " " | 1 | 17 | | 1552 | " " | 1 | 19 | +-------+-----------------------------------+---------+-----------+
This general conclusion will be found quite invariably illustrated in the tables of Netherland coins (below).
[Sidenote: CHARACTERISTICS OF THE PERIOD, 1493-1548]
With regard to the annual average production of the metal, there is perceptible a slight movement towards the depreciation of silver or in favour of gold. This might naturally be expected to express itself in a somewhat higher ratio. But the differentiation is so slight as hardly thus to indicate itself, and certainly not consistently, so far as the ratio is capable of ascertainment.
In France the ratio in { 1519 was 11.76 { 1540 " 11.82
In the Netherlands the ratio in { 1520 " 10.68 { 1540 " 10.62
In England { 1527 " 11.23 { 1552 " 11.1
In Germany { 1524 " 11.38 { 1551 " 11.38
Broadly speaking, therefore, there is a certain homogeneity about the first two periods, 1493-1520 and 1520-48, of the new era. These fifty-five years mark a time of general advance on prices achieved by 1520 and maintained unequally up to 1548, but an advance which was steadily and almost fairly level on the two lines of gold and silver, so that the perfectly well-established advance of prices generally is accompanied with no great disturbance of the ratio in itself.
In contrast with this all the succeeding periods have, up to 1660, a distinct character and statistical bearing. An enormous and ever-increasing advance in general prices occurs, but it is no longer, as before, on level lines of the two metals equally. The proportion of the production of the two metals changes, so rich was the yield of the silver mines of Potosi. From being the same with that of gold, the value of silver produced suddenly rises to three times and then to four times that of its rival; and at once the ratio changes, bringing with it all its accompaniment of feverish instability and flux.
[Sidenote: STATEMENT OF THE RATIO, 1500-1660]
The average result in the ratio was as follows:--
1545-60 11.30 1561-80 11.50 1581-1600 11.80 1601-20 12.25 1621-40 14.00 1641-60 14.50 1661 15.0
As far as can be ascertained the detailed statement of the ratio during the whole period, 1500-1660, is as follows:--
+------+------+------+-------+------+---------+------------+-------+------+ | | | N | | | | | | | | | | e | | | | | | | | | E | t | | | Germany |S.W. Germany| | | | Date.| n | h |France.|Spain.|(Imperial|(Wurtemburg,|Venice.| Date.| | | g | e | | | System).| Strasburg, | | | | | l | r | | | | Colmar). | | | | | a | l | | | | | | | | | n | a | | | | | | | | | d | n | | | | | | | | | . | d | | | | | | | | | | s | | | | | | | | | | . | | | | | | | +------+------+------+-------+------+---------+------------+-------+------+ | 1474 | | | | 9.824| | | | 1474 | | 1475 | | | |10.985| | | | 1475 | | 1480 | | | |11.555| | | | 1480 | | 1483 | | | |11.675| | | | 1483 | | 1484 | | | | | 11.37 | | | 1484 | | 1489 | | 10.5 | | | 11.2 | | | 1489 | | 1497 | | | 11.83 |10.755| | | | 1497 | | 1506 | | | |10.262| | | | 1506 | | 1511 | | | | | | | | 1511 | | 1517 | | | | | 10.31 | | 11.32 | 1517 | | | | | | | (Erfürt)| | | | | 1519 | | 10.15| 11.76 | | | | 12.04 | 1519 | | 1524 | | | | | 11.38 | | | 1524 | | 1527 | 12.23| | | | | | 10.03 | 1527 | | 1529 | | | | | | | 11.07 | 1529 | | 1537 | | | |10.760| | | | 1537 | | 1539 | | | 11.68 | | | | | 1539 | | 1540 | | 10.62| 11.82 | | | | | 1540 | | 1542 | | | | | | 11.27 | | 1542 | | 1548 | | 11.0 | | | | | | 1548 | | 1549 | | | 11.86 | | | | | 1549 | | 1550 | | | 12.07 | | | | | 1550 | | 1551 | | | 11.47 | | 10.83 | | | 1551 | | 1552 | 11.1 | | | |(Imperial| | | 1552 | | | | | | | Edict) | | | 1552 | | 1553 | 11.05| | | | | | | 1553 | | 1554 | | 10.70| | | | | | 1554 | | 1559 | 11.79| | | | 11.44 | 11.55 | | 1559 | | 1560 | | | 11.77 | |(Imperial| | | 1560 | | | | | | | Edict) | | | | | 1561 | | | | | | | 10.81 | 1561 | | 1562 | | | | | | 11.01 | 11.53 | 1562 | | 1566 | | | |12.294| 11.55 | | | 1566 | | 1572 | | 12.42| | | | | | 1572 | | 1573 | | | 11.76 | | | | 12.33 | 1573 | | 1575 | | | 11.68 | | | 11.11 | | 1575 | | 1576 | | 12.67| | | | | | 1576 | | 1578 | | | | | | | 10.61 | 1578 | | 1579 | | 10.62| | | | | | 1579 | | 1582 | | | | | | 11.40 | | 1582 | | 1583 | | | | | | 10.93 | | 1583 | | 1585 | | | | | 11.63 | | | 1585 | | 1586 | | 10.66| | | | | | 1586 | | 1587 | | | | | | 12.03 | | 1587 | | 1589 | | 11.21| | | | | | 1589 | | 1590 | | | | | | 11.86 | | 1590 | | 1590 | | | | | | 11.32 | | 1590 | | 1591 | | | | | | 10.95 | | 1591 | | 1593 | | | | | | 11.18 | | 1593 | | 1594 | | | | | | 11.70 | 12.34 | 1594 | | 1596 | | 10.90| | | 11.50 | | | 1596 | | 1597 | | | | | | 11.78 | | 1597 | | 1597 | | | | | | 12.16 | | 1597 | | 1598 | | 11.29| | | | | | 1598 | | 1599 | | | | | | 11.05 | | 1599 | | 1601 | 10.90| | | | | 11.86 | | 1601 | | 1602 | | | 11.88 | | | 12.22 | | 1602 | | 1603 | | 11.64| | | | 12.24 | | 1603 | | 1605 | 12.15| | | | | 12.01 | | 1605 | | 1605 | | | | | | 12.49 | | 1605 | | 1606 | | 11.92| | | | | | 1606 | | 1607 | | | | | | 12.61 | | 1607 | | 1608 | | | | | | 12.16 | 11.04 | 1608 | | 1608 | | | | | | 12.46 | | 1608 | | 1610 | | 12.54| | | 12.2 | | | 1610 | | 1611 | 13.32| | | | | 12.08 | | 1611 | | 1612 | | | |13.52 | | 12.30 | | 1612 | | 1613 | | | | | | 12.35 | | 1613 | | 1613 | | | | | | 12.29 | | 1613 | | 1615 | | 12.03| 13.90 | | | 12.31 | | 1615 | | 1617 | | | | | | 12.58 | | 1617 | | 1618 | | | | | | 12.11 | | 1618 | | 1619 | | 12.10| | | | | | 1619 | | 1620 | 13.34| | | | | | | 1620 | | 1621 | | 12.5 | | | | | | 1621 | | 1622 | | 12.65| | | | | | 1622 | | 1623 | | | | | 11.64 | 11.74 | | 1623 | | 1624 | | | | | | 13.42 | | 1624 | | 1624 | | | | | | 12.58 | | 1624 | | 1626 | | 12.65| | | | | | 1626 | | 1630 | | | | | | | 10.31 | 1630 | | 1631 | | | | | | 13.42 | | 1631 | | 1633 | | 12.65| | | | | | 1633 | | 1634 | | | | | | 15.10 | | 1634 | | 1635 | | | | | | 14.80 | | 1635 | | 1636 | | | 15.36 | | | | | 1636 | | 1637 | | | | | | 15.10 | | 1637 | | 1638 | | 13.39| | | | | 14.38 | 1638 | | 1640 | | | 14.49 | | | | | 1640 | | 1643 | | | 13.5 | | | | 15.37 | 1643 | | 1645 | | 14.13| | | | | | 1645 | | 1648 | | | | | | | | 1648 | | 1651 | | | | | | | | 1651 | | 1652 | | 14.13| | | | | | 1652 | | 1653 | | 14.13| | | | | | 1653 | | 1656 | | | 14.71 | | | | | 1656 | | 1660 | | | | | | | | 1660 | | 1663 | | 14.43| | | | | | 1663 | | 1665 | | | |16.47 | | | 14.39 | 1665 | | 1667 | | | | | 12.88 | | | 1667 | | 1669 | 14.48| | | | 15.13 | | | 1669 | | 1679 | | | 14.91 | | | | | 1679 | | 1690 | | | | | 15.13 | | | 1690 | +------+------+------+-------+------+---------+------------+-------+------+
To treat of these countries in detail.
