Introduction: Part Two

Introduction (continued)

Finally, in the following account ample proof is afforded of the fact that the stop of the Exchequer made very little difference to the course of liquidation of the debts due from the State to private individuals (other than bankers). All the following payments are payments made after the stop of the Exchequer in liquidation of debts incurred before the stop. They are mainly liquidation of loans from private individuals.

Table.

Loan money re-paid and interest paid in the half-year succeeding the stop of the Exchequer.

The inferences to be drawn from the above figures are perfectly simple and clear. Even if the income of 1,200,000l., which Parliament had nominally granted to Charles, had been fully realised it would have been inadequate to answer the average peace expenditure of the nation. But, in addition to this, it has been shown that such income never was realised. The sources of revenue which should have produced 1,200,000l. a year only produced on an average of years 1660–72 between 800,000l. and 900,000l. a year. If there had been no Dutch war and if Parliament had refused all further aid to the executive in the way of Parliamentary assessments of various kinds the annual deficit of between 300,000l. and 400,000l. on the peace establishment would by the year 1672 have produced a national debt of between four and five millions. The actual debt as it stood in Jan., 1672, was probably 2 millions short of this. It may be roughly stated at about 2¼ millions: viz. a million due to the Bankers and a clear year's anticipation of the ordinary revenue, that anticipation taking the double form of departmental debts accruing in the various services and of assignments to private individuals, such as did not fall under the operation of the stop of the Exchequer. It must not be inferred from this that the extra Parliamentary supply which had been voted primarily for the Dutch war had not only paid the bill for that war but had also provided a million and a half or more towards liquidating the accruing debt on the peace establishment. For it must not be forgotten, as will be shown immediately, that one of the ways in which Parliament assisted Charles was to kindly give him permission to sell what was then practically his private estate. The amount realised by the sale of fee farms will be stated later on. For the moment it may be taken at roughly 700,000l. I am only concerned to point out here the iniquitous and disgraceful nature of the proceeding itself. If a modern Prime Minister were requested by Parliament to meet a deficit on the year's budget by selling his private estate and turning the proceeds into the national Exchequer he would probably stare very hard. Yet this is practically what the proposal for the sale of fee farms amounted to. Charles was the head of the executive and as such he had to meet the whole of the national expenditure on all the services, Army, Navy, Civil Service, Ambassadorial Service, Judicial Service, as well as the more private expenditure connected with his kingly state which is now conveniently known as the Civil List. If Charles had said to Parliament I will keep my own income (from Crown lands and hereditary dues and rights of the Crown) for the maintenance of my kingly state and I will only spend on the national services, the Navy and so on, just so much as and no more than you specifically provide for such services he would have been within his rights and he would, in addition, have been better off than he actually was. But to have done this would have been to anticipate the constitutional development which only came a generation later. It would have been tantamount to taking the Parliament into partnership in the management of the executive government of the country, and neither Charles nor the Parliament dreamed of such an arrangement. By immemorial tradition the executive was entirely within the kingly prerogative, and by sheer force of instinct both sides, both the King and Parliament, clung to the tradition, the King out of jealousy for his prerogative, the Parliament out of a blind desire to preserve the Parliamentary right of formulating grievances. Such formulation of grievances, petitions of right, remonstrances, impeachments, and what not were the only expedient which the imperfectly worked and imperfectly understood governmental system of the time provided as a means of popular criticism of the executive. And if Parliament had accepted a share of responsibility for the executive before a party system had been developed there would have existed no possible means of criticising and checking the doings of the executive. Parliament would have forfeited its own right of criticising and there was no other power in sight which could (like His Majesty's Opposition of to-day) have assumed the inheritance of that right. In matters of internal politics such a situation or system produced very little friction except when religious questions were involved, but in matters of external or foreign politics there was an ever present possibility of disagreement the moment Parliament began to suspect the King (the executive) of pursuing a policy which it did not regard as national. The patriotism and the strong common sense of the Tudors saved them from such danger. Their foreign policy was always national and acceptable to Parliament, and accordingly that body was quiescent. But with the Stuarts this was not so; and it was here that the most dangerous friction arose. James I.'s Spanish policy and Charles II.'s French policy were utterly opposed to the instincts of both Parliament and nation, and in the case of Charles II. the antagonism was accentuated and embittered by the inflamed Protestant jealous fears of the nation. With such a situation it was almost impossible to find a common ground of agreement between the King (the executive) and the Parliament, and, as a consequence, it was hopeless to expect any solution to the financial difficulties which continually dogged Charles's footsteps. So much must at least be said for the Parliament. But when so much has been said it still remains true that in its financial arrangements the Parliament had not kept faith with the King. The sources of revenue which it had assigned never did produce the sum intended, the 1,200,000l. per an. which the Parliament solemnly undertook to provide, and, as a consequence, Charles was left to run the national services with an ever increasing debt upon them, and with no hope of adequate assistance from his Parliament. Every page of the Calendar of Treasury Records is proof of the manful zeal and fidelity with which his servants, from the Lord Treasurer down to the meanest clerk, strove to keep the machinery of the State running even under the direst financial stress. But no amount of zeal could avert the bankruptcy. Only an adequate Parliamentary supply could avert it, and this was not forthcoming. Between the year 1669 and Jan. of 1672, when the stop of the Exchequer occurred, the only Parliamentary grants which were made as follows:—
(1) The first Wine Act (19 and 20 Car. II., c. 6) intended to raise 310,000l. in the two years 1668, June 24, and 1670, June 24: that is (allowing 10,000l. for expenses of collection) intended to produce only 150,000l. a year. As a matter of fact this tax did not produce the intended sum. It fell short of the total by 49,422l. 2s. 1½d., see p. 669 of the present Calendar.
(2) The second Wine Act (22 Car. II. c. 3), granting, for eight years, 1670–8, a certain imposition on wines and vinegar. It will be seen from the table of revenue, supra p. x, that this second Wine Act produced, before the stop of the Exchequer, only 91,700l. for the year 1670, Mich, to 1671, Mich After the latter date the receipts from the duty are included under the Customs receipts.
(3) The Act for the sale of fee farm and other rents (22 Car. II., c. 6, and 22 and 23 Car. II., c. 24) and the Act to enable the King to make leases, &c., in the Duchy of Cornwall (22 Car. II., c. 7). As already stated, these two Acts simply amounted to the nefarious proposition that the King should sell his private estate to pay the nation's bills. The transaction as a whole was not completed within the period of the present instalment of calendar.
(4) The Act for the subsidy (22 and 23 Car. II., c. 3). Up to the time of the stop of the Exchequer this tax only produced 210,951l. 4s. 1d.
(5) The Act for the Additional Excise (22 and 23 Car. II., c. 5). The value of this tax for revenue purpose is given on pp. 736, 833 of the present Calendar. When let to farm it produced (nominally) for the country Excise 49,962l. 10s. 0d. and for the London Excise 54,000l. per an.
(6) The Act for impositions on proceedings at law (the ancestor of the later Stamp Duties) (22 and 23 Car. II., c. 9). Before the stop of the Exchequer this tax only produced 7,412l. 7s. 10d.

