by Ian Mortimer
If you cross the border into Scotland, you are in for a shock. All the prices will sound outrageously expensive to you. This is because the Scottish pound is valued at one-twelfth of an English one. So when a Scotsman asks 60 shillings for a pair of woollen stockings – and there you are thinking he wants £3 sterling – he is actually demanding the equivalent of an English crown, 5s. The easiest way to bear in mind the difference is to remember that a Scottish shilling has the same value as an English penny. Old coins continue in circulation, but in Charles II’s reign you have the following Scottish denominations freshly milled in silver: a merk (worth 13s 4d in Scottish shillings, or 13⅓d in English money), and four-merk, half-merk and quarter-merk pieces. The Scottish moneyers also turn out copper sixpences and tuppences (equating to ½d and ⅙d in English currency). In James II’s reign, only 10s coins are minted (English 10d). In the reign of William and Mary, more silver coins appear – 60s, 40s, 20s, 10s and 5s – but no gold coins are produced in Scotland. Foreign gold coins are accepted for their bullion value, particularly the Venetian ducat, the French louis d’or and, dare it be said, the English guinea.
Despite all the hard work improving the coinage in the 1660s and 1670s, by the mid-1690s England is once more undergoing a crisis. Coin clippers have practically devoured the currency, damaging not only the coins themselves but also trust in their value. Some have been trimmed to little more than half their original size: when you now go into a shop and pay with silver, it is likely that the shop attendant will weigh your money.52 Part of the problem is that the silver is worth more than the face value of the currency: goldsmiths and bankers take in coins and melt them down, and make more in selling the metal than the coins were worth. Evelyn records on 11 May 1696 that there is ‘want of current money to carry on the smallest concerns, even for daily provisions in the markets … causing such a scarcity that every day tumults are feared’.53 The same month a riot almost breaks out in Derbyshire when, to their horror, a group of miners see their heavily clipped wages refused by the local tradesmen.54 The difficulties of financing the war with France add to the problem: if the army cannot be paid, who knows what might happen. So the government calls in its team of advisors, which includes a certain professor of mathematics called Isaac Newton. He suggests a complete recoinage – and thereby lands himself a job. Over the next two and a half years, under Newton’s watchful eye, the Royal Mint produces new coins to the value of £6.8 million: more than twice the value it has minted in the previous three decades.55 If you put your hand in your pocket in 1700 and look at your change, you will see a fine array of milled coins that, in respect of the silver and copper, will closely resemble their successors in the early twentieth century. And if you meet Isaac Newton in person, you will observe that he is now a very rich man.
Impressive though the changes in the coinage undoubtedly are, the real revolutions in money are to be found elsewhere – in the flexibility of finance and in attitudes to borrowing. Cast your mind back to all those exceptionally rich men mentioned in chapter 3, with fortunes of £100,000 or more. Their wealth is principally built on lending money. Merchants are becoming businessmen, and goldsmiths are becoming bankers. The cities of London, Edinburgh and Glasgow in particular are seeing the professionalisation of providing finance. Partnerships and companies are being established to fund entrepreneurs, pay interest on deposits and deal in government bonds. Edward Backwell, Francis Child, John Freame, Thomas Gould and Richard Hoare all serve apprenticeships as members of the Goldsmiths’ Company in London but none of them goes on to become a craftsman. They all become bankers, with ledgers full of clients’ details concerning loans and agreements. Edward Backwell has a thousand customers with a total of £500,000 on deposit with him in September 1664.56 Francis Child establishes Child’s Bank. Richard Hoare starts the bank bearing his name that his descendants will own for centuries to come. The partnership of Freame & Gould will later become better known as Barclays Bank. Coutts Bank is also founded in this period, by John Campbell in 1692. If you want to look for any other bankers, forty-four partnerships and companies are listed in A Collection of the Names of the Merchants Living in and about the City of London (1677), the world’s first trade directory, where they appear as ‘goldsmiths who keep running cashes’. Two scriveners, Robert Clayton and John Morris, start up an innovative bank that caters to landowners: in the 1660s they have deposits of about £1.5 million on their books. Over the course of the Restoration period the world of finance shifts from personal borrowing to multimillion-pound banking.
