It’s about Charles the Second, whom the people had brought back from exile in France to be their king, after deciding they hated the military dictatorship of Cromwell’s army.
Charles could not care less about the people, or about keeping his word, and in 1670 decided that he would secretly join France and make war on the Dutch, despite England’s popular treaty with that country.
But war needs money, and they were under a gold standard then. He could not print as much as he wanted, nor could he tax the people without consent of Parliament.
We give the floor to Macaulay, my words of explanation in brackets:
The first object of Charles was to obtain from the Commons supplies which might be employed in executing the secret treaty…They [Charles’ lackeys] soon perceived, however, that, though the House of Commons was chiefly composed of Cavaliers [the party loyal to the King], and though places and French gold had been lavished on the members, there was no chance that even the least odious parts of the scheme arranged at Dover [where the treaty with France was signed] would be supported by a majority.
It was necessary to have recourse to fraud. The King professed great zeal for the
principles of the Triple Alliance [with Holland], and pretended that, in order to hold the ambition of France in check, it would be necessary to augment the fleet. The Commons fell into the snare, and voted a grant of eight hundred thousand pounds. The Parliament was instantly prorogued; and the court, thus emancipated from control, proceeded to the execution of the great design.
The financial difficulties however were serious. A war with Holland could be carried on only at enormous cost. The ordinary revenue was not more than sufficient to support the government in time of peace. The eight hundred thousand pounds out of which the Commons had just been tricked would not defray the naval and military charge of a single year of hostilities. After the terrible lesson given by the Long Parliament [that the Parliament would behead you if you messed with their power of the purse], even the Cabal [=Charles’ Cabinet] did not venture to recommend benevolences [=forced contributions to the sovereign] or shipmoney [an obsolete tax going back to Saxon days to pay for defense of the country].
In this perplexity Ashley and Clifford proposed a flagitious [look it up] breach of public faith. The goldsmiths of London were then not only dealers in the precious metals, but also bankers, and were in the habit of advancing large sums of money to the government. In return for these advances they received assignments on the revenue, and were repaid with interest as the taxes came in. About thirteen hundred thousand pounds had been in this way intrusted to the honour of the state.
On a sudden it was announced that it was not convenient to pay the principal, and that the lenders must content themselves with interest. They were consequently unable to meet their own engagements. The Exchange was in an uproar: several great mercantile houses broke; and dismay and distress spread through all society.
Meanwhile rapid strides were made towards despotism. Proclamations, dispensing with Acts of Parliament, or enjoining what only Parliament could lawfully enjoin, appeared in rapid succession.
OK, fascinating bit of history, but what’s it doing on this blog? It spoke to me, that little story. It brought to life all I’ve been reading about these last few years about govts and money.