Introduction

Introduction

THE second Session of the fourth Parliament of Anne opened on the 15th November 1709. In her speech to the House the Queen characterised the peace moves of the French as insincere and asked for supplies necessary to the vigorous prosecution of the war "that we may put the last hand to this great work of reducing that exorbitant and aggressive power which has so long threatened the liberties of Europe" (Commons Journals XVI, p. 210). At the same time she assured the House of Commons that the Supply she asked for "shall be carefully applied to the uses of the war if it continues or to the lessening of the debts which it has occasioned, in case of a peace."

The House of Commons responded to the speech by the promise of speedy and effectual Supplies for the prosecution of the war "in such a manner as shall oblige the common enemy no longer to depend on artifices to obtain a peace but to accept such terms as shall be a lasting security to her Majesty and her Allies."

At the same time the House congratulated her Majesty on the successes of the last campaign and expressed their sense of the honour and advantage of the services of the Duke of Marlborough (ibid., p. 213, 16 Nov.).

On the following day (ibid., p. 214, 17 Nov., 18 Nov.) the House went into Grand Committee of Supply (Nov. 17) and called for Estimates of the Naval Ordinary, the Land Forces and the Ordnance (Land Service) and at the same time called for accounts of the expenses of the Navy Ordinary for the past year, of the Navy Debt, of Subsidies to the Allies and of the Ordnance Office debt.

The account of the Navy Debt was introduced on November 21st and on the same day Supply was voted for 40,000 men, including 8,000 Marines, and for 120,000l. for the Navy Ordinary (Commons Journals XVI, pp. 219–220).

On the 19th November (Commons Journals XVI, pp. 215–17) the first four of these Estimates, relating to the Army, were submitted to the House by Robert Walpole, Secretary at War. They were as follows:

The fourth Estimate was for the Queen's various Subsidies to the Allies (Commons Journals XVI, p. 217).

With the exception of the last two items all these Subsidy obligations have been already explained by the abstracts from the relative Treaties as printed in the Introduction to Vol. XX of this Calendar, pp. xlii–xliii.

The last two items arose out of fresh Treaties negotiated by Marlborough early in 1707 and the items had already figured in the Estimates for the year 1709. The text of these Treaties is printed in Commons Journals XV, pp. 232–5. In abstract they are as follows:

The Treaty of Repartition of the Prussian Troops dated at the Hague 24 November 1706 made by the Duke of Marlborough on behalf of the Queen and also on behalf of the States General for the quartering of the 21 Squadrons and 9 Battalions of the Troops of the King of Prussia during this winter between the Maas and the Rhine according to the repartition of quarters made by the Duke of Marlborough.

(1) Hereby the Queen, with the concurrence of the States General, consents to pay to the King of Prussia the Agio (or difference between Bank money and the current coins of Germany) according as the same was regulated during the campaign,

and that for 11 Squadrons and 2 Battalions quartered according to the said Repartition in countries and places where Bank money is current, and also for the General Officers,

which said Agio amounts to 9,845 florins 10 sols Dutch money per month.

One moiety for the bread of the said body shall be paid to the King of Prussia, which moiety after the rate of 10,207 rations [a day] at two livres a ration comes to 12,758 florins 3 sols per month.

As to the forage after the rate of 5,594 rations at 3 Crowns a ration, there shall be paid 41,955 florins Dutch money per month; which money for forage shall be directly paid by Anne, and the States [General] to the Bailiwicks and Districts where the Troops shall be quartered upon the account of forage; which said Bailiwicks and Districts are to deliver to the Troops of Prussia: the remainder to be paid by his Majesty the King of Prussia.

But as for the country of Cleves and the District in the upper part of Guelderland in the possession of the King of Prussia payment shall be made to Commissaries named by his Majesty.

The said Bailiwicks and Districts are, upon that foot, to discount [sic ? for account or deduct] every month with the Officers of the Troops and to pay them in ready money the three Crowns per ration received by them in consideration of what horses shall be short and for which forage has not been delivered.

But when the Troops shall repass the Meuse, as well during the winter quarters as after, and at the opening of the campaign, they shall be on the foot of the 7th Article of the Treaty of 1701 as well in respect of the agio as of bread and forage.