[Sidenote: THE NETHERLANDS IN SIXTEENTH CENTURY]
Netherlands.
During the period under consideration, the seventeenth century especially, the monetary history of the Netherlands supplies the key to that of the surrounding nations. The history of her monetary exchanges has yet to be written, and of her Mint ordinances very little is accessible, as compared, e.g., with France. But this is more than compensated by the numerous "plakkaats" or proclamations of the tariff of coins, which are to us practical indicators of the rates of exchange. The Netherlands, as has been already said, were the centre of European commerce in the sixteenth and seventeenth centuries, as the Italian States had been in the fourteenth and fifteenth; and every change in the precious metals or in the coins showed itself in the Antwerp Bourse as surely and swiftly as to-day in London. As prompt to take knowledge of these changes as Florence had been two centuries earlier, the authorities tabulated the various coinages which were current in the Low Countries,--and practically that meant the coinage of commercial Europe,--tariffed them against their own by proclamation, and instantly accommodated themselves to each new change or variation of value by a new proclamation and a new tariff. These proclamations, therefore, give us the measure and course of the monetary movements of the time in fullest and most welcome details.
It has been already shown that this action of the government of the Netherlands has a twofold aspect. From one side it expresses and regulates the natural flow and ebb of commerce, just as exchange rates and bullion remittances do to-day. And in this sense it was perfectly normal, healthy, and sound, more especially in so far as it provided for the gradual drawing away overplus metal to the East. But the Governments of Europe were yet under the spell of the delusion as to a balance of trade payable in gold--that delusion which was, later, dignified in history by the name of the mercantile theory. Nor had they yet lost the traces of that mediæval craft and lawlessness which rose from, and prompted to, the mere desire of robbing or pilfering their neighbour's store of precious metal as the first act of self-defence. Further than this the monetary system of Europe--unconsciously bimetallic and with an appalling variety of ratio prevalent at the same moment in different places--lay open, helpless and defenceless, and inviting to the bullionist, financier, or arbitragist. In so far as this element of national greed and dishonesty, or private and unprincipled gain, entered into the legislative enactments of the Netherlands, it condemns them as mercenary, and the monetary straits or tightness, not to say crisis and panic which ensued, as unnecessary and therefore in the highest degree lamentable.
[Sidenote: SIXTEENTH-CENTURY ARBITRAGE]
In a blind way the age saw what was going on behind the financier's screen, however little it understood the theory of it. In many a sixteenth-century document, preserved among the State papers in the Record Office at London, abuse is piled on the Netherlands for their practices in enticing away the coin of the realm. One of the correspondents of the Privy Council in the days of Elizabeth, 1575, writes thus from the Netherlands: "The Low Country merchants return great stores of money hither by exchanges, and by the proceeds, as the exchange may serve for their purposes, they send away her majesty's coin and bullion into the Low Countries in great quantities, and the rather by reason of the Hollanders trading with the East, by which means the realm will be secretly robbed, if it be not prevented." Twenty years later the whole subject was again gone into, for the fiftieth time, for the advice of the English Privy Council, and it was shown how "foreign exchangers contrived, by arranging a rise or fall in particular monies, to undervalue English monies, and draw them out of the kingdom. Prevention has been vainly attempted by Acts of Parliament, by sending over Sir Thomas Gresham to the Low Countries to complain, and by establishing the office of exchanger, which was discontinued as injurious to the State. A bank was proposed, but the Queen had not to spare the £100,000 needed to start it. It is now proposed to settle the exchange at 10 or 12 per cent., to be fixed yearly, according to the state of affairs, 20 per cent. or more being sometimes paid now."
The _naïveté_ and helplessness of the suggestions contained in these concluding words need not blind us to the real and pressing gravity of the monetary situation to which they relate, and which periodically beset each and every European Government throughout the centuries under consideration.
Such, therefore, is the aspect of these monetary ordinances or plakkaats of the Netherlands in the sixteenth and seventeenth centuries.
To speak of them in detail.
The first of the Low Country proclamations, containing an _evaluatie_, or tariff, is dated 2nd January 1516, and it marks the commencement of the influence of the American discoveries. (See table below.) By the succeeding proclamation of 4th February 1520, golden reals were substituted for the golden florin. Its provisions remained nominally in force for twenty years or so, but almost immediately the movement towards higher prices made itself felt, and it was in consequence of this, and after fruitless negotiations with the merchants of Antwerp, that Charles V. issued a series of four closely consecutive proclamations (1521, March 1522, 19th June 1524, 25th November 1525). The first three concern gold, the last only bears witness to the rise of silver by attempting to check it and call it down. Similarly, in his ordinance of 10th December 1526, he enacted that the price ruling on the 4th February 1520 should be again used, and should be reached at two drops or intervals, so as to create the less disturbance between debtor and creditor. The ordinance proved fruitless, and was twice renewed, in 1531 and 1539. In spite of them all, the rise in prices against which the authorities tried to fight, continued and had to be recognised. By the ordinance of 11th July 1548 a higher limit of values was permitted. Then, for a dozen years or so, attempts were made, by the proclamations of 23rd March 1552 and 24th October 1559, to make those prices of 1548 the basis, and to compel a return to it in the future, while recognising temporarily the higher prices ruling at the moment. And so the process repeats itself continually--a further rise of prices, complaints of the disorder in the currency and exchanges, and a new _evaluatie_ issued, regulating the exchanges at the higher rate for the moment, and providing for the reduction of prices to previous limits, from and after such and such a date.
[Sidenote: THE NETHERLAND PLAKKAATS]
In the accompanying table wherever two figures are coupled together thus,
2 4} 1 19}
the higher figure represents the price ruling at the date of the ordinance, the lower figure is the price to which return was to be made from and after some date fixed thereby. A simple glance at the tables will show how futile and foredoomed was every such attempt to rule and compel the exchanges. For the explanation of these tables it will be sufficient to give the dates of the Netherlands ordinances, premising that up to 1586 the series was applicable to the whole Netherlands, but that from that date there is a separate series for the Seven United Provinces, and for the Spanish Netherlands.
Netherlands Plakkaats.
27th July 1572.
7th February 1573.
22nd June 1574 (countenances the rise of prices over those of 1572 only until the end of the year).
3rd December 1575.
19th April 1576 (for Holland and Zealand, and to continue for only six months, when, by the ordinance of 25th October of the same year, a considerably lower limit was prescribed).
1579. In this year no less than four plakkaats were issued, with the object of enforcing a reduction of prices, but in vain, and the last of the four, issued on the 19th December, was obliged to recognise some portion of the rise of prices which it was attempted to counteract.
9th October 1581. In less than a year the effect of the strenuous attempt in 1579 had been completely swept away, and a further advance had to be recognised.
From 1586 the series of proclamations divides into two, as has been said, owing to the revolt and establishment of the United Netherlands.