Thus the total Parliamentary supply granted between 1669 and 1672, as a reinforcement of the King's deficient revenue, only produced in those years roughly 660,000l. in all, and this was at a time when the debt on the services certainly amounted to over 2,000,000l. and when the shortage on the ordinary revenue was nearly 400,000l. per annum. In other words, the additional Parliamentary supply voted in those years did not even make up for the yearly deficit, and left the existing debt absolutely unprovided for. How could any executive Government avoid defaulting under such circumstances?

So much for the inevitable nature of the national bankruptcy of 1672. Now as to the technical nature of the transaction itself.

Firstly. Generally speaking the most favourite device employed by the executive in order to obtain a balance of running cash to work the services was the letting to farm of such of the sources of revenue as could be farmed. The inducement in each case was the advance which the respective Farmers were, by their convenants, bound to make as security for the performance of their contract. In the case of the Customs the advance was on an average 250,000l. The intended farm of 1671 broke down over the question of the advance and of defalcations. (See Hist. MSS. Rep. XIII. vi. 6.) The advances on the Excise amounted to a quarter's rent on each of the country farms (see pp. 832–3 infra) and 35,000l. on the London Excise (raised to 48,500l. after the imposition of the additional Excise). The first Wine Act was expressly forbidden by Parliament to be let to farm. But the technical difficulty was got over by the executive obtaining loans in advance to the full face value of the tax from the Vintners' Company acting through the agency of a certain number of vintners headed by John Wadlow. As security for repayment of their loan these vintners were appointed managers of the tax and the collection of it lay practically in their hands. The transaction amounted in reality to a farm. It cost the executive, besides the 10,000l. allowed by Parliament for expenses of collection, a further 13,000l. to the vintners for charges of management, and secondly a heavy interest on the advance, and thirdly at the end of the transaction certain defalcations which they demanded (which are not stated, as Wadlow's account has not been preserved; see p. 669 infra and the item Wadlow in the Index).

Secondly. Where a farm was impossible the executive was obliged to fall back upon a second device, viz., that of obtaining loans upon any available source of revenue. In the case of any fresh grant of revenue these loans were solicited and got in the moment that revenue had been granted by Parliament. For instance, the loans on the sale of fee farms amounted to 70,000l. before a single sale had taken place, and, similarly, the loans on the second Wine Act amounted to 20,000l. before a single penny had been received from the tax itself. But not merely were the newly granted sources of revenue thus hypothecated or mortgaged for advance loans. Similar loans were taken quite as a matter of course upon the two chief sources of revenue, the Customs and Excise. These latter branches, therefore, had a double charge to meet:—(a) the Farmers' advances, (b) individual loans. The Farmers' advances were invariably arranged to be liquidated by a deduction or stoppage out of the last termly payment due from them. The individual loans were repayable according to the course of the register.

Thirdly. As a third device, where there were no sources of revenue at all in sight or available the executive was driven to take in loans on the security of the Exchequer in general—a high sounding phrase which meant that the lenders would be repaid out of any money in the Exchequer if and when there should be any money to spare.

Private individuals made their loans upon head II. a and b, and head III., but as a rule the Bankers, being more wide awake, made their loans on head II.b, and to a much less degree on head III. The security which they most favoured was the Customs, as being the most reliable and prompt in payment. In all cases the loans were registered in the order in which they were made and ranked for repayment in the order in which they stood on the register. It may be stated roughly and as a rule that these loans on the chief branches of revenue amounted to a year's charge on them. That is to say a whole year's revenue of the chief branches was anticipated by loans taken in on the credit of them. For instance, a person making in June, 1669, a loan on the Customs would have (according to the order in which he stood on the register) an assignment for his repayment on the Customs of, say, June, 1670. In other cases the assignments were even as much as eighteen months ahead.

Up to the stop of the Exchequer all those assignments were scrupulously honoured and met. For instance, as will appear from the table of expenditure given on page xiv supra, in the Exchequer half year 1671, Easter, to Mich. there was repaid by means of such liquidation of registered assignments the sum of 234,366l. 19s. 7d. As old loans were paid off fresh ones were taken in. There was thus a continual stream or circle of credit and liquidation of credit, let us say, roughly, twelve months' credit, raised on the chief sources or branches of the revenue.

But in practice it was found impossible to make such assignments beyond a certain distance ahead. As the debt on the services grew the assignments tended to become more and more distant or remote, and as this meant a less realisable security lenders became shy.

As a fourth and final device of raising current credit, therefore, the executive was driven to the manufacture of paper orders, differing from the orders or assignments for repayment just described in only one respect, but that an all important one, viz., in that they did not correspond to loans actually made. I have already, in another connexion, explained the origin of this system of paper orders (see Economic Journal, Vol. XVI, pp. 33–40). They are of the greatest importance in the history of English finance in that they constitute the earliest instance of national fiduciary issue or paper money. The episode of their employment has been hitherto quite unknown to the historian owing to the fact that such employment was so short lived in its period and so disastrous in its results. Had the experiment not ended in disaster, had Charles's finances been sound enough to honour the issue of such paper, the system would have perpetuated itself and the Exchequer would have continued to finance its way by periodic issues of paper orders identical in substance with the later Exchequer bills. And in that case the Exchequer (as there was then no Bank of England in existence) might have developed a skill in the mere practice of such issues which would have done away with the later necessity of employing a bank such as the Bank of England for the operation. As a remoter result still we might have seen in England a system of national notes developed; instead of which the country was, later, obliged to adopt as a foster child the note issues of a single bank. If these developments had taken place they would have become the commonplaces of history. But the disaster of 1672 put a sudden and disastrous stop to the experiment, and it has accordingly dropped completely out of sight. Two short years, 1669–1671, cover its history, and even now, with the material of the present Calendar at our disposal, it is exceedingly difficult to reconstruct the story of it. The steps in the genesis of the idea may be briefly summarised. In the first place, the Parliament, in granting Charles the Additional Aid of 1667, provided, tentatively, a mechanism for anticipating the revenue from this source Persons were invited to (1) supply stores to the Navy or (2) to make loans pure and simple on the security of the revenue voted by the Act. For their repayment they were given paper orders entitling them to receive the face value of the order (plus interest) out of revenue of the tax when that revenue should have come into the Exchequer.

To prevent any favouritism these orders were to be registered in the exact order, according to date, in which they were issued, and were thus to rank for payment in a perfectly known course according to such register. Finally, they were made assignable by endorsement, and thus could pass freely from holder to holder if not from hand to hand. It is in these two latter features that the system of paper orders presented such immeasurable superiority over the preceding system of tallies of assignment. It was practically impossible to employ the system of registration to Exchequer tallies, and certainly impossible to make them pass from hand to hand by endorsement.