(2) Payment of the said money shall be exactly made every month on the part of the Queen and of the States General.

(3) In the winter quarters as above the above Prussian Troops shall be under command of the Duke of Marlborough. If they pass the Meuse for winter operations they shall receive the same treatment with regard to agio, bread and forage as they had last campaign, but the forage shall then be delivered in entire rations out of the magazines of the States.

This Convention is signed on behalf of the Queen by the Duke of Marlborough and on behalf of the King of Prussia by W. baron de Schmettau, "the States General having consented by their Resolution of the 17th of this present month of November to the same conditions for the moiety which regard the said payment of the States of the United Provinces." Followed by: the said Repartition of the winter quarters.

The Convention between Queen Anne and the States General of the one part and the Landgrave of Hesse Cassel of the other part concluded at Cassel 20 May 1706 concerning the march of the said Landgrave's Troops to Italy and the augmenting them by two Regiments of Horse, which makes 720 Horse.

(1) The Landgrave agrees that his Troops shall march to Italy.

(2) His Troops to consist of 9 Battalions [of Foot] and 16 Squadrons [of Horse and Dragoons] viz. 9,000 men stipulated by the Convention of 7 Feb. 1702; [plus] one Battalion of 870 as by the Convention of 31 March 1703 and four Squadrons, making 720 Horse, which shall be forthwith added thereto by the Landgrave [under the present Convention].

(3) For the Augmentation of [or by] the said "two Regiments" of Horse which the Landgrave shall make the Queen and the States General shall pay him a subsidy of 50,000 Crowns.

(4) They will make good to him the overplus of the price of bread and forage if it shall exceed what the Troops would have paid in Flanders: as also the extraordinary charges or Contingencies; whereof proofs and vouchers shall be produced.

(5) The loss that may happen by change of money shall likewise fall on the Queen and the States General: which shall be proved by bills of bankers attested.

(6) The Queen and the States General engage to supply 60 waggons for bread.

(7) The Queen and the States General shall take upon them the charge of the Hospitals, and one waggon for sick for each Regiment or alternatively shall pay 4 sous a day for each sick or wounded person: but they shall bear the charges of 16 waggons.

(8) Because the indemnifying the Landgrave as stipulated in Articles 6 and 7 as above comes to an uncertain sum the Landgrave is willing to charge himself therewith for a Subsidy of 70,000 Crowns per an. of Holland money. But he will quit all pretensions to this subsidy if the Queen and the States General will take upon themselves the care of the said two Articles and to that purpose send Commissaries and Officers along with his Troops.

(9) By the Convention of 7 Feb. 1702 the Landgrave had the right to bring back the 3,000 men, paid by subsidy, to winter in his own estates. As he will not be able to bring them back from Italy, for winter quarters, the Queen and the States General oblige themselves to indemnify him for the loss that there will be in the exchange of the money of Germany into that of Italy during the six months of winter quarters.

(10) Waggon money, recruit money and all other advantages as in the Convention as hitherto shall continue on the foot and practice of former Conventions.

(11) On signature hereof the Landgrave shall be paid 80,802 florins 11 sous by the Queen and the like sum by the States General as for the [unpaid] remainder of the 1705 Subsidy and for the 1706 Subsidy payable in advance.

(12) The Landgrave insists positively on payment of the arrears of the last war on the part of England, viz. half at present, the other half at the end of the year. The Duke of Marlborough will make most pressing instances to the Queen hereon.

(13) "Whereas there has been no exact account given of what is due to the Officers for Recruits, Remounting, Waggon money, or other advantages, a list thereof shall be made forthwith and the Queen and the States General shall pay them as soon as possible in order to enable the Officers to support their extraordinary and necessary charges in this march [into Italy]."

(14) The States General shall hasten payment of the arrears due to Spiegel's and Rechteren's Regiment.

(15) The payment of the Subsidy for the present Augmentation shall commence from the signing of this Convention.

(16) The Queen shall engage for two thirds and the States General for one third "of all the charges which shall arise from the present Convention."