The one set, relating to the Spanish Netherlands, includes proclamations of
30th April 1590, again recognising provisionally a further advance, and renewed on
15th December 1593,
21st October 1594,
16th November 1599,
23rd June 1602 (with some slight alterations),
30th December 1605, attempting to restrain a farther advance,
30th June 1607,
13th May 1609,
30th September 1610,
22nd March 1611, again recognising the inevitable advance.
The last named remained in force until 21st May 1618, with the exception of not being applicable in Volkenburg, Dalen, and Limburg, where the abnormal height to which monies had risen necessitated a special ordinance (4th March 1616), lowering the price to the limit of 22nd March 1611, by five separate three-monthly steps or intervals.
[Sidenote: THE PLAKKAATS OF THE UNITED PROVINCES]
The second and separate series of monetary ordinances issuing from their High Mightinesses, the States-General of the United Provinces, is remarkably parallel to the above. It begins with the ordinance of 2nd September 1594: "In view of the rising price of gold and silver," it says, a "lessening of that price to the limit of 1586 is ordered at three intervals, 15th September 1594, 10th November, 10th January 1595."
Like the contemporary enactment of the Spanish Netherlands, it proved ineffectual, and a further rise had to be recognised in the ordinance of 2nd March 1596, and again of 2nd April 1603. The preambles of these ordinances, which are preserved in the huge collections of Can and Scheltus, generally recite their purpose of providing against the disorders in the coinage, caused by the daily rise in price, by the greed and licence of the times, and by the inrush of the silver coins of other states. Such is specially the tenor of that of 21st March 1606, one of the most famous of these ordinances. Two years later an attempt was made to reduce prices to the limit of 1606. It proved ineffectual, and by the proclamations of 1st July 1610, 26th September 1615, and 13th February 1619, further advances were recorded. By the last-named, renewed on 5th June 1621, an attempt was made to re-establish the prices of 1610.
So much for the ordinances themselves. It is only necessary to add, for their general elucidation, that they generally contain and prescribe in detail the value of each separate coin circulating in the Low Countries at the particular time, coupled with an engraving of the coin, as an assistance to the people in recognising them. Indeed, some of the ordinances, that of 1606 for instance, contain engravings of upwards of 1000 different pieces--a significant witness to the international welter of coins in the Netherlands exchange. Dissected in detail, with regard to only a few of these coins, the tabular result is as follows:--
THE NETHERLAND PLAKKAATS +---------------------------------++----------------------------------+ | German Gold Guldens. || Spanish Ducats. | |(75 to a Mark of Gold, 18 Carats || (70 to a Mark of Gold, 23 Carats | | 4 Grs. Fine.) || 7-1/2 Grs. Fine.) | +-----------+---------------------++-----------+----------------------+ | | Declared Value || | Declared Value | | | in Netherlands || | in Netherlands | | Date. | Currency as by the || Date. | Currency as by the | | | Plakkaats. || | Plakkaats. | | +----------+----------++ +----------+-----------+ | | Florins. | Stivers. || | Florins. | Stivers. | +-----------+----------+----------++-----------+----------+-----------+ | 1499 | 1 | 8 || 1499 | 1 | 19 | | 1522 | 1 | 10 || 1522 | 2 | 3 | | 1526 | 1 | 12 || 1526 | 2 | 4 | | | 1 | 8 || | 1 | 19 | | 1539 | 1 | 9 || 1539 | 2 | 1 | | | 1 | 8 || | 1 | 19 | | 1548 | 1 | 10 || 1548 | 2 | 1 | | 1552 | 1 | 11 || 1552 | 2 | 2 | | 1559 | 1 | 12 || 1559 | 2 | 5 | | 1572 | 1 | 15 || 1572 | 2 | 7 | | 1573 | 1 | 19 || 1573 | 2 | 15 | | 1574 | 1 | 16 || 1574 | 2 | 13 | | 1575 | 2 | 0 || 1575 | 3 | 0 | | 1576 | 2 | 0 || 1576 | 3 | 3 | | | 1 | 17 || | 2 | 12 | | 1577 | 2 | 0 || 1577 | 3 | 3 | | 1579 | 2 | 3 || 1579 | 3 | 4 | | | 2 | 4 || | 3 | 0 | | | 2 | 2 || | 2 | 18 | | | 2 | 3 || | 3 | 0 | | 1581 | 2 | 8 || 1581 | 3 | 6 | | 1590 | 2 | 9 || 1590 | 3 | 10 | | 1605 | 2 | 10 || 1599 | 3 | 15 | | 1607 | 2 | 12 || 1609 | 3 | 19 | | 1609 | 2 | 15 || 1618 | 4 | 1 | | 1611 | 2 | 16-1/2 || | | 1618 | 2 | 17-1/2 || United Netherlands. | | || 1586 | 3 | 8 | | United Netherlands. || 1594 | 3 | 12 | | 1586 | 2 | 8 || | 3 | 10 | | 1594 | 2 | 12 || | 3 | 8 | | | 2 | 10 || 1596 | 3 | 9 | | | 2 | 8 || 1603 | 3 | 16 | | 1596 | 2 | 10 || | 3 | 15-1/2 | | 1603 | 2 | 14 || | 3 | 15 | | 1606 | 2 | 15 || 1606 | 3 | 16 | | 1608 | 2 | 17 || 1608 | 4 | 0 | | | 2 | 16 || | 3 | 18 | | | 2 | 15 || | 3 | 16 | | | | || 1610 | 4 | 0 | | 1610 & | 2 | 18 || 1615 | 4 | 1 | | onwards | | || 1619 | 4 | 2 | | | | || 1621 | 4 | 4 | +-----------+----------+----------++-----------+----------+-----------+
+---------------------------------++----------------------------------+ | Spanish Pistoles. || French Crowns. | |(36 to a Mark of Gold, 21 Carats || (Old, i.e. not "of the Sun," 72 | | 10 Grs. Fine.) || to a Mark of Gold, 22 Carats | | || 4-1/2 Grs. Fine) | +-----------+---------------------++-----------+----------------------+ | | Declared Value || | Declared Value | | | in Netherlands || | in Netherlands | | Date. | Currency as by the || Date. | Currency as by the | | | Plakkaats. || | Plakkaats. | | +----------+----------+| +----------+-----------+ | | Florins. | Stivers. || | Florins. | Stivers. | +-----------+----------+----------++-----------+----------+-----------+ | 1548 | 3 | 12 || 1499 | 1 | 15-1/2 | | 1552 | 3 | 18 || 1522 | 1 | 19 | | 1559 | 4 | 0 || 1526 | 1 | 19 | | 1572 | 4 | 4 || | 1 | 15-1/2 | | 1573 | 4 | 16 || 1539 | 1 | 17 | | 1574 | 4 | 10 || | 1 | 15 | | 1575 | 5 | 0 || 1548 | 1 | 17 | | 1576 | 5 | 4 || 1552 | 1 | 19 | | | 4 | 13 || 1559 | 2 | 0 | | 1577 | 5 | 4 || 1572 | 2 | 2 | | 1579 | 5 | 10 || 1573 | 2 | 9 | | | 5 | 10 || 1574 | 2 | 6 | | | 5 | 5 || 1575 | 2 | 12 | | | 5 | 8 || 1576 | 2 | 13 | | 1581 | 5 | 18 || 1577 | 2 | 12 | | 1590 | 6 | 4 || 1579 | 2 | 15 | | 1605 | 6 | 9 || | 2 | 15 | | 1607 | 6 | 12 || | 2 | 12-1/2 | | 1609 | 7 | 0 || | 2 | 14 | | 1611 | 7 | 2 || 1581 | 3 | 0 | | 1618 | 7 | 5 || 1590 | 3 | 3 | | || 1605 | 3 | 6 | | || 1607 | 3 | 8 | | || 1609 | 3 | 12 | | || 1611 | 3 | 12-1/2 | | United Netherlands. || 1618 | 3 | 14 | | 1586 | 6 | 0 || United Netherlands. | | 1594 | 6 | 6 || 1586 | 3 | 0 | | | 6 | 3 || 1594 | 3 | 3 | | | 6 | 0 || | 3 | 1 | | 1596 | 6 | 6 || | 3 | 0 | | 1603 | 6 | 15 || 1603 | 3 | 8 | | 1606 | 6 | 17 || 1606 | 3 | 10 | | 1608 | 7 | 1 || 1608 | 3 | 14 | | | 6 | 19 || | 3 | 12 | | | 6 | 17 || | 3 | 10 | | 1610 | 7 | 4 || 1610 | 3 | 14 | | 1615 | 7 | 6 || 1615 | 3 | 15 | | 1619 | 7 | 12 || 1619 | 3 | 16 | | | 7 | 6 || | 3 | 15 | | 1621 | 7 | 12 || 1621 | 3 | 18 | +-----------+----------+----------++-----------+----------+-----------+