If the experiment had stopped here it would have been an unqualified success. But it did not stop here. It did not take Charles's Treasury officials long to draw a very natural inference from the legitimate success of the device. If we can anticipate the revenue of the Additional Aid by these bits of paper, why cannot we anticipate every other branch of revenue in the same way ? And we don't need to wait for people to come in and make us loans on these various revenues. We will make out paper orders just as we want them for supply of any particular service and register them just as the orders of loan are registered on the Additional Aid. And then all we have to do is to get people to accept these orders in settlement of their claims against the State. And so if the Treasurer of the Navy or the Paymaster of the Ordnance was clamouring for money to carry on those services a certain number of paper orders were written out, registered in their course or rotation on the Hearthmoney, Customs, Excise, Wine Duty and so on, and then delivered, as an imprest equivalent to so much cash, to the Treasurer of the Navy, or Paymaster General of the Forces, or so on. That individual was then left to his own devices. He might, as he saw fit, either pay them away in settlement of bills or he might turn them into ready cash by selling them in blocks to the Bankers or whoever would purchase them. For instance: Just before the death of the banker Colvile in Oct. 1670, the Cofferer of the Household left at Colvile's shop such orders (on the Excise) to the value of 10,674l. "to the end that if he liked the security" Colvile should advance ready money on them. The advance was prevented by Colvile's death. The orders were therefore not assigned and Colvile's widow handed them back to the Cofferer. (Exchequer Bills and Answers, London and Middlesex, 1278.)

To make such a device safe and workable there is one absolutely essential precedent condition. It must be based upon a fund. When the day for repayment or liquidation comes that fund must be free and otherwise uncharged so that it can be automatically applied in settlement of the paper. So long as this condition is complied with the paper issue is properly based and its emission is sound. Where it is not complied with then sooner or later there will be default. In the case in point Charles's issue of paper during the years 1669–1671 completely lacked this essential precedent condition for the simple reason that all the sources of revenue on which it was charged were already engaged or hypothecated for a clear year, or a year and a half ahead for repayment of the various forms of loan or advances described above. In a community in which the credit habit has taken deep root it would be an insignificant matter that an issue should be made based upon revenue three or more years ahead. But as far as State finance is concerned this credit habit was a complete innovation in Charles's reign. It had originated only in 1667 and had not had time to take root at all before his ministers, in 1669, launched out on this dangerous experiment. When the crash came, therefore, this paper was not found in general circulation. It was not in private hands. So much of it as had been negotiated remained in the hands of the Bankers, and so much of it as had not been negotiated remained in the portfolios of the Treasurers of the various executive departments, to whom it had been issued as imprests for the various services. For instance, the Treasurer of the Chamber, in his account for the year 1671. Michaelmas, to 1672, Michaelmas, charges himself with such paper as follows:—

In this single year 1671–2, therefore, the Treasurer of the Chamber had had issued to him 38,686l. 19s. 0d. in paper orders, and of these he had been only able to negotiate a little more than half. The balance, 17,356l. 4s. 7d., remained in his drawer as so much worthless paper, and it was so remaining there 13 years later, when, in Feb., 1685, he declared this account. But this was not the total of the worthless paper he had in his drawer when the crash came. For in the discharge side of the same account he takes credits for 10,200l. 4s. 9½d. of similar paper remaining out of the imprests to him in previous years, being "moneys payable on orders and tallies of loan detailed, as neither this accomptant hath received any money upon them or assigned any part of them to any person whatsoever."

The total of worthless paper, therefore, in the portfolio of this department amounted, at the time of the stop of the Exchequer, to 27,556l. 9s. 4½d. It was subsequently suppressed by the mere process of cancelling. I need not add, of course, that this item stands quite apart from the Bankers' debt—does not form any item in the total of that debt at all.

In the case of the Navy the items are much more formidable, as might be expected. But it is unfortunate in this case that the series of accounts is imperfect. Sir Thomas Littleton's account appears never to have been sworn and is certainly incomplete. But in Sir T. Osborne's account for the years 1671–3 (supra p. xviii) he takes credit to himself for the following items of paper money handed over by him to his successor:—

The above sums represent a sum of over half a million. But this sum again is not the full or final total. For he further credits himself with 661,108l. 5s. 6¾d. resting upon various imprest accomptants. This phrase means that out of the sums assigned to him out of the Exchequer (whether cash, tallies, Customs bills or paper orders) he had himself assigned that amount to subsidiary accomptants (the Victuallers of the Navy and so on) who were themselves liable to render accounts of their various separate imprests or liabilities. That a certain portion of this total of 661,108l. 5s. 6¾d. so issued by him had been issued in the form of paper orders I have not the slightest doubt. But it is utterly impossible to say what that portion amounted to. And it is also impossible to say what proportion of the total of paper thus carried forward in the accounts of the Treasurer of the Navy proved to be ultimately worthless [unrealisable] and was as such vacated or destroyed. The items, however, are sufficient to show how large the figures were and how reckless had been the creation of paper credit.

In estimating the financial complications of Charles's Government and the wreckage produced by the bankruptcy it is necessary to bear in mind these departmental stocks of paper, for the destruction of this paper years afterwards simply meant the adding of the amount so destroyed to the floating debt of the department concerned (for services or expense had been incurred upon credit of them), and that floating debt would continue to cripple the department until some day or other, some way or other, it was liquidated either by retrenchments or by fresh supply. One of the commonest misconceptions with regard to the whole of this episode is the supposition that the bankruptcy only affected the bankers. This was by no means so. It affected the departments and it affected some (not all) of the private individuals who, whilst not being within the category of bankers, were yet creditors of the State.

So much for the general surroundings of the question. What was the actual form which the declaration of bankruptcy took? At the outset, the rough and ready statement may be made that the Government announced its intention of defaulting only on its paper, that is to say on paper orders,—not permanently defaulting, but temporarily merely. The payment of these orders was postponed for a twelvemonth, and thus the various branches of revenue, which, as they came into the Exchequer, would automatically have been paid out in settlement of the orders according to the course of the register, were set free from that liability and made available for the national services.