(17) The Convention shall last one year.

The Hesse subsidy item on p. ix supra is explained by Clauses 3 and 16 of this Treaty. The remaining articles of the Treaty only affect the item of 'Extraordinaries of the War', but none of them appear in the present year's account of such 'Extraordinaries'.

Upon the presentation of the above Estimates and Accounts the House voted Supply on the 21st November for the Navy and on the 23rd November for the Army and Treaty Subsidies. The only item in which the House made any change was in the figure for the 40,000 men in Flanders. The Vote reduced this item from 919,092l. 3s. 6d. to 901,992l. 3s. 6d.

On the 21st November the Estimate for the Office of Ordnance for the year 1710 was presented to the House by Lieut. Gen. Erle as follows (Commons Journals XVI, p. 220):

This Estimate is to be understood as referring-only to the Ordnance Land Service. The corresponding Ordnance Sea Service was always comprehended in the Navy Estimate.

The Ordnance Office Debt as submitted on the same day amounted to 250,497l. 7s. 6¼d., towards which the Treasurer of the Ordnance had in hand in cash and tallies 144,277l. 2s. 10d. (Commons Journals XVI, p. 220).

The Estimate of the charge of her Majesty's Forces to serve in Spain and Portugal "or elsewhere as the Service may require in the year 1710" was submitted to the House on the 29th November by Robert Walpole (Commons Journals XVI, pp. 227–8). It was as follows:

The above Estimate for the Forces in Spain and Portugal was accepted by the House without any alteration and Supply was voted on the 2nd December (Commons Journals XVI, p. 231).

Three days later, on the 5th December, the Estimate for the Extraordinaries of the War was presented. This Estimate was as follows (5 Dec. 1709. Commons Journals XVI, pp. 233–4):

After the above item of Extraordinaries of the War there only remained one Estimate to be presented, viz. that concerning the Transport. As this Service was of so uncertain and unpredictable a nature it had become the practice of the Transport Office to present to the House an account of the Transport Debt as at the preceding Michaelmas with a bare statement of the number of ships still in employ and "running in pay" as at that date. Such an account had been presented to the House on the 1st December as follows (Commons Journals XVI, p. 230):

As in previous years the House made its own forecast of the means required for the Transport Service, and on the 10th December it voted 144,000l. "towards defraying the charge of transporting Land Forces" for the financial year 1710 (10 Dec., Commons Journals XVI, p. 236). This figure was the same as that for the preceding year and had evidently become a standing or stereotyped vote like that for the Navy Ordinary.

On the same day on which this vote was taken the House completed the Supply Votes for the year by the adoption of three items:

(1) 234,974l. 10s. 10½d. "to defray some Extraordinary charges of the war not yet provided for by Parliament." This is the exact sum as in the Estimate supra, p. xiv.

(2) 49,357l. 17s. 2d. for payment of one year's interest of the unsatisfied Debentures for Army Debt and Transport Debt charged on Forfeitures of Irish Lands. This vote has been already explained in the Introduction to Vol. XXIII, pp. xxxi–xxxvii of this Calendar. As usual it has been preceded by the presentation of a petition from several of the holders of such unsatisfied Debentures in behalf of themselves and the rest of the proprietors thereof (30 Nov., Commons Journals XVI, p. 229): the petition stating that the Debentures amounted to about 960,000l., which had fallen to a discount of 30 per cent. by reason of non-payment of principal and interest.

(3) 144,000l. for Transport: as above.

(4) 2,000l. for the charge of circulating the old Exchequer Bills for another year. This item has also been explained in the abovesaid Introduction.

The voting of these three items completed the Parliamentary Supply for the financial year 1710 and it will be noticed that with one exception the votes adopt the budget Estimates without change. In strong contrast also with the dilatory and factious proceedings on the 1709 Budget the total Supply had been agreed and voted in less than a month from the opening of the Session.

