Part VI
Newton and the Counterfeiter
19. "To Accuse and Vilify the Mint"
FREE CHALONER MIGHT have been, but he was a deeply worried man. By December 1697, he was virtually destitute. Keeping up the appearance of respectability before Parliament had left him short of cash. Pile on a seven-week stay in Newgate, and the cupboard was bare.
With winter approaching, trying to live on what his jailers had left him goaded Chaloner to the point of recklessness. Had not an English judge refused even to present the trumped-up case against him to an English jury? Had he not suffered the shackles, the squalor, the naked corruption of Newgate? Should not someone compensate this guiltless man for all the wrongs done to him?
On February 19, 1698, Chaloner laid his portrait of abused virtue before Parliament in a document he also had printed for public distribution. "Your Petitioner," he wrote, "did in the last sessions of Parliamt discover several abuses committed in the Mint." And what was his reward for such service to the Crown? "Some of the Mint threatned by some means to prosecute him & take away his life before the next sessions of Parliament." His accusers had gone so far as to conspire with the worst kind of scum to suborn the crime that would bring him to his death: "some of the Mint have imployed & given Privilege to several persons to coyn false money ... all of which was done with an intent to draw him [Chaloner] into coyning to take his life away."
This attempt at judicial murder failed, defeated by Chaloner's determined virtue: he was concerned only "to find out the Treasons & Conspiracies against the King & Kingdome" and then "this year writing a book of the present state of the Mint & the defects thereof ... wch he hoped would have been of service to the Publick." That the Mint would not abide, of course, and so, Chaloner charged, "they committed him to Prison & so prevented him from doing it."
The miseries of the cells had brought him "great sufferings & ruined condition," and left him "incapable of providing himself & family." There must be someone to make him whole, or as Chaloner humbly put it, should give him "such redress as shall seem best in your Honours great Wisdom & Justice."
There could be no doubt whom Chaloner really meant by that careful phrase "some of the Mint." Isaac Newton was the only man who had both means and motive to use the power of the state to kill a man for private revenge. Newton himself certainly understood. He copied out Chaloner's petition in his own hand, and four versions of his reply survive in his papers. Bitter anger runs through all of them, along with a healthy dose of disdain: "If he would be let the money & Government alone & return to his trade of Jappaning," Newton wrote in his first attempt at an answer, "he is not so far ruined but that he may still live as well as he did seven years ago when he left of that trade & raised himself by coyning."
Yet an odd, pleading tone also pervades each of the drafts. The problem was that Chaloner was telling the truth, more or less. Witnesses had failed to appear. No link had been shown between the coining den in Egham and Chaloner himself. The case—as Newton had feared—was laughably weak. His complaint that Chaloner had "laboured to accuse and vilify the Mint" looked like confirmation that Chaloner's arrest was ordered out of injured pride. His declaration that there were "divers witnesses that Mr Chaloner last spring & Summer was forward to Coyn" was true but beside the point, given that none of those witnesses proved willing to show up in open court. And when he complained without proof that the defendant was guilty of the kind of witness tampering that "gravells prosecutions & renders it dangerous for any man to prosecute," he simply sounded weak in the face of an opponent who had bested him.
It got worse. Newton added: "I do not know or beleive that any privilege or direction was given by any of the Mint to draw him or his confederates in." That phrasing sounds just a bit too careful a dodge—and it was, for of course it was Newton himself who had given John Peers money and sent him off to infiltrate the Egham gang—even bailing Peers out of Newgate to do so. Here he seemed to be looking for plausible deniability if Peers or any of his other agents should turn up to confirm Chaloner's tale.