The general operation of this device is explained by one who was himself concerned in it, as follows:— (fn. 1)
"To come then to the Hinge upon which this point turns, I do lay this down for an indisputable ground, That the Law and Usages of the Exchequer are Branches of the Common Law of this Land; and so is the Lord Chancellor Egertons Postnati, pag. 23 and 38. Plowden 320b. and 321b. The Case of Mines, and Cooks second Report 16b. Lane's Case adjudged. Now then by the Law of the Exchequer, when the King hath charged himself to the subject by tally (as in our Case) or by Liberate (as in Case of Letters Patents), to pay a sum of money out of his Customes, or any other branch of his Revenue, and his Receiver hath received this Revenew; this money, though at first it appertains in property to the King, yet as soon as ever the day assigned for payment comes, and the King's Creditor resorts to this Receiver, and shews him his tally or Liberate, and demands payment accordingly, the Property of this money (to the proportion of the Debt) by meer operation of Law, is transferr'd out of the King into the Collector or Receiver, and in an instant becomes the proper and personal money (I say the Proper and Personal Money) of the said Receiver; in respect of his charge over to the party. And so it is clearly affirmed by all the Judges of both Benches. Plowden 186a. Lord Dareyes Case. "Again, the Law (which never design'd that this money should abide always in the Receiver, whom it used only as a Conduit-Pipe. or mean of Conveyance) hath no sooner altered the property of the King's money into the Receiver, but the property of the rery same money when it becomes due to the Creditor, in the same Instant upon shewing of the talley, is altered once more, out of the Receiver into the King's Creditor; which is the Reason, that in such Case, as soon as ever the Receiver hath Assets in his hands, the Law gives an Action of Debt to the King's Creditor, against the said Receiver. And wheresoerer the Law gives a man an Action of Debt, it doth evermore first give him the Duty or Right, or Property in that thing for which that Action is brought. And this most evidently appears from the constant Pleading in this Action, which is, That the Defendant render unto the Plaintiff such and such sums of money [quas ei debet et injuste detinet, saith the writ] which the Defendant oweth to the Plaintiff, and unjustly deteineth or keeps from him. Now if the Defendant owe, and yet unjustly or wrongfully detein, why then he deteins that which is not his own, but that which is the Right or Property of the Plaintiff. F.N.B. 119. G. Termes de Ley, verbo Det. and all our Books. Besides, the common and known practice of the Exchequer is, That from the very point of time in which any talley is struck, the King's Receiver is ipso facto discharged upon his Account in the King's Books, to the value of that money secured by the same talley, And thereupon becomes Debter to the owner of that talley, when the Day of Payment happens, and he hath Assets in his hands.
Secondly, there is no man doubts but that the moneys lent upon the Oxford-Act of 17 Car. 2, cap. 1, for 1,250,000l. and upon the Pole-Money-Bill, 18 Car. 2, cap. 1, and upon the Act of 19 Car. 2, cap. 8, for 1,256,000l. were unquestionably secured to the Assignees of the Lenders by those several Acts: why then I say, that all moneys since that time Lent into the Exchequer, and charged upon any branch of the King's Revenue, are equally secur'd to them by this Act (19 Car. II., c. 12). And that not only, First, because this Act in the Preamble thereof refers expresly to those other Acts, and therefore must necessarily intend a Security of the same Vigor and strength to the Persons concern'd in this Act, as to those in the other Acts; But, Secondly (than which I think nothing can be plainer), Because the moneys secured by this Act to the Assignees, are secured with the same numerical, identical words, with which the moneys Lent upon the three other Acts are secured. The Ensuring Words in each of the Four Acts being, Viz. That the Assignee of such Money-Order, his Executors, etc., shall be entitled to the Benefit of such Order, and Payment thereon. Also the moneys since lent upon the Act of 22 and 23 Car. 2 (for granting a subsidy to his Majesty for supply of his extraordinary Occasions) are secured to the Lenders Assignees by the very same words in terminis, and no other. And these things will be obvious to any person that shall curiously compare all these Acts together; to the which, for Brevities sake, I am inforc'd to refer my Reader, and do accordingly request him to resort thereunto. So then if the moneys lent upon the guaranty of the Three former Acts, and of the latter of 22 and 23, were thereby secured to the Lenders and their Assignees (which no man hath hitherto been so frontless or impudent to deny) I would fain know why the moneys lent upon the guaranty of this Act, which I have here recited at large, are not thereby for the same Reason secured to the Bankers, and their Assignees, when the Ensuring Words in this Act, are numerically, and to a syllable, the same with those in the other Acts. A Reason certainly so plain and refulgent, that it seems to be wrote with a Beam of the Sun, and is invisible only to that man which designedly shuts his Eyes.

Let it be understood in passing that the various branches of revenue were not instantly by Charles's declaration set free from all liabilities of charges or assignments. There were various other advances which had still to run off, viz., the advances of the various farmers of revenue and also tallies in the hands of various individuals. These were not touched by the stop, and it will be seen, as has been already said, supra pp. xxvi-xxx, how much liquidation of such debts went on after the stop.

With this reservation it may be stated that the general effect of the stop was to enable the King to receive his revenue as and when it came in, and to employ it in paying the various services instead of its being earmarked for the liquidation of debt. It did not put him in the immediate possession of funds. It merely enabled him as his revenue came in to employ it unhampered for the Navy and other branches of national expenditure.

By restricting the application of the stop to the paper orders Charles practically restricted it to a little group of bankers. This result arose from the very simple reason that the paper had been issued in such masses and also in such large denominations (in some cases orders of 10,000l. each for instance) that only bankers could take them. About 2½ years after the stop Charles made provision for the payment of two years' interest to the bankers. The sum provided was 140,000l. for the two years, or 70,000l. a year, which at 6 per cent. gives a total bankers' debt of 1,166,666l. 15s. 0d. On that occasion the bankers concerned were enumerated as follows: Edward Backwell, Dorothea Colvile, administratrix of John Colvile, Isaac Meynell, Jeremiah Snow, John Portman, Robert Welstead, George Snell, Bernard Turner, Thomas Row, Joseph Hornby, Gilbert Whitehall, John Grymes, Thomas Price, Richard Stratford, Henry Lewes, Robert Ryves, Thomas Temple, Thomas Pardo and Isaac Collier.

The extraordinary thing about this list is that it is incomplete. It omits Sir Robert Vyner, who was by far the largest creditor of all. It also omits John Lindsey and Sir John Banks, and very possibly it omits the smaller names (of possibly private individuals) given below. It is likely that Banks's name was omitted because his indebtedness had been liquidated by means of grants of fee farms prior to the stop (see p. 1267 infra). But this was certainly not true in the case of John Lindsey. And as to Vyner it is just possible that the omission was due to the fact that the extraordinarily complicated nature of his accounts made it difficult, even so long after the stop, to prepare a statement of his full debt. Besides his loan transactions directly with the Exchequer, or directly with the Paymasters of the various departments, Vyner had been concerned in the chief farms of the branches of the revenue. He had been (with others) a Farmer of the Customs, of the Hearthmoney and of tin, and in addition as the King's goldsmith he was a large annual creditor of the Government for plate and other gold and silver works supplied regularly to Jewel House (usually to the amount of over 5,000l. or 6,000l. in a half year). It seems quite clear that as late as three years after the stop of the Exchequer no full statement of his account had been prepared by the auditors, and it is not until 1677 that we meet with a statement of it. In the following statement therefore the virtual omission of this item of Vyner's must be carefully borne in mind.

According to the accounts prepared by the auditors for the purpose of payment of the 2 years' interest after July, 1674, the following sums are stated as the principal debts of the chief of the above-named bankers:—

This list (besides omitting Vyner's debt) leaves unstated the debts due to Grymes, Stratford, Lewes, Ryves, Temple and Pardo.