The complete series of Supply votes is as follows:

In the account infra, p. xx, these last three items will be found as added to the charge or debit side of the Supply grants. I do not accept this view. In a sense they may be regarded as increasing the liability resting on the Lord Treasurer's shoulders. Parliament acknowledged the liability of the items but made no corresponding grant of Supply to meet them. For instance, the total of loans authorised on the Malt Bill was 650,000l., including the transfer item of 224,754l. 9s. 0½d. So that in this case the Supply grant was diminished by so much. The Lord Treasurer could only issue new loans on Malt to the amount of 425,245l. 10s. 11½d. instead of 650,000l., and this reduced figure was the limit to which he could help himself out of this Fund towards the service of the year 1710.

Without going into the details of the search for Ways and Means adopted to implement the above series of Supply Votes it is possible to present succinctly in a tabular form the expected yield of the Budget proposals which were adopted:

The actual, as distinct from the estimated, yield of the above Ways and Means within the financial year 1710 and towards the service of that year was as follows:

Out of the above newly provided Budget resources added to remains of disposable money in his hands the Lord Treasurer made the following payments towards the fighting services and towards the unfunded Debt interest services:

On the mere "Services" part of the year's financial operations Treasurer Godolphin had issued 7,358,944l. 13s. 10d. to Navy, Army, Ordnance and Transport, as against budgeted Ways and Means receipts of only 6,426,186l. 18s. 2¾d. So that his payments had exceeded his income by 932,157l. 15s. 7¼d., which included his payments for interest money. The complete financial statement for the year gives a more complete result. According to the full statement he ended the year in debt on his Loan Money account to the extent of 2,396,760l. 8s. 11¼d., against which he could set off only a slight improvement in his Exchequer cash position and a large extinguishment of Service arrears, which meant an amelioration in the services' floating debt position. In brief abstract the full financial statement is as follows:

It is an extraordinarily complicated and difficult task to arrive at a reconciliation of the purely "Services" budgetary statement (which merely strikes a balance between the Supply voted by the House of Commons and the application of that Supply by the Treasury) with the full financial statement (which includes the "Services" statement and also the general Debt position and the Exchequer Cash position as well as the Civil List). The separate analyses of the "Services" budgetary statement yields the following results:

The total payments for the services were:

Treasurer Godolphin's issues or payments for the services therefore exceeded the Estimates and the Parliamentary votes by this figure of 392,859l. 15s. 10½d. and at the same time his "carry forward" of floating debt on the services had diminished by the same amount, i.e. by the difference between 986,725l. 18s. 11¾d. outstanding at Michaelmas 1709 and 593,866l. 3s. 0¼d. left outstanding at the end of the year at Michaelmas 1710. The excess issues had gone to liquidating so much of the floating debt resting on the services.

Simultaneously he had in the course of the same twelve months paid a sum of 696,674l. 14s. 4¼d. for interest on loans on the Public Registers, that is, of loans taken in at the Exchequer on the strength of Parliamentary guarantee. Out of the total sum of interest money so paid a comparatively small amount (viz. 81,598l. 5s. 9d.) was derived from Sinking Fund arrangements already in operation under the two Deficiencies Acts of 8–9 Wm. III., c. 20, and 1 Anne, c. 7. After the deduction of this figure the balance (viz. 615,076l. 8s. 7¼d.) of interest money so paid is to be understood as found or provided by the Lord Treasurer out of his Exchequer means generally and without any assistance whatever from the House of Commons, as the House had granted no Supply for the payment of interest on loans on Public Registers.

There remained a third item which the Lord Treasurer could reckon as a credit item in his loan money statement. At the end of the year, at Michaelmas 1710, his Exchequer cash position, the item of "Remains", had improved very considerably.

His "Remains" at the beginning of the year, at Michaelmas 1709, amounted to 1,182,970l. 12s. 9d.: at the end of the year this item had risen to 1,549,881l. 2s. 0¾d., an increase of 369,910l. 9s. 3½d., which meant a betterment of his cash reserves.

Furthermore, as a fourth item to his credit Treasurer Godolphin had liquidated three sums of deficiencies or shortages in previous years' loans and operations, being deficiencies or unprovided allowances which the Parliament had accepted and had transferred to the Supply of the year 1710. These sums were as follows:

Fifthly, Godolphin had made good the deficiency in the Civil List. He had effected this by taking the responsibility for the tin loan and putting it on his general loan account. This operation was of so complicated a nature that a word of explanation is necessary.