Alongside the establishment of banks, a whole new approach to financial services develops. People start writing cheques. The earliest known example dates from February 1660: it has all the major features of a modern cheque, namely a request to a bank (Clayton & Morris) to pay the named bearer a specified sum, this sum being written in words as well as in figures, together with the date and the account holder’s signature.57 Bills of Exchange continue to be used for overseas transfers. When gentlemen send their sons abroad on the Grand Tour, they are not so foolish as to stuff their pockets with gold; instead they periodically send them Bills of Exchange for £100 or £200, which they can cash at bankers in major cities.58 The new service of buildings insurance takes off, as mentioned in chapter 1. In the 1680s, Edward Lloyd opens a coffee house in London where the underwriters of shipping insurance meet; by January 1692 he is publishing a weekly professional news-sheet entitled Ships Arrived at, and Departed from several Ports of England – the forerunner of Lloyd’s List. In 1698, at another coffee house near the Royal Exchange, John Castaing starts to publish a twice-weekly newsletter called The Course of the Exchange, which gives prices for traded stocks – the forerunner of the modern stock market. With the number of joint-stock companies in London increasing from 15 to 140 in just five years (1690–95), you can see why such a list is needed.59
On top of all these changes, the government’s attitude to trade and finance undergoes a series of important developments. From 1660 it is advised by a Committee on the Plantations and a Committee on Trade. Over the next three decades these committees collect data regarding Britain’s overseas financial interests until they are reconstituted as the Board of Trade in 1696. In 1696, too, the Chancellor of the Exchequer presents the first Budget to Parliament.60 These important reforms follow shortly after the establishment of the Bank of England in 1694. As the war with France costs the government more than £5 million per year, it becomes imperative to get the nation’s finances on a sound footing. The Bank of England successfully attracts investors. The idea is for the government to charge extra duties for four years on certain imports in order to pay 8 per cent interest on an advance of £1.2 million by the bank’s subscribers. This it does but, having advanced all its capital, the bank has no means to pay those who wish to withdraw their cash. As a result, it starts issuing promissory notes, which can be drawn on the bank or transferred to other people. Herein lie the origins of England’s banknotes. You will see them with the familiar ‘I promise to pay …’ but in strange denominations, such as ‘I promise to pay [name of original depositor] or Bearer on demand the Sum of Five Hundred and Fifty-Five pounds’. The reason is that early notes relate to the actual sum originally deposited or withdrawn. In 1695 the Bank of Scotland is established, and it too starts issuing banknotes.
Private banks, milled coins, cheques, banknotes, insurance, bonds, the Bank of England, Lloyd’s of London and the stock market – it all seems a world away from the hammered coins of 1660. And, as if to cap it all, there’s one further icon of modern finance that develops at this time. Charles’s government never properly recovers from its over-expenditure in the 1660s. The debt remains on the books for evermore – and thus it is from this period that we date our National Debt.
Taxes and Lotteries
As the old saying goes, nothing is certain but death and taxes – although the rich in all ages like to think that at least one of the two is open to negotiation.61 The good news for you
is that no Restoration Parliament would dream of taxing you as heavily as you are taxed in the modern world. There is no Value Added Tax on purchasable items. There is no income tax on what you earn. There is no inheritance tax. Instead there is a range of minor taxes which, more or less, are means-tested. Some may seem a little bizarre to you, or even silly – until, that is, you have to pay them.