In the years 1677–9 Charles made provision for the permanent payment of interest to the bankers by granting letters patent for the payment of annuities to those concerned. These grants state both the principal sum due and the grant per an. as interest thereon. The list is as follows:

In construing this list it is necessary to bear in mind that the principal sums appear as considerably larger than in the list of 1674. This is simply due to the fact that the unpaid interest due for the years 1674–7 had been added to the principal, not merely 6 per cent. interest, but compound interest at the rate of 6 per cent. (Throughout this Calendar the technical phrase for such allowance of compound interest is "by making the interest thereof into principal at the end of every six months.")

I do not attempt therefore to total up these figures, because the deduced total would not represent the debt as it stood in Jan., 1672, but as it stood in 1677 after it had been increased by 3 or more years of unpaid compounded interest. In addition I am not yet certain that all the items given in the list represent debts standing due in Jan., 1672, though as to the bulk of them there can be no possible doubt.

As to the separate character of each of the above debts it would be of the highest value to the historian if they could be analysed. For such an analysis would reveal at a glance the nature of the relations or transactions between the bankers and the Exchequer on the one hand and the departmental treasurers on the other. But up to the present I have discovered only two such accounts. One of them relates to the period just prior to the stop (see infra, pp. 1335–6). It is that of John Lindsey, and is exceedingly interesting as showing the multiplicity of funds (branches of the revenue) on which the bankers made advances. It also shows that Lindsey (besides lending money directly into the Exchequer) had taken paper orders from Sir Stephen Fox (Paymaster of the Forces), from Sir T. Osborne and Sir T. Littleton (Treasurers of the Navy), from P Packer (Paymaster of the Works), from Samuel Pepys (Treasurer for Tangiers), from Sir Edward Griffin (Treasurer of the Chamber) and from the Earl of Sandwich (Master of the Great Wardrobe); all of them being what I have throughout styled departmental Treasurers, to whom paper orders had been issued in bulk by the Treasury as imprests for their various departmental services. Finally it shows that Lindsey had in addition taken such paper orders from private individuals—let us say had bought them as a private speculation, possibly at a discount

For the mere purpose of the statement of the Bankers' debt in Jan, 1672, this particular statement is valueless. It represented only that portion of Lindsey's complete debt for which (owing to a specific engagement) provision was made for its full liquidation by means of a conveyance of fee farms to him. But as a typical instance of the various transactions of the bankers with the Departments it is highly significant.

The only other discoverable account is that of Jeremiah Snow. It is as follows:—

The most interesting account of all, if it could be recovered or re-constructed, would be that of Alderman Backwell. Such re-construction is, however, hardly to be hoped for. By the courtesy of Mr. J. Hilton Price I have had access to Alderman Backwell's ledgers, which are still in the possession of Messrs. Child, the bankers. The final ledger appears to be lost, but the existing registers carry Backwell's accounts beyond the period of the stop. But in these ledgers Backwell (as bankers always do) merely enters the names of the payer or payee. He does not specify the nature of either the credit item or the debit item. Thus it is impossible to tell whether we are dealing with cash transactions, customs bills, tallies or paper orders. In addition he does not enter his transactions with the Departmental Treasurers under the heading of such and such a department. but under the private individual name of the person with whom he dealt. For instance his dealings with the Customs are put under the heading of Richard Mounteney. This individual was the Cashier of the Customs both under the Customs Farmers and later under the Customs Commissioners. During the period of the Customs farm, dealings with him would be equivalent to dealings with the Farmers themselves. When the Customs were in commission dealings with him would be equivalent to dealings with the Executive direct; that is to say, if there were one general Richard Mounteney account. But we do not find such a general account. Without saying who or what Mounteney was and without specifying the difference between the accounts, Backwell runs at least three concurrent accounts with this individual through his books. Under the circumstances, therefore, I have been obliged to turn away from these valuable and interesting records ahungred, athirst and with an aching heart.

Before leaving the Bankers' side of this question it should be pointed out that the general phrase, the "bankers were broke," as Burnet puts it, is very wide of the mark. I have discovered no evidence of the bankruptcy of a single one of them as resulting immediately from the stop.

Lindsey's bankruptcy occurred in 1679, Backwell's in 1682, Vyner's in 1684, Rowe's in 1690 and Price's in 1715, and these are the only ones traceable. That their troubles with their customers began immediately is of course well known. Shaftesbury's elevation to the Lord Chancellorship is generally attributed to his willingness to do that which his predecessor Bridgman boggled at, viz., to issue injunctions to protect the bankers from the suits of their customers. In Michaelmas term, 1672, Joseph Hornby was sued by the executors of one of his customers, John White, and others for the recovery of their deposits, which the said Hornby had in the usual course of his business lent to the executive on the security of this or that branch of the revenue. The proceedings are contained in Exchequer Bills and Answers, London and Middlesex, No. 987, Mich. 24 Car. II., and are abstracted by Mr. J. Hilton Price in his Handbook of London Bankers.' The proceedings furnish a very typical illustration of the general transaction as between the banker and his customer on the one hand and the banker and the Executive on the other.
"Complaint by 'Joseph Horneby, citizen and Goldsmith of London.' He now exercises and 'for divers years last' has exercised 'the trade of a goldsmith in London.' and haveing in that time, at the desire of the King's most excellent Majestie and the great ministers and officers of his revenue of his Exchequer, advanced and furnished, as his Majestie's occasion required, considerable sums of money for his and the publicke service uppon the only security of being repayed the same with interest by way of orders on the Exchequer, Tallies and Assignments uppon the duties of customs, excise, fire-hearthes, and other branches of the King's revenue,' as the same should from time to time come in and be payable at the Receipt of the Exchequer; and there being for the advance of such loans and credit, a regular and settled course established in the said Court of Exchequer for the payment of all moneys borrowed and taken up upon such like securities with damages [interest] for the same, which course of payment has been generally taken notice of to have been constantly and inviolably observed without any interruption or alteration for divers years together.
"Divers persons, and particularly the Defendants to this action, who were unacquainted with the proceedings of the Exchequer and the way of paying in and receiving out money advanced as afore-said, and who regarded the sums they could lend as so small, that it was not worth the labour of attending the said Exchequer for the same, did, without so much as ever being spoken to by your orator or any on his behalfe, for that purpose, freely and voluntarily apply themselves to your orator to take and receive of him severall sums of money to be lent and disposed by your orator, uppon the securities and the credit aforesaid, they taking notice that your orator. by reason that he had exercised that kind of dealing and was experienced therein, and that there were divers persons that did entrust your orator soe to dispose and lend their monies, by which means your orator had opportunities of putting severall persons' monies into one sum, and of advancing and lending greater sums of money than himself or any other private person could doe, and for carrying on that affaire which was noe other way to be done.' 'Notes or Bonds' were given by your orator, or his servants, acknowledging the payment of so much money to your orator, 'as the moneys were paid at his shopps,' and promising the re-payment 'with damages at six per cent. per annum uppon demand or within five dayes after, as the usuall course was.'
"One of the Defendants, John White, so lent money and went abroad; and on returning to England learnt of 'the stopp of the Exchequer.' The orator paid him part of what he had lent, on condition he would not sue him for the remainder till the Exchequer should open again. White is dead, and his exors.—Thomas Wise and Francis Walters [or Waters]—have now sued orator in King's Bench. and although they know all the matter in orator's bill, as above, to be true, yet have caused him to be arrested for the money, and forced him to put in bail."
Similar action has been taken by another defendant hereto, Gilbert Metcalfe. In his answer to the bill Metcalfe recites that he has obtained judgment in the King's Bench against Hornby for his debt, with costs; from which judgment said Hornby herein has brought a writ of error.