Whenever the revenue of the Duchy of Cornwall was in the Crown, by reason of the non-existence of a Prince of Wales and Duke of Cornwall, the revenues were administered by the Lord Treasurer. Amongst the sources of the Duchy revenues was the Crown's right of the pre-emption of tin. The purchase price at which the Crown took the tin was settled by articles of agreement with the Convocation of Tinners. The various Stannaries shipped the tin to London, the Crown sold the tin in the market and out of the proceeds paid the tinners their due. But in actual practice the procedure was not nearly so simple as this. As soon as the tin was within sight, the Crown or the Lord Treasurer, commissioned certain merchants to sell it, mostly on the Amsterdam and Antwerp markets. But before the merchants were put in possession of the tin they made a loan to the Crown on strength of the deposit. These formed the item of "Loans on tin" in the Civil List account. When the tin was sold in Amsterdam, &c. the merchants, out of the purchase price, recouped themselves for their loans and commission and brokerage &c. The natural completion of the transaction would and should have been the payment by the Crown of the tinners' debts by applying thereto the loans from the merchants. But this was the point where the cycle of the operation broke down. The Lord Treasurer was invariably driven, by his needs, to turn the merchants' loans into the Exchequer and to apply them to meet his general financial requirements. The tinners of the Duchy of Cornwall made one item in the full list of those requirements and inevitably had to wait their turn for settlement. But Godolphin did what he could for them. In the course of the year 1710 he issued sums totalling 158,600l. for them and this amount stands to the credit side of the Civil List account. Thus the Civil List account stands debited with the full amount of the tin loans (277,872l. 2s. 0½d.) and credited with the amount of 158,600l. as for part repayment thereof. But in the Lord Treasurer's account (or the Exchequer account) of Loan money for the year 1710 the tin loan total (277,872l. 2s. 0½d.) stands to the debit of the account without any contrary credit entry at all. The only credit entry possible would have been a complete discharge from the merchants when they had recouped themselves out of the proceeds of the sale of tin; and evidently at the time the Exchequer account was closed (i.e. at Michaelmas 1710) the transaction was still unfinished and the merchants could not give the Lord Treasurer his discharge in the form of an acquittance at the close of the sales.

This is not quite the end of the story. After the Civil List account had been credited with the sum of 158,600l. for part repayment of the tinners' loan money there remained the balance of 119,270l. 2s. 0½d. to make up the full total of 277,872l. 2s. 0½d. This balance was applied by the Lord Treasurer to the general purposes of the Civil List and thereby the income of the Civil List was raised from 578,127l. 2s. 3½d. to 697,502l. 2s. 3½d. This brought the Civil List income or receipts to as near as possible the normal 700,000l. which was supposed to be the Parliamentary guarantee of the Civil List income of the Crown. In this way therefore the loans on tin were used to aid or supplement the Civil List account, but constitutionally the method employed was improper. The guarantee for the provision of 700,000l. a year for the Civil List was a Parliamentary guarantee and the deficiency of the revenue should have been met by a fresh provision of Supply by the House of Commons. As it was, the deficiency fell on the the Treasury account of general Loan money and would some day appear in an ever growing item of Exchequer Loan deficit in an omnibus bill for Deficiencies generally.

But we are not yet at an end with the Treasury Loan money account. In the preceding year 1709 Godophin had borrowed (in the form of cash loans or tallies issued) an amount of 5,693,907l. 7s. 5½d. At the end of that year (at September 1709) slightly over five millions remained still to be liquidated out of the cash receipts arising from the Taxes and other Parliamentary Supply granted by the Commons for the service of the year 1709. These cash receipts only accrued and came in during the currency of the year 1710 and according to the statement, supra, pp. xx–xxi, those accruing receipts fell short of the outstanding or remaining total of the 1709 loan money account. The receipts were:

How much the shortage actually was it would be most difficult to say, but in all probability it was equal to or was fairly accounted for by the Parliamentary Loan transfer item in the 1710 Loan money account. On this assumption it is possible to reconstruct the General Loan money account of the last year of Godolphin's administration as follows:

The upshot of all this is that when Treasurer Godolphin fell from power he left to his successors a running Exchequer Loan money deficit of 2,396,760l. 8s. 11¼d., but by the aid of that money he had balanced or cleaned up or reinforced six items of deficit, five of which would otherwise have been clamouring for payment or liquidation, whilst the remaining sixth item was a strengthening of the Exchequer "cash in hand" position by the amount of 369,910l. 9s. 3¼d.