A substantial revenue stream for the king is the customs paid on goods that are imported and exported and duties on other specific items. The list of these, as agreed by Parliament in 1660, is extraordinarily extensive and detailed. Take pans, for instance: if they are frying pans or dripping pans, the importer has to pay a duty of £3 per hundredweight (112lbs avoirdupois); if they are warming pans, they are charged at £4 per dozen. There are forty-four rates for different sorts of linen cloth, twenty-three rates for silk and nine for the various types of lace. There are ten rates for different patterns of knife, some charged by the dicker (10 knives), some by the dozen and some by the gross (a dozen dozen, 144). The high levels of duty on many items mean that imported goods are luxury items, beyond the reach of most ordinary people. But with regard to alcohol, everyone is liable to pay a rate of duty. For every barrel of ale or beer sold at 6s or more, the brewer has to pay 15d. There is a 1d duty on every gallon of spirits, and the duties on imported beer and wine are heavy: for example, £4 10s on every tun of wine (252 gallons) imported to London from Bordeaux.62
The traditional form of extra taxation is the subsidy: a levy on income from land at 4s per pound, or on the value of goods at 2s 8d per pound. The thresholds for this are quite high, so it really only affects the rich. But more than a few manage to avoid it. The king is astonished that individuals with an income of £3,000 a year can get away with paying just £16 tax. The reason – you will be shocked to hear – is that they lie about their incomes. Some people in Bristol assess themselves at 1 per cent of their real wealth, so after 1663 this tax is rarely levied.63 By then Charles II’s government has introduced the poll tax, a charge levied on everyone according to his or her status. Ordinary people over the age of sixteen pay 6d per head if they are married and 12d if they are single. Lords pay according to their rank: for example, dukes pay £100, earls £60, barons £40 and knights £20. Gentlemen pay £5 if they do not have a coat of arms, £10 if they do. Poll taxes are levied seven times between 1660 and 1697, before being abandoned as inefficient. In the intervening years other taxes are deployed. The most unusual is the ‘Free and Voluntary Present’ to the king – a voluntary tax in which you can give the government whatever you want, up to a maximum of £200 (or £400 if you are a lord). You might think that the whole idea is madness – I mean, who would? – but it yields more than £229,000.64
The hearth tax is levied in England from 1662 to 1689. Every householder is liable to pay 1s, twice a year, for every fireplace in his or her house. The idea is that the rich pay more, because their houses have more fireplaces. That is all very well in theory, but a problem arises in that a surveyor has to enter every house to count the number of hearths. If there is a chimney, does it serve just the one hearth on the ground floor or is there a hearth on the upper floor as well? It is easier to count the windows of a property, because you can see them from outside. Consequently the government institutes a window tax in 1696: owners of houses with ten windows or fewer pay a tax of 2s, but owners with more than ten windows pay 10s. More bizarre even than taxing windows is the marriage tax, levied from 1695. Ordinary people have to pay 2s to register a baptism, 2s 6d for a marriage and 4s for a burial. Noblemen and the rich pay more: a duke or an archbishop must pay £50 4s to be buried; a gentleman must pay £1 4s to bury his wife or one of his children. The new land tax that is introduced in 1692 is much more sensible: landowners pay £2 for every £100 of income from land. Simple and proportionate.
Taxes are not the only way by which the government extracts money from your purse. The other is the lottery. The first successful enterprise is the Royal Oak, a monopoly that proves so popular that by 1688 its commissioners are willing to pay the Crown £4,200 per year to run it. The monopoly is challenged in 1693 by a government official, Thomas Neale, who sets up the Million Adventure the following year. The idea is to raise £1 million for public funds by selling 100,000 tickets at £10 each. The first prize is £1,000 per year for sixteen years; there are nine prizes of £500 per year; the lowest of the 2,500 prizes is £10 per year. The clever part is that even tickets that do not win earn £1 per year interest for sixteen years, so everyone who subscribes wins. It opens the flood-gates. Dozens of lotteries start up in the mid-1690s, with names such as Good Luck to the Fortunate, the Unparallel’d Adventure, the Ladies Invention and the Honest Proposal. The popularity increases as they become more affordable. In the years 1694–6 most of them require a stake of £1; in 1696–7 the amount required tumbles to mere pennies. The lowest is just one penny – for the Wheel of Fortune in 1698 – which promises to pay £1,000 to one of its 1.65 million ticket-holders. These private lotteries undercut the government’s second venture into the business, the Malt Lottery in 1697, which raises just £17,000. Accordingly Parliament puts a stop to all lotteries in 1699; only the Royal Oak Lottery and the Charitable Adventure for the Benefit of Greenwich Hospital are allowed to continue.65