A similar case concerning Gilbert Whitehall is contained in Exchequer Bills and Answers Easter 1 James II., London and Middlesex, No. 28. It is interesting as showing over how long a time the effects of the stop were spread, for this action was brought 13 years after that event.
Complaint of Gilbert Whitehall, of London, goldsmyth, that whereas your orator, together with Isaac Meynell and John Grimes, late of London, goldsmyths, deceased, became bound unto Benjamine Peake, of London, merchant, in a bond for 2,000l. dated Oct., 1671, conditioned for the payment of 1,000l. and interest thereof at a day now long since passed; and although by stopp of payments in the Exchequer your orator was disabled from paying the [said] debt, yet he endeavoured by all the ways he could the payment thereof, and did at severall times pay severall summes of money in parte thereof unto the said Benjamin Peak, amounting to 400l. Last October Peake pressed for another 100l., promising not to sue Whitehall for one year if he paid it. Whitehall complied with the demand; but notwithstanding this, the said Peake has lately arrested Whitehall and keeps him in prison.
The answer of Benjamin Peake to the bill of complaint of Gilbert Whitehall, Oct. 21, 1685, records that his promise was given on condition that Whitehall should pay the quarterly interest on the bond in addition to the 100l., which he has not done, and further, that he is the worse by knowing of the Complainant and his partners and other goldsmiths [by] the sum of 5,000l. which money was laid up to pay his late Majesty's customs, &c.
Other similar cases are contained in Exchequer Bills and answers, London and Middlesex, No. 863 (executors of Mathew Pills versus Sir Robert Vyner, Hen. Lewis and Rich. Stratford, Hilary 23–4 Car. II.); 931 (George Snell versus Nich. Bond, Mich. 24 Car. II.); 977 (Joseph Hornby versus Roger Chappell and Edw. Dyle, Mich. 24 Car. II.); 982 (Rob. Vyner, Hy. Lewis, and Ric. Stratford versus Anthony Welden, Mich. 24 Car II. The king expressed his displeasure against Weldon for being the first to commence a suit against Vyner); 1133 (Jeremy Snow v. Isaac Steasely, Trin. 26 Car II.); 1276, 1277, 1278 and 1324 (John Lyndsay and wife versus John Carew, Jane Crofts, Bridgett Read and John Hacker, all Easter 28 Car. II.); 1360 (J. Hornby versus T. Darcy, Mich. 28 Car. II.); 1395 (Mary Williams versus J. Lyndsay and wife, Trin. 30 Car. II.); 1408 (John Turner versus same, Trin. 29 Car. II.); 1469 (Eliz. Baker versus same, Mich. 29 Car. II.); 1529 (E. Lampen versus J. Portman, Easter 30 Car. II.); 1568 (T. Bowdler et al. versus J. Lindsey, Hilary 30–1 Car. II).

Of the effects of the stop upon the investing and mercantile community generally there is surprisingly little evidence either in the present calendar or in contemporaneous records. The most interesting passage concerning it is contained in one of Arlington's letters to Sunderland, dated Jan. 8, 1672.
In my last to Sir William Godolphin, I gave him an Account of His Majesty's having suspended all Payments upon Assignations in the Exchequer for one whole year; according to which, the inclosed Declaration of His Majesty in Council, was finally resolv'd upon, and order'd to be Printed; since which Resolution, the Distempers have continued in the Town, and the angry Discourses upon them; but His Majesty having yesterday convened the Bankers before him at the Treasury, and after many kind and confident Assurances given them that he would punctually satisfie his Debt to them, either out of what the Parliament should give him in the next Session, or out of his own Revenue, he told them he likewise required of them, that, without delay, they should take off the Stop they had made of paying the merchants their Current Cash, which lay deposited in their Hands, not to be Lent to his Occasions, or for Interest, but for the Security of keeping it; because, indeed, the stop of this was the Occasion of the great Clamour; the Merchants not daring, or being able to Accept, or Pay any Bills of Exchange, drive their Trade Abroad, or clear their Ships at the Custom-House at home. After many things the King said to them, and very handsomely upon the subject, they all went away better satisfy'd, Promising His Majesty they would this Day begin their Payments to the Merchants, which, I hear, they have accordingly done, and upon it, the Discontent is already visibly appeased; so that we do not doubt, but in a few days, it will quite wear out, and consequently His Majesty find himself in a condition of Arming out his Fleet with ready money, and supporting whatever shall happen to be his Game. with relation to the affairs abroad this summer.
Mr. Mountague hath not left us, the Disorder of the Bankers having discompos'd his Money matters; but he hopes, in a few days, to be at ease in them. [As to this latter see also Montagu's letter to Arlington 25 Feb., 1671–2, in Hist. MSS. Com. Rep. Buccleuch MSS., Montague House I, p. 512.]

There is further an amusing story of a Jew who the moment he heard that the King had shut up his Exchequer and all the bankers their shops made all imaginable haste to Holland, doubtless with the object of presenting bills for payment before the rumour of the stop should have reached the Continent (S.P. Dom., Car. II., 302–39). As far as the present volume of calendar is concerned all the evidence relating to this subject is brought together in the index under the head Exchequer (Receipt. Stop).

With regard to the merely technical nature of the procedure of the whole transaction of the stop of the Exchequer there only remains one point to elucidate. The original declaration (see infra, pp. 1172, 1177), had limited the stop to a twelvemonth. But as the end of year 1672 approached it was seen to be impossible to resume payments of the bankers' assignments. On the 11th December, 1672, a meeting of the Privy Council was held at which there was a large attendance. Besides the king no fewer than 27 privy councillors were present, viz., the Duke of York, Prince Rupert, Archbishop of Canterbury, Lord Chancellor, Lord Treasurer, Duke of Buckingham, Duke of Lauderdale, Marquess of Worcester, Marquess of Dorchester, Earl of Ogle, Earl of Ossory, Earl of Bridgewater, Earl of Bath, Earl of Anglesey, Earl of Craven, Earl of Arlington, Earl of Carbery, Visct. Fauconberg, Visct. Halifax, Bishop of London, Lord Newport, Lord Holles, Lord Berkeley, Secretary Coventry, the Chancellor of the Exchequer. the Master of the Ordnance and Sir T. Osborne At this meeting it was ordered "that the Earl of Arlington forthwith cause his Majesty's order and declaration touching the further stop of all payments out of the Exchequer until the 1st of May next ensuing, which was this day read and appointed at the Board, to be forthwith printed and published" (Privy Council Register X. 352). It was accordingly so published, being dated the same day, Dec. 11. (See S.P. Dom., Car. II. 318, No. 203.) When the 1st of May, 1673, arrived it was no longer necessary to renew it.