The meaning and the inevitableness of the adverse balance of loan money can be seen at a glance.

By eliminating the item of "Remains" and reducing the financial statement for the year 1710 to its simplest terms of actual Revenue and actual Expenditure the cause of the breakdown in the Parliamentary finance becomes instantly self evident and clear.

According to this the breakdown or the shortage of revenue was over two millions and in itself easily accounts for the adverse balance of the Exchequer Loan money account. What marks the last year of Godolphin's administration with the stamp of disinterestedness and cleanliness was the fact that whilst meeting this two million deficit and keeping all the services fully supplied, including the Civil List and the Debt service, he had in addition succeeded in wiping out or reducing a series of floating Departmental Deficiencies and had built up a stronger "cash in hand" position to leave to his successor.

All this he did without one word of reproach to the Parliament to whose ignorance of finance, or mere adherence to political warfare, all his financial troubles were due.

Earlier in the Session of 1709–10, whilst still the House was considering the Estimates in Committee, there had seemed a possibility that some consideration might be given to the subject of accruing debts. Under the date of 21 January 1709–10 Luttrell (VI, 537) has the following entry:

"Yesterday the Commons went into a Committee of Ways and Means for raising the rest of the money wanting. Mr. Lowndes proposed several heads, one for a halfpenny per 1b. on candles, soap &c. ... Afterwards debated the debts of the nation and ordered an Address to the Queen to lay before them an account of these [debts] as yet unprovided for by Parliament."

If this motion had been resolutely pursued there is perhaps a possibility that provision would have been made for the adverse balance of Loan money and that Godolphin would have left office without bequeathing any current debt to his successor.

This possibility, however, was cut short by the political explosion of the Sacheveral trial and the opportunity of accommodation was gone for ever.

But even so this is not the full story of Godolphin's disinterested care for the financial stresses and problems which were bound to confront his successors and to weigh heavily upon them. His personality, usually so reticent, is revealed and illuminated by the Brydges correspondence forming part of the Stowe MSS. now in the Huntingdon Library at San Francisco. James Brydges, afterwards the first Duke of Chandos, was Paymaster of the Forces Abroad from 1707 onwards, having succeeded Charles Fox in that office. As in the case of Fox's forerunner, the Earl of Ranelagh, enormous sums passed through his hands, but Brydges has met with a very different fate at the hands of posterity. Ranelagh died poor, but his just and clean administration was slanderously besmirched by Robert Harley. The detestable and untruthful attack which Harley made on Ranelagh was only a part of Harley's insidious campaign of vilification against the memory of William III and Ranelagh's death prevented the answer which could have been given to the unspeakable villainy of the slanderer.

But Brydges lived on into the administration of Robert Harley and served under him, and so he met a kindlier fate. That, however, is not the point. It is clear from Brydges' correspondence that he had a sincere and personal regard for Godolphin. On the 18th August, ten days after Godolphin's dismissal, Brydges wrote to the Duke of Marlborough as follows:

"Upon the way homewards I was struck with the news of my Lord Treasurer having lost the staff. Your Grace may well imagine his particular goodness to me made me highly sensible of my own loss, but I had more melancholy thoughts when I considered how far it might affect the publick to which his wisdom, probity and deep experience was far more important than his patronage to his private friends and servants. With this unpleasant prospect before my eyes and moved by a full sense of gratitude to those from whom I had received so many obligations, I was ready to surrender my employment (as I still am) whenever your Grace and he [Godolphin] think it conduces to your service and to have my bottom [? balance] wound up, though by hands who would pretend at least to be angry at my quitting. But upon a conference I had with his Lordship [Godolphin] the morning I came to town I found it was his opinion I should not quitt, upon which I continue in the service. Nothing more shews the greatness of his mind than his endeavours at this instant to render the Queen's affairs easy and to procure credit now as much as he did when he was in the actual possession of his post."