+---------------------------------++--------------------------------+ | English Rose Nobles. || English Sovereigns. | | (32 to a Mark of Gold, 23 || (40 to a Mark of Gold.) | | Carats 8-1/2 Grs. Fine.) || | +-----------+---------------------++----------+---------------------+ | | Declared Value || | Declared Value | | | in Netherlands || | in Netherlands | | Date. |Currency as by the || Date. | Currency as by the | | | Plakkaats. || | Plakkaats. | | +----------+----------++ +----------+----------+ | | Florins. | Stivers. || | Florins. | Stivers. | +-----------+----------+----------++----------+----------+----------+ | 1499 | 4 | 5 || | | | | 1520 | 4 | 5-1/2 || 1548 | 3 | 0 | | 1522 | 4 | 10-1/2 || | | | | 1526 | 4 | 17-1/2 || 1552 | 3 | 0 | | | 4 | 5-1/2 || | | | | 1539 | 4 | 10 || 1554 | 3 | 0 | | | 4 | 5-1/2 || | | | | 1548 | 4 | 10 || 1575 | 4 | 4 | | 1552 | 4 | 16 || | | | | 1559 | 5 | 0 || 1576 | 4 | 6 | | 1572 | 5 | 3 || | | | | 1573 | 6 | 10 || 1579 | 4 | 8 | | 1574 | 6 | 6 || | | 1575 | 7 | 5 || | | 1576 | 7 | 10 || | | 1577 | 7 | 0 || | | 1579 | 8 | 0 || | | | 7 | 10 || | | | 6 | 8 || | | | 6 | 14 || United Netherlands. | | 1581 | 7 | 4 || | | 1590 | 7 | 9 || | | 1607 | 8 | 2 || 1586 | 5 | 1 | | 1609 | 8 | 10 || | | | | 1611 | 8 | 13 || 1594 | 5 | 5 | | 1618 | 8 | 16 || | | | | || | 5 | 3 | | United Netherlands. || | | | | 1586 | 7 | 12 || | 5 | 1 | | 1594 | 8 | 0 || | | | | | 7 | 16 || 1596 | 5 | 2 | | | 7 | 12 || | | | | 1596 | 7 | 13 || 1603 | 5 | 9 | | 1603 | 8 | 8 || | | | | | 8 | 7 || 1606 | 5 | 12 | | | 8 | 6 || | | | | 1606 | 8 | 9 || 1608 | 5 | 16 | | 1608 | 8 | 16 || | | | | | 8 | 12 || | 5 | 14 | | | 8 | 9 || | | | | 1610 | 8 | 16 || | 5 | 12 | | 1619 | 9 | 0 || | | | | | 8 | 16 || 1610 | 5 | 18 | | 1621 | 9 | 0 || | | | +-----------+----------+----------++----------+----------+----------+
+-------------------------------------++-----------------------------------+ | || Burgundian Gulden (or | | Philippus Rijder. || Gulden Andries). | |(67-1/2 and subsequently 70 to a Mark|| (72 to a Mark of Gold, 19 Carats | | of Gold, 23 Carats 8-1/2 Grs. Fine.)|| Fine, from 1456 to 1567; later, 75| | || to a Mark, 18 Carats 6 Grs. Fine.)| +----------+--------------------------++-----------+-----------------------+ | | Declared Value || | Declared Value | | | in Netherlands || | in Netherlands | | Date. | Currency as by the || Date. | Currency as by the | | | Plakkaats. || | Plakkaats. | | +-------------+------------++ +----------+------------+ | | Florins. | Stivers. || | Florins. | Stivers. | +----------+-------------+------------++-----------+----------+------------+ | 1499 | 1 | 19 || 1499 | 1 | 9 | | 1522 | 2 | 3 || 1522 | 1 | 12 | | 1526 | 2 | 4 || 1526 | 1 | 13 | | | 1 | 19 || | 1 | 9 | | 1539 | 2 | 1 || 1539 | 1 | 10 | | | 1 | 19 || | 1 | 9 | | 1548 | 2 | 1 || 1548 | 1 | 11 | | 1552 | 2 | 2 || 1552 | 1 | 12 | | 1559 | 2 | 5 || 1559 | 1 | 13 | | 1572 | 2 | 7 || 1572 | 1 | 15-1/2 | | 1573 | 2 | 15 || 1573 | 1 | 19 | | 1575 | 2 | 18 || 1574 | 1 | 16 | | 1576 | 3 | 3 || 1575 | 2 | 0 | | 1577 | 3 | 0 || 1576 | 2 | 0 | | 1579 | 3 | 3 || | 1 | 18-1/2 | | | 3 | 0 || 1577 | 2 | 2 | | | 2 | 18-1/2 || 1579 | 2 | 3 | | | 3 | 0 || | 1 | 5 | | 1581 | 3 | 6 || | 2 | 3-1/2 | | 1590 | 3 | 8-1/2 || | 2 | 4 | | 1610 | 3 | 18 || 1581 | 2 | 9 | | 1611 | 3 | 19 || 1590 | 2 | 11 | | || 1607 | 2 | 14 | | || 1609 | 2 | 17 | | || 1611 | 2 | 18 | | United Netherlands. || | | || United Netherlands. | | 1586 | 3 | 8 || 1586 | 2 | 9 | | 1594 | 3 | 10 || 1594 | 2 | 13 | | | 3 | 9 || | 2 | 11 | | | 3 | 8 || | 2 | 9 | | 1596 | 3 | 9 || 1596 | 2 | 11 | | 1603 | 3 | 14 || 1603 | 2 | 15 | | 1606 | 3 | 15 || 1606 | 2 | 16 | | 1608 | 3 | 17 || 1608 | 2 | 18 | | | 3 | 16 || | 2 | 17 | | | 3 | 15 || | 2 | 16 | | 1610 | 4 | 0 || 1610 | 2 | 19 | +----------+-------------+------------++-----------+----------+------------+
+--------------------------------++---------------------------------+ | German Thaler || Netherland Rijksdaalder | | (Silver). || (Silver). | +----------+---------------------++----------+----------------------+ | | Declared Value || | Declared Value | | | in Netherlands || | in Netherlands | | Date. | Currency as by the || Date. | Currency as by the | | | Plakkaats. || | Plakkaats. | | +----------+----------++ +----------+-----------+ | | Florins. | Stivers. || | Florins. | Stivers. | +----------+----------+----------++----------+----------+-----------+ | 1539 | 1 | 6 || 1583 | 2 | 2 | | | 1 | 7 || | | | | 1548 | 1 | 8 || 1586 | 2 | 5 | | 1552 | 1 | 9 || | | | | 1559 | 1 | 10 || 1594 | 2 | 6 | | 1571 | 1 | 11 || | | | | 1572 | 1 | 12 || | 2 | 5 | | 1573 | 1 | 16 || | | | | | 1 | 14 || 1603 | 2 | 7 | | 1577 | 1 | 18 || | | | | 1579 | 2 | 1 || 1608 | 2 | 8 | | 1581 | 2 | 5 || | | | | 1611 | 2 | 11 || | 2 | 7 | | || | | United Netherlands. || | | 1586 | 2 | 5 || United Netherlands. | | 1594 | 2 | 6 || | | | 2 | 5 || | | 1603 | 2 | 7 || 1610 | 2 | 8 | | 1608 | 2 | 8 || | | | | | 2 | 7 || 1619 | 2 | 10 | | 1610 | 2 | 8 || | | | | 1619 | 2 | 10 || 1621 | 2 | 12 | | 1621 | 2 | 12 || | | | +----------+----------+----------++----------+----------+-----------+
France.
