Charles II. The Fire of London. The Coined Money Act. The next world war. One ring to bind them all.


www.sustecweb.co.uk/past/sus...Money.htm
"The nature of money was identified as a societal institution rather than merely metal. According to Del Mar the decision was so detested by the merchant classes, the goldsmiths, and later the British East India Company, that they worked incessantly to destroy it.

"This occurred in two stages: The first stage was to destroy the British Crown’s monetary prerogative, throwing the control of money open to the merchants and financiers. This was done by undermining the Crown and then passing the free coinage act of 1666, opening the way for the foreign element to establish a new Monarch, and to reconstitute the money prerogative in the hands of a specific group of financiers – not elected, not representing society, and in large part not even English."

[This parallels the bailout of Canadian banks from their heavy speculative losses by shifting money creation from the central bank to the commercial banks by doing away with the statutory reserves (or in other countries such as the UK and the US reducing them to near insignificance).]

Sanitized Monetary History

"The sanitized Whig histories of this period misrepresenting Charles II as a spendthrift, and London’s goldsmiths as good businessmen, are still swallowed by economists. Christopher Hollis presents a very different picture in his book, The Two Nations (London, 1935, reprinted Gordon, 1975).

"When Charles II returned to England, he needed a standing army to ward off continental threats, but Parliament refused to vote the funds and delivered only £800,000 of the £1,200,000 money that was voted, forcing Charles to use his wife Catherine’s dowry for expenses of the state. Dutch financiers appeared willing to finance him but when he allowed legislation to pass contrary to Dutch merchant desires, they concluded that ‘the King could not be made serviceable to his creditors.’ Charles was forced to borrow from the English goldsmiths at 8%, giving as security the first taxes later to be voted by Parliament. As this ‘security’ became postponed, they demanded 20% to 30% per year.

"Charles considered issuing debased coinage to pay the army, but the merchants immediately raised prices 10% ‘in anticipation’ of a debasement! He offered to drop all talk of debasement if they would loan him £200,000. They refused.

"The merchants kept some of their money stored at the Tower of London. Charles finally blocked the funds – £130,000 – refusing to release them until they agreed to lend him a pitiful £40,000. This led to a flight of coinage to the goldsmiths, who had secure premises and accepted deposits from people who no longer trusted Royal safekeeping at the Tower.

"According to Hollis, the London goldsmiths who play such a large part in the story of Restoration England were to a great extent mere agents operating with Dutch money. Finally in 1667 Charles II began to issue a kind of paper money to pay state expenses. It was almost true money, and took the form of Royal Exchequer Orders to Pay, good for coinage after one year. Taking one more step would have made them true money –that is, not having them payable in ‘money’ but be the money themselves."