Writing less than a week later to John Drummond, exchange agent at Amsterdam, Brydges gives further details of the Lord Treasurer's dismissal:

"The news of my Lord Godolphin's dismission found me upon the road and the remainder of my journey was spent in the disagreeable contemplation of the melancholy prospect these measures ... lay before us. When I came to town I soon heard the occasion and manner of it ... The Army, Navy, Transport &c. wanting a sum of money to carry on the service we sent up our deputies or instruments to the Bank to borrow of them on a deposit of tallies, but they refusing to lend, application was made to my Lord Treasurer, who summoned the Bank to attend him next day. When they were come his Lordship used all the arguments he could think of, both relating to the public concern and his own particular interest (in regard at this juncture it might by the world be interpreted a want of heartiness in his Lordship) to press them to a work so necessary. He drove them at last to the pass of owning that what stuck upon 'em and had occasioned the Resolution they were come to, was the apprehension thay had that credit might still come to so much lower an ebb that the consequences of it might endanger the wellbeing of the Bank, which could not fail of being very terribly shaken by it if it [credit] should fall much lower; that these fears are [were] grounded upon the uncertainty they were in whether her Majesty would think fit to dissolve the present Parliament and make further changes in the Ministry, which, if she should, they thought would produce the effects they so much dreaded; and therefore they could not be of opinion that it would be safe for them to advance any further sum or make any new loans unless her Majesty would have the goodness to make a public declaration to quiet the minds of her subjects in these matters.

"My Lord told them that what they had urged was of such weight he would not take upon him to repeat it to the Queen, but desired they would put it in writing, which they immediately did, and he promised to lay it before her Majesty.

"Accordingly in the afternoon he attended at Kensington, was with the Queen above two hours, and when he came out appeared with an air of chearfulness and content that had not been seen for some time in his countenance, and was so thoroughly persuaded himself of his success that meeting Vrÿberg [the Dutch Envoy] in the antechamber he went up to him, told him he had gained his point and that he might assure his Masters the same.

"But the event showed how much his Lordship was mistaken: for next morning a servant came from the Queen with a letter to him, saying he had orders to deliver it into his own hands or, if he was not stirring, into the hands of his chief gentleman and to take his name. The gentleman being called received the letter and delivered it to my Lord, upon which he arose and sent for Mr. Smith, the Chancellor of the Exchequer.

"As soon as he was come he read the letter to him, the purpose of which was that though the hardships she had of late received were greater than she could longer bear, yet in consideration of his many faithful services to her she could not find in her heart to take the staff from him, but desired him to save her that trouble and to break it himself.

"After which he [Godolphin] told him [Smith] that his sending for him was to desire him to be an eye witness of his obedience to her Majesty's commands: upon which he broke the staff and desired Mr. Smith to go and acquaint the Queen with it: which he [Smith] did and at the same time surrendered his own employment of Chancellor of the Exchequer.

"Thus passed this great affair."

In an attempt to soothe the agitation of the public caused by the change of the Ministry and to arrest the fall of the funds, Harley employed De Foe to write on the subject of Public Credit. The Essay upon Public Credit stamps De Foe as the foremost economist of his time and country. It was so good that Harley impudently claimed it and published it for his own. In fact, however, he was no more capable of writing such an Essay than he was of telling the truth to his own conscience. But De Foe's words were a double-edged sword. They cut both ways. His argument as a piece of special pleading had its tail in its mouth. Its premises were too broad and sound for the puny time-serving conclusion which he deduces from them. Credit, he says, is not an adjunct to or dependent upon persons, particular men, families, clans, but upon their conduct, their honour, justice and fair dealing. Credit is the consequence of just and honourable dealing; fair proposals punctually performed will bring credit, let the person or people be who they will. Then he goes on:

"I do not examine what public reason may induce her Majesty to change or remove her great men in the Ministry. I enquire not whether her Majesty purposes to dissolve the Parliament or to let them sit. These things are not concerned in our case. The late Lord Treasurer [Godolphin] I allow has done honourably, has managed the finances with a great and unusual dexterity and has acquired thereby the fame of the best officer that has for many years acted in that post. I could be content to spend a whole page in his praise. The nation is infinitely obliged to him; and his royal mistress, no doubt, has received infinite satisfaction in his conduct, as appears by [her] rejecting all attempts against him and keeping him so long in a post of so great trust."