There is one other ‘lottery’ that continues after 1699: the tontine, a scheme whereby greater benefits accrue to those who live longest.In 1693 the Chancellor of the Exchequer starts to sell annuities on this basis, in order to raise £1 million. If you buy a £100 share, you’ll receive 10 per cent interest until 1700 and thereafter a 14 per cent annuity. However, if other investors predecease you, then their benefits come to you too. You could call it the ultimate lottery – the lottery of life. The last beneficiary will not die until 1783, by which time he has an annual income of more than £1,000.66
Shopping
In the modern world you go shopping; in Restoration Britain, frequently the shopping comes to you. In Doncaster, where they make high-quality woollen stockings of various colours, the women ‘go with bundles of the stockings on their arms from inn to inn where travellers are, that you can hardly evade laying out money with them, for they will follow you up into your chamber and will not be denied without a great deal of trouble’.67 In most towns you have much the same attention from pedlars, hawkers and petty chapmen. Small hardware items such as mops, mats, baskets, brooms, penknives, quills, combs, inkhorns, bootlaces, playing cards, newspapers and printed broadsides are hawked from door to door, as are services such as sweeping chimneys, repairing chairs, mending pots and pans and sharpening knives and scissors. Water carriers will bring water to your house for a penny. Women parade the streets with enormous baskets balanced on their heads, selling fish, vegetables, herbs and fruit.
If the hawkers can’t persuade you to buy, then it is to the shops or the market that you must go, depending on what you require. Broadly speaking, you go to a market for food; for anything high in value, you go to a shop. The most important exception to this rule is bread: loaves are occasionally sold in markets but it is more usual to buy direct from the bakery.
The marketplaces themselves are open areas in the middle of towns, where temporary wooden stalls are set up for the day. Trading begins very early: the stall keepers tend to set up before daylight, around 3 a.m. in summer or 5 4 a.m. in winter. In most towns there is just the one marketplace but in a large settlement there may be several. York has two main markets: Thursday Market, for poultry, meat, dairy produce, oatmeal, salt, herbs, vegetables, wildfowl and rabbits, as well as candles, hemp and coarse cloth; and Pavement Market, for poultry, vegetables, wildfowl, rabbits, roasting pigs, eggs, corn, sieves, baskets, woodenware, shoes and leather goods. In addition there are specialist markets for malt, butter, hay, wool, leather, fish and cattle.68 Norwich is unusual in being a large city with just the one marketplace where everything is sold. Prices tend to be steady or slightly in decline in the 1670s and 1680s – they don’t start to rise until th
e 1690s – but in times of dearth the cost of basic foodstuffs can double.69 Be prepared to haggle. Although traders will be reluctant to compromise on price early in the morning, as the day wears on they may well do so, especially for perishables. Take a basket with you, as no one will give you any packaging with your goods. Most housewives drape a cloth over the top of their basket to protect the contents from flies, dust and all the other infelicities of a crowded space. Others take napkins or similar cloths to wrap around their cheese and fish, so that they do not taint the other purchases. An earthenware pot is a good idea if you plan to buy butter on a warm day; the vendors will bring it to market in a small wooden barrel and will scoop it out to weigh it in front of you, but after you’ve paid for it, it’s your responsibility.
Shops are very different from their modern equivalent. Large expanses of plate glass have yet to be invented, and indeed very few shops have any glass in their windows at all. Most have shutters that open in the middle, with hinges at the top and bottom: the top part swings upwards to provide shelter from the rain, and the lower shutter hinges down to form a table for displaying goods. Shops selling high-value merchandise, such as clocks, musical and scientific instruments and jewellery, do not have such open fronts but windows like a normal house: it is the sign hanging outside that denotes the premises as a shop. If you enter, you’ll be served at a counter in the front parlour. Note that shops open later than the market, about 6 a.m. in summer and 8 a.m. in winter. For some commodities you will need to visit a workshop. Furniture, for example, is made to order. Large items of metalwork also need to be specifically commissioned from a blacksmith, although small objects like candlesticks and knives may be available from a mercer’s shop or in the market.