The Great Recoinage of 1696 was an attempt by the English Government under King William III to replace the hammered silver that made up most of the coinage in circulation, much of it being clipped and badly worn.

History

Sterling was in disarray in the late 17th century. Hand struck silver coins from prior to 1662 had been clipped around the edges and thus their value (weight) reduced so that they were no longer a viable tender, especially abroad. Since the machine-struck silver coins produced by the Royal Mint in the

Tower of London The Tower of London, officially His Majesty's Royal Palace and Fortress of the Tower of London, is a historic castle on the north bank of the River Thames in central London. It lies within the London Borough of Tower Hamlets, which is separa ...

after 1662 were protected from clipping by an engraved, decorated and milled edge, they were instead forged, both by casting from counterfeit moulds and by die stamping from counterfeit dies.BBC Radio 4, Book of the Week, Sept 2009, ''Newton And The Counterfeiter'' by Thomas Levenson
/ref> By 1696 forged coins constituted approximately 10% of the nation's currency. The currency also had a third problem: its value as silver bullion in Paris and Amsterdam was greater than the face value in London, and thus vast quantities of coins were melted and shipped abroad — an

arbitrage In economics and finance, arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalise on the difference, the profit being the difference between t ...

market. New

Acts of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of parliament be ...

were passed in order to create the

Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...

and protect national monetary security. The situation caused William Lowndes of the Treasury to ask the warden of the Royal Mint, Isaac Newton, for help. Branch mints were established at Bristol, Chester, Exeter, Norwich, and York to assist with the work of recoinage. Between 1696 and 1700 the value of silver struck was £5,106,019 (£ in 2015) compared to £3,302,193 (£ in 2015) coined in the preceding 35 years. Old coin was taken back by weight rather than face value. On 10 June 1696 a Proclamation was issued,

requiring all Receivers and Collectors of the Publick Taxes to take hammer'd Silver Money at five shillings and eight Pence an Ounce.

Financial results

The recoinage was not a financial success. Production tailed off by 1698. It had proved impossible to maintain a system based on gold and silver because of the variation in the bullion value of each metal. In practice this usually meant that silver was worth more melted down into bullion.The Great Recoinage of 1696-1699, Li, Ming-Hsun, London 1963 England eventually committed itself to a gold standard. The only way to maintain silver as coin was to reduce the silver content so that the coin's nominal value was more than that of the bullion of the same weight. This did not happen until the Great Recoinage of 1816.

References

{{Reflist History of British coinage Economic history of the United Kingdom 1696 in England

History

Financial results

See also

References