Although De Foe was eating Harley's bread when he wrote the "Essay" his nature was inherently too honest and truthful not to bear such noble testimony to Godolphin's record. But De Foe was not the only hack whom Harley employed to hound down Godolphin and the Whig Ministry and the Bank of England. Some one, on the level of a Grub Street hireling, produced a broadside, in the form of a satrical mock "most loyal address of the Bank of England" to her Majesty. The writer of it had no scruples whatever about grammar or veracity:

"We your Majesty's most audacious, imperious, Directing and Commanding subjects, the Governor and Royal Company of the Bank of England assembled at G[resham] H[ouse] in the city of London on the 20th June 1710

do unwillingly and sorrowfully imbrace the unfortunate opportunity of giving your Majesty our unnatural and unhearty assurances and non-performances, and that we are not willing nor I doubt at this juncture shall not be very ready to sacrifice our lives and fortunes and all things else that is near and dear to us in the defence of your most sacred prerogative, person and Government against the French King, his grandson and the Pretender to your Crown and dignity unless your Majesty might give us leave to direct you and your great Council of the nation what persons in your Government are most fitting at this critical time to be employed and entrusted in offices and State affairs.

And if your Majesty and your Council should turn out the Low Church party, those peaceful and moderate gentlemen, without our advice we shall take upon us to say and to make your Majesty sensible that your Parliamentary Funds are already low and will be very Deficient; so shall also the credit of this great and noble Bank follow in an instant if such honourable persons, whose known loyalty to the Crown, and great interest and stock in it, are displaced...

and so on and so on. The ponderous effrontery, the illogicality, the ineptitude, the grammatical blundering of this effusion suggest the pen of Harley himself. He could not write a respectable letter nor pursue the sequence of a single thread of thought or argument.

In reply the witer makes the Queen say:

"Gentlemen. I have a greater regard to the publick credit of the nation than any of my subjects; and I design to have those about me that I can confide in; and I shall discountenance those that contrive to make my reign uneasie."

State of the National Debt at the time of Godolphin's dismissal.

In view of the perplexity of detail the following statement is tentative only and I attempt no summation. A definite statement of a total of debt at any particular date would be misleading rather than helpful.

Annual Loans on Supply under Parliamentary guarantee.

This category covers all short term debt liquidated annually out of Supply. I do not therefore include it in a statement of National Debt.

I do not attempt to add up these figures. Under any conditions they are only approximate and in the case of the Funded Debt items an allowance would have to be made for the proportionate capital amounts liquidated up to the date of Godolphin's dismissal. Such figures at any time could only have been obtainable from the Registers in the Exchequer.

In the Journals of the House there are printed only the following three statements of account which in any way elucidate the above calculation of the National Debts as at the time of Godolphin's dismissal.

The successive Introductions to the volumes of this Calendar have contained running comments by way of elucidation of the ever recurring financial difficulties which every Lord Treasurer of England had to face under Wm. III. and Anne, indeed ever since the Restoration of Charles II. In briefest reiteration they were due to two vices in our financial system which were never radically cut out until comparatively modern times, viz.: (1) insufficient grant of Supply by the House of Commons. This was owing mainly to financial ignorance on the part of the House and to bad leadership on the part of the Executive. But under both William and Anne this cause was accentuated by the viciousness of party strife.

(2) The deficiency in the yield of Supply when once actually granted. This defect could only be supplied under Wm. and Anne by recurring Deficiency Acts to take up the slack.

But for the inescapable operation of these two causes the increase of the National Debt might have been avoided and Godolphin could have left office with as clean a slate as his worthy record deserved.