Chaloner's petition sparked yet another official investigation, and for the moment roles were reversed: Isaac Newton was standing in the dock, defending himself against the charge of framing an innocent man. A panel of senior government figures was assembled to look into the matter, and though the group was stacked with Newton's friends—Charles Montague and such reliable allies as Lowndes and James Vernon, then serving as Secretary of State—initially the evidence heard by the group, including Chaloner's own testimony, tended to favor Chaloner's claim. The panel persisted, however, and as other witnesses testified, more and more gaps turned up in the plaintiff's story. In the end, the investigators produced a report that dismissed Chaloner's claims—but quickly, in a bald rejection that did not satisfy Newton's hunger for a full exoneration.
But if Newton felt aggrieved at this perceived slight—the more so, perhaps, for having been so nearly caught out—he knew who had truly caused him such vexation. He was certain that Chaloner had committed crimes against the King, and that was bad enough. And now he had formed "a confederacy against the Warden."
This was new: Chaloner had been just one more anonymous offender, against whom equally interchangeable officials would take the steps needed to cut short a criminal career. But no longer. This one criminal had targeted a single, specific officer, the Warden. Alone of all those he sent to Newgate and the gallows in his years as the coiners' scourge, the Warden of the Mint did William Chaloner the honor of treating him as an individual antagonist—someone not merely to be stopped, but crushed.
The ruthlessness to come in the pursuit of Chaloner had deeper roots than mere anger over the humiliation of having to defend himself in public. Newton had already proved willing to pursue ends over means when he acquiesced in the Lords Justices' suggestion to so prejudice the jury as to extract a felony conviction for misdemeanor offenses. But the ferocity he showed through the next phase of his campaign against Chaloner suggests that there may have been more than mere raisons d'état driving him. Chaloner could not have known that there was a hidden thrust concealed within his challenge to the Warden, one that touched Newton's most private faith.
Faith indeed, for any counterfeit had religious significance. The magic that transformed a disc of metal into legal tender came from the image of the King's head on the face of a coin. The King ruled by the grace of God. To steal that likeness was an act of lèse majesté, an offense against the sacred person of the monarch. Coining was a capital crime because of the danger it presented to the state; it ascended to the odium of treason because of its insult to the Crown.
But while that was true for any counterfeiter, Chaloner had mocked not just King William III but also Isaac Newton, and on very specific ground. By 1698, Newton was no longer a practicing alchemist. Still, Chaloner's counterfeiting was, in effect, a blasphemous parody of the alchemist's dream to multiply gold without limit—the equivalent of a black mass, in which a toad or turnip takes the place of the consecrated Host. The same would have held true for any forger, of course. Yet none but Chaloner ever set himself up as a direct rival to Newton's mastery over metal.
Did that trespass matter? Did Newton pursue Chaloner more intensely than he would have absent his own alchemical history? It is impossible to know. Clearly, Newton's motives for hounding his quarry were overdetermined: duty and personal offense as well as any secret defense of faith all fed into the mix.
It is important to remember, however, that while many of his biographers have drawn portraits of a swarm of different Newtons—the magician, the mathematician, the experimental genius, the young Newton as a cloistered professor, the older man in charge of the Royal Society, conducting the running war with intellectual enemies on the Continent—the real Isaac Newton was one man living one life, whose parts as he lived them were thoroughly conformable to the whole. Within each role, every job he did, each problem he set himself, that one Newton remained—and the constant theme of th
at singular life was his hunger for contact with the Godhead.
That same man understood the disquieting fact that the new science, in the wrong hands, had the potential not to prepare men for "beliefe in the Deity," but to undermine their faith. Into that knowledge enter Chaloner, whose every action reeks of a kind of practical atheism: what need for God to act in the world when a smooth enough operator can produce passable imitations of His works?
Whatever its precise root, the fact is that following Chaloner's release in February, Newton's anger was never more intense. From that moment, the Warden of the Mint pursued single-mindedly and relentlessly the man who had managed to offend him in every conceivable way.
20. "At This Rate the Nation May Be Imposed Upon"
FOR ALL OF Newton's secret rage, William Chaloner had more pressing problems—or he thought he did—in the spring of 1698. He remained very poor—perhaps the one wholly true statement in his last petition to Parliament. It had been more than a year since any of his schemes had produced a real return. The gang he had assembled the previous summer had been broken up, its members jailed or fled. His parliamentary allies had failed him; whatever else had happened, he recognized that the faction supporting the existing administration of the Mint—Newton—had prevailed over those who had backed him as part of their campaign to return to power.