In France the result of the American influx of metals did not make itself felt until the time of Francis I. During his reign the value of the mark of gold increased 33 livres 4 sols. 2 dens., and that of silver 1 livre 10 sols.
The main reduction took place at two periods, 1519 and 1540, and with a consequent change in the ratio slightly in favour of silver. The earliest find in America was gold, and at first this metal shows a tendency to depreciate. Concurrently silver, as the overvalued metal, commenced to disappear from circulation. It was to prevent this export that in 1519 the _écu au soleil_ was advanced to 40 sols., and again in 1532 to 45 sols.--an advance of 12-1/2 per cent. The silver _testoon_ was advanced at the same time from 10 sols. to 10 sols. 6 dens., an advance of 5 per cent. Even so equilibrium was not produced, and disorders in the currency continued, along with the prevalence of lower-rated coins. The town of Marseilles complained of it in a petition to the King (8th May 1539), and the important edict of Blois, 1540, which left the _écus au soleil_ untouched at 45 sols., while advancing the _testoon_ to 10 sols. 8 dens., was professedly and purposely issued "to more equalise the silver with the value of the gold, and consequently to make the value of our monies, both red and white, corresponding." Two years later the States-General when they met complained of the lack of currency, and demanded the opening of the Mint at Aix. The request was granted, but without visible result.
The same process of advance, unequally maintained, continued under Henry II. and Charles IX. (see accompanying tables).
TABLE OF THE MOVEMENT OF GOLD AND SILVER IN FRANCE, 1500-1660.
+----------+--------------------------+-----------------------------+ | |Price of the Mark of Gold.|Price of the Mark of Silver. | | Date. +---------+-------+--------+---------+---------+---------+ | | Livres. | Sols. | Dens. | Livres. | Sols. | Dens. | +----------+---------+-------+--------+---------+---------+---------+ | 1488 | 130 | 3 | 4 | 11 | 0 | 0 | | 1519 | 147 | 0 | 0 | 12 | 10 | 0 | | 1540 | 165 | 7 | 6 | 14 | 0 | 0 | | 1549 | 172 | 0 | 0 | 15 | 0 | 0 | | 1561 | 185 | 0 | 0 | 15 | 15 | 0 | | 1573 | 200 | 0 | 0 | 17 | 0 | 0 | | 1575 | 222 | 0 | 0 | 19 | 0 | 0 | | 1602 | 240 | 10 | 0 | 20 | 5 | 4 | | 1615 | 278 | 6 | 6 | ... | ... | ... | | 1636 | 320 | 0 | 0 | 23 | 10 | 0 | | 8th May | | | | | | | | 1636 | 384 | 0 | 0 | 25 | 0 | 0 | |22nd Sept.| | | | | | | | 1641 | ... | ... | ... | 26 | 10 | 0 | | 1662 | 423 | 10 | 11 | ... | ... | ... | +----------+---------+-------+--------+---------+---------+---------+
[Sidenote: FRANCE: THE MINT INQUIRY OF 1575]
In the case of the latter monarch it is expressly stated that the change, which was effected in 1573, when the ratio was established at 11.77, had been preceded by a period during which "the people" had of themselves augmented the value of the _écu d'or_ to 54 sols. At this limit the Government was obliged to fix it, but by the year 1577 it had risen successively to 58, 60, and 65 sols. The evil, as it was thought to be, of the advance of the monies was attributed to the caprice and unscrupulousness of "the people," and the King called several councils of experts to discuss the matter. Still the process continued unabated, and on the 19th December 1575, Henry III. assembled the States-General. The _cour des monnaies_--the officials of the Mint--at once approached him with a petition. Their representation is of peculiar significance:--
"In spite of the bad police prevailing, we draw in times of peace twice as much silver from abroad as the foreigners draw from us. If the reform we advocate were adopted we should double this net gain.... Between us and the Netherlands and Germany, where we generally trade, there is this difference, that 6 _écus_, at the price at which they are exposed here, only come to 5 in the said places, which has induced a sudden and enormous dearness in the merchandise which we export from there, and besides has caused us a great disorder--to wit, that the merchants have transported all our _douzains_ and other billon money, to save themselves from the loss they would have had to incur in settling in _écus_ or in any foreign species of gold or silver on which, at the price they are current at by the caprice of the people, there would be a loss in settlement of 15, 20, and 25 per cent.... The cause of the enhancement of prices proceeds from the malice of several who turn into bullion the best of your coins in order to fill the kingdom with others of less goodness, enriching themselves thus with the blood and misery of the people....
[Sidenote: FRANCE: THE REFORM OF 1577]
"The remedy is to lower the rate of the monies.... The _écus_ ought to come down to 50 sols., but for the present we would consent to it being put at 60, awaiting a further reduction. The currency of all foreign coins ought to be prohibited as the chief cause of these evils. For although by all your ordinances they have been valued according to the price of the _écu_, yet the people have always increased them more than they have your own monies, so that the _écu_ at this moment, to be in accordance, ought to pass for 78 sols. This arises from the craft of the foreigner, and the only exceptions of importance are the _reals_ and _pistoles_ of Spain, which are of known goodness and profit to the melter. They have never brought us harm, but, on the other hand, they are being melted down all over France, and at the present rate the foreigner gets a profit of about 7 livres on the mark of them, so that we advise prohibition of their circulation. Finally, we advise to do away with the old reckoning by livres and sols, and substitute for it the reckoning by écus."
The States-General, adopting in part the weakest suggestion of this remarkable paper, fixed the écus at 65 sols. The Mint officials at once represented that this only increased the evil. Henry accordingly assembled at Pontoise a conference of experts, and as the outcome of their deliberations decided on the adoption of the chief recommendation of the Mint officials' representation. By his proclamation of 13th November 1577, the reckoning by livres was abolished and that of gold _écus_ substituted, values of under 1 écu or 60 sols. to be settled in divisional coinage, and circulation of all foreign coins prohibited, with the exception of Spanish and Portuguese gold ducats. It was forbidden to constrain payment of any sum above 100 sols. in billon money, and in sums below that amount to present more than the third of the total sum in such billon money.