From that period the stop continued automatically for the simple reason that the funds which had been earmarked for payment of the Bankers' assignments before the stop had, by the 1st of May, 1673, run themselves off. The sixteen months, Jan. 1672 to May 1673. represented approximately the period for the duration of which Bankers' assignments constituted a first charge on the revenue. If after May, 1673, a Banker had presented at the Exchequer or at the Office of the Cashier of the Customs one of his orders and had demanded payment of it he would have received some such answer as this: "This order is charged for repayment on the Customs (or Hearthmoney or Wine Act, &c., &c.) of such a month. All the revenue of the Customs (or Hearthmoney or Wine Act, &c., &c.) for that month has been paid in long since and has been paid out again to such and such a person for such and such a service. There is, therefore, nothing left on that head of revenue of that particular month. Ergo there is nothing in this office out of which your order can be paid. So we must decline to pay it."

So much in fine for the attendant circumstances and the technical nature of the whole of this transaction. If the preceding exposition has been closely followed it will have made clear that the bankruptcy was inevitable from the first simply because Charles never enjoyed his full income, and because the additional Parliamentary supply was totally inadequate; secondly, that its actual approach was accelerated by the reckless creation of paper credit at a time when (the revenue being otherwise charged or mortgaged for a long period ahead) there were not adequate funds in sight to work off that paper; thirdly, that the actual form which the transaction took was that of defaulting on only one particular portion of the total national debt, namely— that portion which consisted in bankers' assignments in the form of paper orders. Under and during the stop provision was still made for the liquidation of other parts of debt— debt to individuals as well as service or departmental debts, and also the ordinary departmental expenditure. It is therefore clear as a consequence that Charles did not instantly swoop down on a large sum belonging to the bankers nor did he instantly come into the receipt of funds to the amount of the bankers' debt. All that had happened as far as he (or the executive) was concerned was that he had postponed repayment of a first debenture charge on his revenue and by the postponement was enabled to employ that revenue as it generally and slowly came in for the payment of the national or departmental expenditure.

Two important questions still remain with regard to the whole episode, questions which have been and will continue to be of more absorbing interest to the public at large merely because political issues have a glamour surrounding them which questions of dry finance can never possess. To whom individually, to what politician or minister, is to be attributed the counsel of stopping the Exchequer, and secondly what connexion was there between this step and the general trend of Charles's Frenchifying foreign policy?

As to the first of these it is astonishing that in spite of the mass of historical material that has been published within the last fifty years so little additional light can be thrown upon it. With the exception of such writers as Burnet, North, and the author of Plain Dealing, Somers Tracts, viii, 244 (who attribute the counsel to Shaftesbury) the opinion of contemporaries was prevailingly in favour of attributing it to Clifford. The general evidence is well summarised in Christie's life of Shaftesbury (II. 58–71), and the only material addition that can be made to his summary is an extract from the Diary of the Earl of Anglesey, Hist MSS. Reports XIII. VI, p. 270.
"1671–2, Jan. 2. An extraordinary Council being summoned I went out of my bed to it and gave the King faithful counsel against his seizing men's moneys, &c., and so did most of the Council, but 'twas not followed. God amend these [beginnings] of evil. I came home ill."

This entry is of importance as showing that the resolution was carried through against the opinion of the majority of the Council, and that it was practically a cut and dried scheme of a small clique immediately round the King.

It thus gives the lie direct to the bold statement which Arlington made before the House of Commons when he was questioned there as to this transaction (15 Jan, 1673–4). Being asked by the Speaker, " The shutting up of the Exchequer, who advised it? Answer. Knew not who directed it. All concurred in it." (S.P. Dom., Car. II. 360, No. 40.)

In the Register of the Privy Council there is no entry of this resolution under the date of 2 Jan., 1671–2.

In place of it the following entry occurs.
"The Navy Commissioners to prepare an estimate of the charge of setting out the fleet this summer, His Majesty declaring his intention to have 50 ships of war, 15 fire ships, 2 hospital ships, 20 ketches, and 20 victualling ships with 23,000 men for eight months."

This entry is followed by a blank against which is written in the margin: "His Majesty's declaration for putting a stop of payment of moneys out of the Exchequer for one whole year. Vide this entered the 5th day."

Accordingly under date 5 Jan., 1671–2, the following entry occurs in the Register (X. 144.)

5 January, 1671–2.

The King.
Duke of York.
Lord Keeper.
Duke of Ormonde.
Earl of Ossory.
Earl of Bridgewater.
Earl of Sandwich.
Earl of Bath.
Earl of Carlisle.
Earl of Craven.
Earl of Lauderdale.
Lord Arlington.
Lord Ashley.
Mr. Treasurer.
Mr. Vice-Chamberlain.
Sec.
Chancellor of Duchy.
Sir J. Duncombe.
Master of Ordnance.
Mr. Montagu.

His Majesty having this day ordered the lords and others of his Privy Council to attend him in Council is pleased to declare that seeing all the princes and states his neighbours were making great preparations for war both by sea and land, His Majesty, for the safety of his Government and people, looked upon himself as obliged to make such preparations as might be proportionable for the protection both of the one and the other, and to that end he has already given orders for the fitting and preparing a very considerable fleet to be ready against the spring.

By this inevitable necessity His Majesty considering the great charges that must attend such preparations and after his serious debates and best considerations not finding any possibility to defray such unusual expenses by the usual ways and means of borrowing moneys by reason his revenues were so anticipated and engaged he was necessitated contrary to his own inclinations upon these emergencies and for the public safety at the present to cause a stop to be made of the payment of any moneys now being or to be brought into his exchequer for the space of one whole year ending the last day of December next unto any person or persons whatsoever by virtue of any warrant, securities or orders, whether registered or not registered therein and payable within that time excepting only such payments as shall grow due upon orders on the subsidy according to the Act of Parliament and orders and securities upon the fee farm rents both which are to be proceeded upon as if this stop had never been made.

And that his Majesty's pleasure and declaration may be speedily and effectually putt in execution His Majesty doth order and doth hereby require and command Sir Heneage Finch. Knt. and Bart., his Attorney General, forthwith to prepare a bill for his royal signature and so to pass the great seal thereby requiring and commanding the Lords Commissioners of the Treasury immediately to order and direct all and every the officers of His Majesty's Exchequer to postpone all warrants and orders whether registered or not registered and other securities and payments whatsoever (except before excepted) until the last day of December next.