Compounding his difficulties, even counterfeiters need money to make money, and Chaloner had no capital left. In June he set out to lever himself out of his predicament, starting by making a few crude shillings—enough, perhaps, to fund more ambitious plans. The whole mean affair revealed just how far Chaloner had tumbled down the criminal ladder. The Knightsbridge house was long gone, and he now lived in a rented room over the Golden Lyon on Great Wild Street, near Covent Garden. No longer able to keep physical distance between himself and his coining operation, he did what he could over the fire in his own grate. A witness reported that he watched Chaloner "bring out of his Clossett 2 pieces of white earth like Tobacco pipe Clay of the consistence of Dough or paste." Chaloner had stuck a shilling coin between the two pieces of raw clay, and "pulling them asunder he took out the Shilling and laid the pieces of earth to dry by a fire and ... at last upon the fire to dry and bake them throughly and after they were could [cold] they rung like burnt earthen ware."
This was almost literally child's play, the kind of slipshod work that routinely doomed amateurs making their first attempts. Chaloner knew better, of course, but he simply could not afford the fine craftsmanship that he had previously used to keep himself out of trouble. Instead, he persuaded his old partner Thomas Carter to give him three shillings, and then "meltd them down with some pewter and Spelter in an Iron Ladle and cast abot. ½ a Score Shillings in the earthen mould." It was a tedious exercise: "he cast but one at a time and as often as he cast a bad one he threw it back into the Iron Ladle." This was no way to get rich.
Even at this low ebb, Chaloner did not try to pass his crude fakes himself. But Carter would not take them either, "being afraid to have them abot. him." The next day, Chaloner tried them out on a metal dealer, John Abbot, who had not been above selling Chaloner silver and gold in better days, but the new fakes did not pass muster with him either, because "they were so light." A week went by, and Carter finally agreed to see what he could do. He sent his maid, Mary Ball, to pick up half a dozen samples. Chaloner handed them over, telling Ball that if Carter "did not like them he would do some better." Then, as quickly as he could, he turned to a new and much more profitable opportunity.
This time it was King William's seemingly endless war that gave him his opening. The cost of the war, combined with the shortfall in tax takings created by the coinage mess, had forced the government to experiment with almost any gimmick that anyone could invent to raise funds. With sixty thousand or so soldiers tramping through Flanders, neither the Bank of England's notes and checks nor the early form of government debt called Exchequer bills raised sufficient funds. To fill the gap, clever men cast about for ever more exotic financial ideas. Of them all, perhaps none was as strange as the Malt Lottery scheme.
The Malt Lottery was actually the sequel to an earlier attempt to play on the English love of a flutter, a scheme put together three years earlier by someone who understood the get-rich-quick impulse all too well: the Master of the Mint, Thomas Neale. In 1694, Neale's "Million Adventure" had offered 100,000 tickets priced at ten pounds, each with a twenty-to-one shot at prizes that ranged from ten to one thousand pounds. Even better, each ticket carried with it a sweet interest payment: one pound a year through 1710, for a guaranteed minimum return on the "Adventure" of sixteen pounds.
Neale did well for himself on the deal. He kept ten percent of the proceeds, a fairly modest cut by the standards of the day. (Promoters of a similar lottery in Venice skimmed one-third of the receipts off the top.) He knew his customers too. He kept the price of tickets low to attract "many Thousands who only have small sums and cannot now bring them into the Publick, to engage themselves in this Fund." In fact, while at ten pounds apiece whole tickets were still too pricey for most, they were just cheap enough for speculators to buy and syndicate, selling shares in tickets to the kind of democratized financial customer Neale had in mind.