[Sidenote: FRANCE: FAILURE OF THE REFORM OF 1577]
This extraordinary and, on the whole, admirably planned reformation merits so much detail because of the intense importance of its bearing. It in effect anticipated the reformation which was only accomplished in England in our own century. So far as it was actually put in practice it made France monometallic. The instinct of the time had found its way to a comprehension of the evil before it, and of the remedy. The evil was due to a badly-regulated, weltering, bimetallic system; the remedy was a monometallic system. It matters little that such terms were not in use and that the theory of the matter was not enunciated. The essential point was that the _fact_, the _situation_, was grasped in practice for a moment, dimly it may be, yet sufficiently to illustrate the whole antecedent and succeeding event. As a matter of fact the ordinance remained practically in great part a dead letter. That it did so--that it did not accomplish its purpose--has been attributed to the _malheur_, the unhappiness, of the time. It was due to no such thing. It was due to the simple fact that in the ordinance two quite distinct, and one of them impossible, reforms were projected. The attempt to tie down the _écu_ to 60 sols. was foredoomed to failure, and as the eye of contemporaries was fixed more entirely on prices rather than on method of tender, the most significant part of the ordinance passed out of mind; already by the time of the death of Henry III., "the people," it is again said, had increased the _écu_ to 64 sols. On the 30th March 1594 a proclamation was issued to call it down to the value prescribed by the celebrated declaration of 1577, i.e. 60 sols. but, finding it impossible, the whole system created by that declaration was abolished (September 1602); the reckoning by _écus_ was done away with, and the old system of reckoning by livres returned to; the gold _écu_ was tariffed at 65 sols., and the circulation of foreign monies was again permitted. Henry IV., in his proclamation abolishing the almost invulnerable system established by Henry III., attributes to the attempts at working that system "the present dearness of everything." It is almost impossible fully to represent the unwisdom of this counter-reformation. To the eye of the then legislator there was only one evil--the rising of prices. If levelly effected it was, as a matter of fact, no evil at all--far the reverse indeed, and he did not need to concern himself about it at all. Besides, it was irresistible. The evil that escaped his eye, or to which he was blind, was that unceasing process of flux which was caused by the different ratios prevailing in different parts of Europe. The scheme of Henry III. would have proved effective, where no other measure or scheme of the time was or could be, and its abrogation in 1602 by Henry IV. removed a bulwark and a barrier, and made way for catastrophe.
Le Blanc considers that this repeal of the system established in 1577, itself failed of its purpose, _because the increase of prices still continued_. "In the seven years of peace which followed the ordinance of 1602, the depreciation of the gold _écu_ was as much as it had been in the preceding sixty-five years of war and trouble." The simple truth was, that it was much more likely to increase in time of peace and trade activity than in time of war. The point to notice was not at all how much the _écu_ did depreciate, but the relativity of such its depreciation with that of the standard currency of other countries, and the monetary disorder which the inequality of ratio and of rate of depreciation induced.
Alarmed beyond measure at the evident failure of his plans, Henry IV. summoned monetary conferences of his wisest and best, and they were not even suspended by his assassination. The complaint again was, that the permission to circulate foreign monies had led to the transport of all the good coinage, to the ruin of commerce and great general disorder. Assemblies were held all over France in the trading towns, and the result of the advice of their delegates was the proclamation of 5th December 1614 (issued early in 1615). By this proclamation silver monies were left untouched, the tariff of the gold _écu_ was increased from 65 to 75 sols., and the value of the mark of gold proportionally increased. The ratio was thereby altered from 12.01 to 13.90. It is hardly too much to say that this step and alteration in the ratio saved France from the catastrophe which befell England and Germany in 1622 and 1623. The arrangement established in 1615 endured unaltered until 1636, when a slight reduction in the ratio was made to 13.61 (on the 8th May). Two months later it was found that so serious an export of good coinage was ensuing that "our kingdom would be entirely stripped of good currency, to our great damage, etc." A proclamation was accordingly issued (28th June 1636) attempting to regulate the course of exchange. The effort was vain, and on the following 22nd September the ratio was suddenly and violently altered to 15.36.[10]
[Sidenote: FRANCE: THE REFORM OF 1640]
A glance at the ratio prevalent in other countries will show how masterful was this act of France, but it carried with it the seeds of its own punishment. Such is the nature of the bimetallic law that any overshooting of the ratio, on no matter which side,--in favour of silver or in favour of gold,--establishes a differentiation, and the differentiation at once gives to the one metal a fulcrum or lever point--a purchasing power--against the other, and the undervalued metal, whichever it is, at once tends to disappear. Four years after this autocratic measure of France, it was found that her currency was in so depreciated a state, through exchange, that the only pieces current were lacking one-third of their full weight.
The recoinage established by her proclamation of 31st March 1640, which established the new _louis d'or_, was intended as a complete and permanent remedy, and it may reasonably claim the praise of having effected so much. The alteration of the ratio established in 1640-41 by this recoinage (from 15.36 to 14.49) was only made after most serious deliberation. Monetary conferences of experts were held at Paris; and it was found, after careful assays of all the monies of the surrounding nations, that the prevailing ratios (1640-1) were at one and the same time--
Germany 12 : 1 Milan 12 : 1 Flanders and Netherlands 12.5 : 1 England 13.33
It was therefore decided to adopt a higher ratio than all these, viz. 13.5.[11]
The history of the few years succeeding this measure is most instructive. The depreciation of monies continued, and on the 4th April 1652 a proclamation was issued, forbidding the currency of certain old monies of France, and again attempting to restrain the course of the exchanges; and three years later, 1655, under pretext that false moneyers were imitating the _louis d'or_ and the silver _écus_, the minting of _lis d'argent_ (lilies of gold and silver) was resolved upon. "But," says Le Blanc, "everybody knows that the true motive was the same as when a little later they resolved on the minting of 4-sol. pieces. Under the above pretext, the ratio basis of 1641 was broken. Remonstrances were vain until experience proved their weight, and the minting of the _lis d'or_ had to be discontinued. The pieces already minted received a value of 7 livres, and to correspond the _louis d'or_ was increased to 11 livres, by proclamation 15th March 1656." As silver was left untouched, the resulting alteration of the ratio was from 13-1/2 to 14-5/7.
Florence.
With the advance of Antwerp as the centre of European exchanges in the fifteenth century, the mercantile pre-eminence of Florence and Venice decayed, and their monetary history loses its former prime importance. But they by no means thereby lose their interest for us. Instead of profiting as of yore by every veer in the winds of exchanges, they are at the mercy of them, as was every other country outside the charmed circle of the Netherlands. The influence of the changed conditions in the production of the precious metals, due to the discovery of America, does not show itself in Florence before 1531, when (4th August) the price was by law advanced. Three years later, 5th March 1534, it was found that the state was receiving damage from the foreign monies circulating, and that the only native coin circulating was in a worn and depreciated state. A recoinage was accordingly ordered, circulation of all foreign monies of silver was forbidden, and all payments and contracts were commanded to be made in gold _scudi_ of the state. In order to inform the commercial element, the Mint masters were further ordered to make trial every fifteen days of the value of any foreign _scudi_, and to publish the result.
There is a wonderful simplicity about this enactment. In order to defend themselves from a flood of cheap and cheapening silver, the Florentine authorities adopted a virtual gold monometallism. That the enactment was not permanently regarded and kept can only be attributed to the strength of commercial custom, and to a true perception in the mercantile community at large of the essential difficulty of the problem and its remedy. The Florentines were simply obliged to circulate all coins, gold as well as silver, because such was the universal custom of mediæval Europe. By 1552 silver foreign monies were again current in Florence, in such quantities and with such effects on the native gold currency, that they had to be again prohibited and banished (by law of 18th May 1552); renewed three years later (28th February 1555), and again in 1557 (29th April). Indeed, within the period here treated of, up to, i.e., 1660, there is a series of thirteen or fourteen separate re-enactments of the prohibition relating to these monies and the depreciated Florentine billon money ("_quattrini neri_"). If, during this period, Florence had occupied the commanding position that Antwerp did, quite unique interest would attach to the record of this monetary policy or experiment. But not being in that position, and being, too, quite apparently unable to enforce her own enactments in her own territory, even this merely depressive policy was partially broken down. In so far as it was broken down she lay at the mercy of the monetary changes around her, and of the Netherland financiers, as did every other country of Europe. By the law of 5th April 1630, all species of foreign ducatoons were prohibited, "in consideration that, within the short time they have been introduced, so great a quantity, and of such differing standards, has been imported from the various foreign Mints." Five years later the gold coin was in so depreciated a state as to call for legislative interference (9th February 1635, renewed on 5th February 1645); and again in 1661 (3rd February) it was found necessary to prohibit the circulation of the silver _reals_ of Peru and every other kind of Spanish silver, except at bullion value. These are only a few from a long list of similar enactments, but they serve adequately to show the trend of events on small as well as large fields of operations. What an amount of commercial disturbance and disaster lies behind the dry details of these legal enactments, the case of England will serve to show.
