Great Recoinage of 1696
Encyclopedia
The Great Recoinage of 1696 was an attempt by the British Government to replace the hammered silver that made up most of the coinage in circulation, much of it being clipped and badly worn.
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. The machine struck silver coin
s produced by the Royal Mint
in the Tower of London
after 1662 were protected from clipping by an engraved, decorated and milled edge, but were instead forged, both by casting from counterfeit moulds and by die stamping from counterfeit dies.
By 1696 forged coins constituted circa 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
market. New Acts of Parliament
were passed in order to create the Bank of England
and protect national military security. This situation also triggered 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 compared to £3,302,193 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,
England eventually committed itself to a gold standard. The only way to maintain silver as coin was to reduce the silver content so that it was worth more than the bullion of the same weight. This didn't happen until the Great Recoinage of 1816
.
History
English currency was in disarray in the late 17th century. Hand struck silverSilver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
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. The machine struck silver coin
Silver coin
Silver coins are possibly the oldest mass produced form of coinage. Silver has been used as a coinage metal since the times of the Greeks. Their silver drachmas were popular trade coins....
s produced by the Royal Mint
Royal Mint
The Royal Mint is the body permitted to manufacture, or mint, coins in the United Kingdom. The Mint originated over 1,100 years ago, but since 2009 it operates as Royal Mint Ltd, a company which has an exclusive contract with HM Treasury to supply all coinage for the UK...
in the Tower of London
Tower of London
Her Majesty's Royal Palace and Fortress, more commonly known as the Tower of London, is a historic castle on the north bank of the River Thames in central London, England. It lies within the London Borough of Tower Hamlets, separated from the eastern edge of the City of London by the open space...
after 1662 were protected from clipping by an engraved, decorated and milled edge, but were instead forged, both by casting from counterfeit moulds and by die stamping from counterfeit dies.
By 1696 forged coins constituted circa 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
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
market. New Acts of Parliament
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
were passed in order to create the Bank of England
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, it is the second oldest central bank in the world...
and protect national military security. This situation also triggered William Lowndes of the Treasury to ask the warden of the Royal Mint
Royal Mint
The Royal Mint is the body permitted to manufacture, or mint, coins in the United Kingdom. The Mint originated over 1,100 years ago, but since 2009 it operates as Royal Mint Ltd, a company which has an exclusive contract with HM Treasury to supply all coinage for the UK...
, Isaac Newton
Isaac Newton
Sir Isaac Newton PRS was an English physicist, mathematician, astronomer, natural philosopher, alchemist, and theologian, who has been "considered by many to be the greatest and most influential scientist who ever lived."...
, 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 compared to £3,302,193 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 success
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 values of each metal. In practice this usually meant that silver was worth more melted down into bullion.England eventually committed itself to a gold standard. The only way to maintain silver as coin was to reduce the silver content so that it was worth more than the bullion of the same weight. This didn't happen until the Great Recoinage of 1816
Great Recoinage of 1816
The Great Recoinage of 1816 was an attempt by the British Government to re-stabilise the currency of Great Britain following economic difficulties precipitated by the French Revolutionary Wars and the Napoleonic Wars.-History:...
.
See also
- Coin Act 1696Coin Act 1696The Coin Act 1696 was an Act of the Parliament of England which made it high treason to make or possess equipment useful for counterfeiting coins. Its title was "An Act for the better preventing the counterfeiting the current Coin of this Kingdom." It was extended to cover Scotland by the Treason...
- Bristol MintSt Peter's Hospital, BristolSt Peter's Hospital, Bristol could be found to the rear of St Peter's church until it was destroyed in the Bristol Blitz in 1940. A house had stood on that site since approximately 1400 and the hospital was a timbered, gabled mansion. In 1607 the building was bought by a rich merchant named Robert...
- Chester MintChester CastleChester Castle is in the city of Chester, Cheshire, England. It is sited at the southwest extremity of the area bounded by the city walls . The castle stands on an eminence overlooking the River Dee. In the castle complex are the remaining parts of the medieval castle together with the...