And in the meantime the Lords Commissioners of his Treasury to be required and authorized to cause payment to be made of the interest that is or shall grow due at the rate of 6 per cent. unto every person that shall have money due to him or them upon such warrants, orders or securities so postponed and deferred and that the payment of such interest may be justly made the Lords Commissioners of his Treasury are to be authorised and required to cause the debt of every particular person and the interest thereof to be truly stated.

And the Lords of his Majesty's Treasury are further to be ordered and required to employ and dispose of all the said moneys, so stopped and detayned, for the preparing, setting forth and payment of His Majesty's fleet and other public services, in order to the preservation and safety of His Majesty's Government and defence of his people as His Majesty shall from time to time order and direct.

And His Majesty as far as in him lyes to take away all apprehensions or terror that might possess any of his subjects' spirits doth declare that no person whatsoever shall be defrauded of anything that is justly due to him nor shall this restraint which His Majesty has been compelled (not being able for the present to find any other expedient) to lay upon such moneys as are or shall be paid into his exchequer continue longer than the aforesaid last day of December, and that then no new warrants, orders or securities shall intervene and break the course of such payments.

And His Majesty is graciously pleased further to declare that nothing could have urged His Majesty to an act of this nature but such a conjuncture of affairs when all the neighbouring princes and states were making such threatening preparations that his government could not be safe without appearing in the same posture.

The natural accompaniment to this declaration appeared 5 days later when the Council adopted an order for passing a privy seal for 748, 015l. for equipping and setting out the fleet. (10 Jan., 1671–2, Council Register, X. 146.) On the same day the Attorney-General was ordered to insert in the bill for stopping payments out of the Exchequer the following clause, " Except such respective warrants and orders as have been drawn and made by direction of you, the Commissioners of our Treasury, and are now remaining in the Receipt of our Exchequer, which are registered or not registered, and not assigned for payments to be made to the Treasurer of our Navy or Victualler thereof, for our Guards and Garrisons, Tangier, office of our Ordnance and Cofferer of our house." Seven days later (17 Jan.) the declaration had assumed the form in which it is calendared in the present volume, and is entered at length in that form in the Council Register X 151–3.

Beyond the above bald entries of proceedings the Privy Council Register throws no light whatever on the genesis and authorship of the scheme Neither names nor debates nor votes are ever entered in this record, a method of secrecy which has always characterised the proceedings of that body, and which still characterises the proceedings of its lineal descendent of to-day— the Cabinet.

Where the Register of the Privy Council is silent on this question of the authorship of the stop, it is not to be expected that a mere dry administrative record like that of the present calendar should yield any information.

In touching on the remaining question of the relation between this episode and the foreign policy of Charles one is treading on even more uncertain and dangerous ground. Did Charles sell himself to France for so much money, and was England dragged in the wake of France simply because Charles was momentarily bankrupt?

To clear the ground let us see what and how much it was that Charles realised from his deal with Louis XIV.

Account of William Chiffinch of moneys received of the Ministers (Agents) of Louis XIV. of France pursuant to a treaty then formerly made or some other agreement between the King and the said French King: between 18 Feb., 1670–1, and 13 Nov., 1677.

To the above account is to be added the following account, which represents the proceeds of a particular and separate sum of French money received through another channel and separately accounted by reason of its having been taken to the mint and there coined into English moneys.

Account of Thomas Holden for moneys by him received of Sir Thomas Bond in French coin by warrant of the Treasury Lords of date 2 Feb., 1671–2, and brought into the mint.

The accomptant also charges himself with another sum of silver and gold bullion coined, amounting to 11,029l. 13s. 1d., but this comes from a Dutch prize, and is therefore a different matter completely.

Of these sums the accomptant discharges himself by payments made as follows:—

The remaining discharge items concern the Dutch prize money item.

According to the above two accounts Charles received from Louis XIV. in the six years 1672–7

Such a statement disposes for good and for all of any idea that Charles intended by the Treaty of Dover to make himself independent of his own parliament. With a debt upon him of over two millions, and an annual deficit of 400,000l. on his ordinary peace establishment how could Charles ever dream of making himself independent of parliament by means of a foreign subsidy which only produced him 125,000l. a year? Much less still, how could he ever expect to rush headlong into a foreign war, the cost of which would be millions? Besides, Charles's conduct proves the contrary. For besides asking and obtaining Parliamentary aid towards the cost of the second Dutch war, he consistently and unwaveringly expressed the hope (a vain hope it is true) that Parliament would give him supply to meet the bankers' debt also, and he knew his Parliament too well ever to expect that it would give him a penny of supply until he had pacified its ever jealous anti-Catholic feeling.

If, therefore, Charles could never have been such a madman as to dream of becoming independent of parliament what becomes of the secret clauses of the Treaty of Dover, in particular the clause relating to the Catholic Religion? The answer can only be that that clause was a subterfuge on Charles's part from beginning to end; never taken seriously by him, and never intended to be executed by him, and that he accepted that clause of the treaty simply as an inducement to Louis (who probably wanted the clause as a reed whereby to pierce Charles's hand later) to conclude a tediously drawn out negotiation, on which Charles's heart had been set for years. Such is my deliberate opinion. Whatever disgrace there was attaching to the mere acceptance of Louis's subsidy as a subsidy must attach not to Charles, who was manfully striving all along to pay the nation's way out of a straitened purse, but to the Parliament, which, partly in ignorance and partly in callous factiousness, was starving the administration.

For the rest it was a mere matter of elemental necessity that whenever and as soon as Charles declared war against the Dutch the stop of the exchequer would inevitably and instantly ensue. If he had declared war, as he wished, in 1670 or 1671, the stop would have occurred then. On the very day in which he did decide upon the stop (supra, pp. lx, lxiii) he ordered an expenditure of three quarters of a million on the navy. Cause and effect; antecedent and consequent.

A word in conclusion as to the condition of the Treasury records calendared in the present volume. The Treasury Order Book ceases to exist after the stop, as the bankruptcy put an end to the system of fiduciary paper orders. The General Letter Book is missing for the period July—Oct., 1671, and the Minute Book is missing from Aug., 1670, to Oct., 1671. All attempts to locate these missing volumes have hitherto been fruitless. It would appear that when Downing ceased to act as Secretary to the Treasury he took away with him these volumes, though there is evidence (see p. 1091 infra) that the Minute Book subsequently came back to the Treasury. From the date when (in Oct., 1671) Sir R. Howard succeeded Downing as Secretary to the Treasury the method and order which had previously characterised these records disappear. Sir R. Howard was not to be compared with Downing as an official. His letters are confusedly expressed and his book-keeping was unmethodical and slovenly. (See p. 939 infra.)

Wm. A. Shaw.
May, 1908.