Germany.
The monetary history of Germany is one of extreme confusion and intricacy. The lack of coercive power in the central authority--in the Emperor himself--was as conspicuously displayed in the monetary ordinances of the empire as in the political sphere. The imperial edicts were disregarded, and each separate circle of the empire, or each separate prince or union of princes, left to shift or act for themselves. Amid all the confusion of such a disorganised and reeling system sufficient is perceptible to indicate the broad tendency of events, and to show how closely analogous was her experience to that of Europe generally within the same period.
In Germany, as in the Netherlands, France, and England, the influence of the discovery of America only begins to express itself about 1520, and in the usual way--influx, movements and disorders in the currency and ratio, and general complaints. In 1520 a monetary convention was summoned to meet at Forchheim. This was followed by the debate in the Reichstag at Nürnberg (1522), where great complaints were made of the unusable, false, and depreciated coinage, "due to the stealing away and exchanging abroad of the gold _gulden_ and silver coins." It was in consequence of the representations of this Reichstag that the first of the series of three imperial Mint ordinances was issued by Charles V. (at Esslingen, 1524). The main details of this ordinance will be found in the accompanying tables and in Appendix V.
The effect of the first imperial ordinance was to change the ratio from something between 10 and 11 to 11.38. The _gulden_ was raised from 17s. 4 pf. to 17s. 6 pf. All foreign gold was to be taken at equivalent rates, and whoever gave more for foreign coins of gold was to suffer a heavy penalty. Further, the export of gold and silver was forbidden, on pain of life and goods.
The ordinance remained a dead letter, and the monetary disorder of the country only increased.
THE MOVEMENT OF SILVER IN GERMANY, 1459-1621, ILLUSTRATED BY THE MOVEMENT OF THE SILVER GROSCHEN, ACCORDING TO IMPERIAL AND OTHER MINT REGULATIONS. (_See preceding Table on p. 30._)
+------+---------+------------+---------------------+-----------------------+ |Date. | Cologne | | Equivalent Value | | | | Mark | Alloy. | in Convention | Treaty | | | coined | | Money. | or | | | into +------------+-----------+---------+ Ordinance. | | | Pieces. |Loths. |Grs.| Krtzrs. | Pfnge. | | +------+---------+-------+----+-----------+---------+-----------------------+ | 1501 | 126 | 6 | 1 | 3 | 2-37/42 |Treaty of Dukes Henry | | | | | | | | and Erick of Brunswick| | | | | | | | and Bishop Barthold | | | | | | | | of Hildesheim, with | | | | | | | | the States of | | | | | | | | Brunswick, Hildesheim,| | | | | | | | Hanover, Lübeck, | | | | | | | | and Göttingen. | | 1510 | 160 | 6 | 0 | 2 | 3-1/4 |Göttingen. | | 1524 | 136 | 12 | 0 | 6 | 2-8/17 |First imperial Mint | | | | | | 3 | 1-4/17 | edict of Charles V. | | | | | |(1/2 Groat)| | at Esslingen. | | 1533 | 123 | 7 | 0 | 4 | 1-3/4 |Augsburg Mint edict. | | 1535 |91-47/131| 8 | 0 | 6 |2-101/874|Mint treaty between | | | | | | | | Ferdinand and the | | | | | | | | Counts Palatine of | | | | | | | | the Rhine and the | | | | | | | | States of Augsburg | | | | | | | | and Ulm. | | 1551 | 94-1/2 | 7 | 5 | 5 |3-59/567 |Second imperial Mint | | | 100 | 7 | 6 | 5 | 2 | edict of Charles V. | | | | | | | | at Augsburg. (Remained| | | | | | | | inoperative like that | | | | | | | | of 1524, _supra_.) | | 1558 | 88 | 6 | 9 | 5 | 2-7/44 |Saxony Mint ordinances.| | 1559 | 108-1/2 | 8 | 0 | 5 |2-26/217 |Mint ordinance of | | | | | | | | Ferdinand I. | | 1572 | " | " | 0 | " | " |Edict of the Lower | | | | | | | | Saxony Circle. | | 1610 | 234 | 14 | 4 | 4 |2-82/351 |Edict of the Lower | | | | | | | | Saxony Circle. | | 1617 | 144 | 8 | 0 | 4 | 0-2/3 |Edict of the Lower | | | | | | | | Saxony Circle. | | 1622 | 108-1/2 | 8 | 0 | 5 |2-26/217 |Edict of the Upper | | | | | | | | and Lower Saxony | | | | | | | | Circle. | +------+---------+-------+----+-----------+---------+-----------------------+
THE MOVEMENT OF GOLD IN GERMANY, 1495-1621, ILLUSTRATED BY THE MOVEMENT OF THE GOLD GULDEN (RHENISCHE GULDEN), ACCORDING TO IMPERIAL AND OTHER MINT REGULATIONS. (_See preceding Table on p. 31._)
+-----+-------+---------------+-------------------------+---------------+ | |Cologne| | Equivalent Value | | | | Mark | Alloy. | in Convention Money. | Treaty | |Date.|coined +-----+---------+------+------+-----------+ or Ordinance. | | | into | 24 | 12 | | | | | | |Pieces.|Crts.|Grains. |Flrns.|Krtzs.| Pfnge. | | +-----+-------+-----+---------+------+------+-----------+---------------+ |1506 |71-1/3 | 18 |6 gold | 3 | 6 |0-132/7597 |Treaty between | | | | 3 |6 silver | | | | Bamberg, | | | | | | | | | Würzburg, and | | | | | | | | | Brandenburg. | |1509 |71-1/3 | 18 |6 gold | 3 | 6 |1-3185/7597|Frankfort Mint | | | | 4 |0 silver | | | | ordinance. | |1524 | 89 | 22 | ... | 2 | 54 |3-5019/6369|Imperial Mint | | | | | | | | | edict of | | | | | | | | | Charles V. at | | | | | | | | | Esslingen. | |1551 |71-1/3 | 18 |6 gold | 3 | 6 |0-3682/7597|Imperial Mint | | | | 3 |8 silver | | | | edict of | | | | | | | | | of Charles V. | | | | | | | | | at Augsburg. | |1559 | 72 | 18 |6 gold | 3 | 4 |1-2267/3834|Imperial Mint | | | | 3 |8 silver | | | | ordinance of | | | | | | | | | Ferdinand I. | +-----+-------+-----+---------+------+------+-----------+---------------+
[Sidenote: GERMANY: THE THREE IMPERIAL EDICTS]
In 1530 the Reichstag of Augsburg demanded the holding of a council, in order to enforce the late edict, and for a due consideration of the monetary situation. Several attempts were made with this object, but fruitlessly, and the princes of the empire fell back on the only feasible but fatal plan of smaller Mint conventions between contiguous states. There is an endless series of these, and they render the history of German currency a perfect jungle of intricacies. Nine years later (1539), a monetary convention was summoned to meet at Augsburg by Ferdinand, heir to the empire. It proved fruitless. Again, in 1548, after the expiry of a similar period, the Reichstag at Augsburg declared for another monetary convention to relieve the disorder. The opinions of certain deputies to this convention, which met on the 8th October 1550, were as follows: "For fifty or even eighty years and more the ratio between gold and silver has been between 12 and 13. But in a gulden of those days there was an equivalence of more silver than in seventy-six of our kreutzers. Since then we apprise the Rhenish gold gulden and kreutzers less than foreign nations. Therefore France and England seek them."[12]
A thorough inquest into the subject, or evaluation, was therefore ordered, and it was in accordance with the advice of the convention and with the report of the evaluation that the second imperial Mint edict was issued at Augsburg, 1551. This edict was drawn up on a ratio of 10.83 as a basis, and, as might be reasonably expected from the different ratios ruling abroad at the time, it proved as inoperative as its predecessor. The succeeding ten years witnessed a rise in the relative value of gold, or depreciation in that of silver, and the third and last of these imperial Mint edicts, that of the Emperor Ferdinand, issued at Augsburg, 19th August 1559, fixed a higher ratio, viz. 11.44. The Rhenish _gulden_ was raised from 72 to 75 kreutzers. The increasing production of silver indicated by this change is still more clearly marked in the resumption of the coining of the imperial thalers, at the instigation of the Reichstag at Augsburg, 30th May 1566. The advice of this Reichstag was the outcome of the monetary convention held at Nördlingen two years earlier, at which strong complaints were appointed to be made before the Reichstag of the weak state of the coin, and of its under-valuation.