It all worked, for a while. The Adventure sold out to a much wider range of people than had ever before voluntarily lent their money to the state—tens of thousands of individual investors, according to some estimates. The diarist Narcissus Luttrell recorded that a stonecutter named Mr. Gibbs and his three partners took home one of the five-hundred-pound prizes, and a Mr. Proctor and a Mr. Skinner, a stationer and a hosier, respectively, won another. These were hardly the usual sort of people involved in high finance, but here they were, new men and women seeking, and occasionally finding, wealth in these strange new forms of money. The Adventure pushed further into unknown territory after the prizes were distributed shortly after the initial sale of the tickets, with the emergence of an informal bond market. Traders who had waited until the lottery prizes had been distributed bought tickets below par—paying as little as seven pounds, or seventy percent of face value—to secure the best possible return on their capital.
It all ended in tears, though. The government had got its sums wrong. The Adventure tickets carried an impressive rate of return, over and above the prizes paid out to the lottery winners. Unsurprisingly, the cash-poor Treasury had trouble meeting its payments. The first signs of a shortfall came as early as 1695, less than a year into the putative sixteen-year life of the ticket-bonds, and by 1697, the fund that was supposed to pay off the notes was running almost a quarter of a million pounds behind its obligations. Angry ticket holders petitioned Parliament, demanding that the government defend the "Credit and Honour of the Nation," but there simply was not enough money on hand to resume payments until peace finally came in 1698.
Before that, as the war ground on, King William's army needed yet more money. It made sense—at least to Neale—to try another lottery. To deal with any lingering unpleasantness over the default on the Million Adventure, Neale tied this new lottery to the excise tax on malt (in effect, a tax on beer). The Malt Lottery opened for business on April 14, 1697. The Treasury issued 140,000 tickets, with a face value of ten pounds each, to be sold to the public. Those tickets, which were supposed to bring in 1.4 million pounds, were chimeras: part bond, part bet, part paper money. The lottery promised cash prizes and an ongoing stream of interest, just like the earlier venture, but the new tickets were not merely bonds, to be bought and sold like any other investment. They were actual bills of exchange, cash, legal tender from the moment they hit the London streets.
At least that's how it was supposed to work. Neale apparently believed that the thrill of the game, combined with the fact that these new tickets could pass for cash, would overcome the public's lack of faith in their ever more indebted government. The Chancellor of the Exchequer, Newton's old patron Montague, had his doubts, complaining that "nobody does or will understand
the Lottery Tickets and the Merchants will not meddle with them." Montague was right. No one trusted the strange new paper, and in the end, just 1,763 tickets found their way into the hands of the public.
Nonetheless, the government desperately needed the money the lottery was meant to raise. So the Treasury simply treated the remaining 138,237 tickets as ten-pound notes—cash held by the government, to be paid out to anyone who could be forced to accept them. Astonishingly, it worked—sort of. In accounts for 1698, the Royal Navy reported that it held almost forty-five thousand pounds' worth of Malt Lottery tickets to cover the pay due to sailors and marines—exactly the kind of captive creditors who did not have a lot of choice in the matter.
So it happened that, without admitting it, the Treasury invented a parallel English currency to the bits of metal still passing from hand to hand. This new paper was not the equivalent of true fiat currency. The fact that the issue was tied to a specific asset, the revenue stream from the tax on malt, gave it a hybrid character as both cash and secured debt. But if it was not quite the same as modern paper notes, it was still radically unlike anything Englishmen had ever known as money.
That was as far as it went for the time being; lotteries did not play a significant role in government finance in the years after the failure of the Malt issue. But it had become obvious not just to the King's bankers, but to almost everyone—stonecutters, maids, hosiers—that the nation's financial system had not kept up with what was actually happening in England's economy. Chaloner grasped much more quickly than most that hard cash—the material reality of silver and gold—was no longer the only, or even the most important, form that money could take.
Newton and the Counterfeiter: The Unknown Detective Career of the World's Greatest Scientist Page 18