In matter of fact, the Mint edict of 1559 remained a dead letter; nominally, however, it continued in force up to 1600, although no less than seven attempts were made at succeeding diets, from 1566 to 1596, to enforce it and bring it up to date. In the Reichstag of Speyer, 1570, complaints were made of the universal loss arising from the non-observance of the edict. In place of an imperial coinage, nothing circulated but foreign and counterfeit coins, and the necessaries of life had risen to a prohibitive height. Similar were the complaints at the succeeding diets at Frankfort, 1571, and at Regensburg, 12th October 1576, at which last Ferdinand's edict was again re-enacted, with a command that the Burgundian circle and the Swiss should conform themselves to it. Bitter complaints were made of the bad state of the gold and silver coinage, and of the enrichment of the exchangers on the Rhine. The circulation of Dutch and Swiss thalers was forbidden because of the loss by exchange, and the export of all gold and silver again forbidden. As an instance of the depreciation prevalent in the coinage, it was noted that the silver _albus_ had lost one-third of its weight, so that thirty-six were needed to purchase one gold gulden, whereas formerly twenty-six were equivalent.
[Sidenote: GERMANY: DISORDERS OF 1580]
Four years later, 1580, Ferdinand, as Archduke of Austria, issued a fresh tariff, with the object of checking exports, and in 1582 the states, having consulted as to the condition of the coinage, strongly advised a renewal of the prohibition of the export of coin, especially by the Italians. This advice was adopted in the Reichstag of Augsburg, which met seventeen days later, 20th September 1582. The preamble of the Act then and there passed speaks of the export of a good portion of the native currency, and of the unmeasured rise of prices, coupled with the circulation of forbidden foreign specie, large and small.
This resolution of the Reichstag was followed by the enacting of the Mint edict of 10th December 1582. It proved as futile as any of the others; and two years later, July 1584, the deputies of the three circles of Franconia, Swabia, and Bavaria complained that within the four years immediately preceding several millions had left the country by way of the Rhine provinces for the Netherlands, very little going to Italy by comparison.
On this representation another useless edict was issued by the Emperor Rudolph II., and in the following year the merchants at Frankfort Fair found themselves obliged to agree upon a tariff of _ducats_ and _Reichs-thalers_. The _Philipps-thaler_ was put at eighty-two kreutzers, and the _Reichs-thaler_, which, by the Imperial Mint edict still nominally in force, should have been at sixty-eight kreutzers, was put at seventy-four. This arrangement of the merchants established a ratio between gold and silver of 11.4.
Certain of these same merchants, examined as to their opinion of the method of the export in January 1586, explained that it went by way of Nürnberg, and that the arbitrage was attended with 9 or 10 per cent. profit.
[Sidenote: GERMANY: THE KIPPER UND WIPPER ZEIT]
Nominally, however--or in theory--the arrangement of 1559 continued the unenforced law of the land up to 1600, underneath all these attempts at revision and underneath the different regulations of the various monetary unions of contiguous circles or states. With the latter date commences that extraordinary movement of monetary depreciation and panic which is known as the "_Kipper und Wipper_" period. In great part the extraordinary acuteness of the panic which ensued was due to internal monetary confusion of Germany, but that internal confusion simply ministered to the export of all good specie and metal, and in the end it became simply a money corner. The movement began by a coining of the lower denominations of monies on a different and depreciated footing or basis. The _specie_ thaler began to part company from the current thaler, and to rise to more than the 24 silver groschen or 36 Marien groschen, to which by the Mint edict of 1559 it was declared equivalent. By 1618 it had risen to 1 thaler 6 silver groschen (= 48 Marien groschen), by 1620 to 2 current thaler, by 1621 to between 7 and 8 current thaler, while the ducat had risen to 13 florins 30 kreutzers.
Tabularly the statement of the movement of the _Reichs-thaler_ is this:--
+--------------+--------+---------++--------------+--------+---------+ | 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: Nürnberg.] [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, Lübeck, 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 Lübeck) to 62 kreutzer (=32 schillingen Lübeck), and the exchange with Amsterdam from 46 stivers (=32 schillingen Lübeck) 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 |£1 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 || | | +-------------------+--------++------------------+--------+
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, £27; by alloy of 1/11 it is worth £29, 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 £26, 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 £10,000 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 _primâ 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 £3000 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 £200 a year keep that house that we might have done with 200 marks but sixteen years ago."
The course of the enhancement of foreign prices is thus argued between the merchant and the doctor.
_Merchant._--"We that be merchants pay dearer for everything that cometh over the sea, even by the third part well. And because they of beyond the sea will not receive our money for their wares, as they were glad in past times to do, we are fain to buy English wares for them, and that doth cost us dearer by the third part, yea almost the one-half, dearer than they did before time, for we pay 8s. for a yard of cloth that within these ten years we might have bought for 4s. 8d. When we have thus dear bought outlandish ware, then we have not so good vent of them again as we have had before time, by reason there be not so many buyers, for lack of power, though indeed in such things as we sell we consider the price we bought them at."
_Doctor._--"I doubt not if any men have licked themselves whole [i.e. recovered the loss] you be the same, for what odds soever there happen to be in exchange of things, you that be merchants can espy it anon. _Ye lurched some of the coin as soon as ever ye perceived the price of that to be enhanced. Ye, by and by perceiving what was to be won thereon 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 £3, 11s. 6d. only equalises the Value of English Money with those of Foreign Countries, and that to prevent the Export of Gold its Price must be raised in Proportion." And so on.
As the result of such representations, and after ten months of wavering Salisbury gave way, and on the 22nd November 1611 he consented to the issuing of a proclamation raising the denominational value of all gold coins 10 per cent. This proclamation was issued on the following day, and the ratio was thereby at a blow raised from 12.15 to 13.32.
Among the many alternative schemes proposed before the adoption of this measure, had been one for "raising £500,000 on loan to the King, by coining brass money to that amount, and compelling their acceptance in certain proportions by the people, on promise to repay within seven years in full value silver." It was fondly asserted that this would be a "means of preventing the export of coin and bullion, caused by the rise and value of foreign coin."
Another project brought forward was "for meeting the increase of value laid upon the coins of the Low Countries by issuing a copper coinage, corresponding thereto, and by raising the value of English silver and gold coins in order to prevent losses of merchants in foreign trade, etc."
[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 £6000 in bullion or specie. The Mint officials proposed a raising of the denomination, and again the matter was hotly debated in and out of the Council. But a different race of men from Raleigh had succeeded, and, on the 31st December 1618, the Privy Council determined that "silver shall not be raised in value at present, and uniformity in the weight of the coin is to be observed; the melting of gold for braid or plate forbidden, but further regulations postponed till the committee for exchanges bring their report."
[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 £140,000, and it was stated that since the beginning of the reign a matter of £7,000,000 of gold had been surreptitiously exported. On the 31st July 1619 proclamation was issued for a new coinage. The 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 £1070, whereas in the four succeeding years the silver coinage at the Tower Mint amounted to £205,500.
[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 £6 to £10, and sometimes more, to have £100 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: RÉSUMÉ]
In broadest and hastiest résumé, 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 propriété, 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.]