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The Death Penalty as Monetary Policy: The Practice and Punishment of Monetary Crime, 1690-1830
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History of Political Economy 36.1 (2004) 131-161

In the 1690s during the financial revolution, clipping and counterfeiting emerged as serious threats to England's commercial base and its bid to become a global power. The damaging impact of clipping and counterfeiting prompted John Locke ([1696] 1991a, 472) to declare that money manipulations have "contributed more to Sink us, than all the Force of our Enemies could do." Counterfeiting challenged the general confidence in the exchangeability of money and consequently damaged the capacity of money to mediate exchange relations. Since the social fabric was increasingly constituted as a set of exchange relations, an assault on money was therefore considered an attack on the entire social form. This led to calls for a stricter penal code and an increased application of the death penalty to eliminate the "counterfeiting plague." The state responded quickly, rewriting the laws regarding clipping and counterfeiting of coins, as well as passing new capital statutes regarding the counterfeiting of Bank of England notes. The seriousness of the situation was further underscored by the Treasury's decision to put Isaac Newton in charge of the detection and prosecution of the money manipulators—a task he performed with great vigor and success.

Considering the sense of urgency expressed in the pamphlet debates during the 1690s and the swiftness whereby the legal changes were made, we may infer that capital punishment was perceived as a crucially important instrument for the solidification of the currency. In fact, when we trace how the death penalty was applied to new forms of money manipulations during the eighteenth century, we are forced to recognize that the death penalty continued to play a rather central role throughout the formative stages of the modern monetary system. As such, this article challenges the notion, subscribed to by many economists, that the state's role was limited to issuing money and adjusting the quantity in circulation. Indeed, the historical record forces us to expand the list of policy tools used by the state to administer the modern monetary mechanism to include the execution of those found guilty of tampering with the currency.

This article begins by sketching the historical context of the economic turmoil in England during the 1690s. This is followed by a discussion of the 1695 currency crisis, an analysis of the pamphlet debates regarding the causes and solutions of the crisis, and an outline of the legal changes made to purge England of its currency criminals. Here, Isaac Newton's role at the mint as the chief prosecutor of the clippers and counterfeiters is detailed. Thereafter follows an analysis of the newly emerging paper-money system and the laws erected against counterfeiting public and private bank bills. Finally, the laws against tampering with silver, gold, and paper money are compared to the rather anomalous laws governing copper coins.

Historical Context of the 1695 Monetary Crisis

The financial revolution (1690–1730) developed as part of another pivotal moment in English history, the Glorious Revolution. Alongside the religious controversy, the most central issue in the Glorious Revolution was the balance of power between Parliament and the Crown—a struggle carried out over the control of the state's fiscal apparatus. While the Stuarts had enjoyed the power to arbitrarily expropriate wealth—as was exemplified during the 1672 Stop of the Exchequer—the Declaration of Rights, signed by William III before he assumed the throne, significantly curtailed the monarch's right to tax and spend at will (North and Weingast 1989). Contrary to his two predecessors, Charles II and James II, who were allocated generous purses to pursue their military campaigns, William was only guaranteed a small sum of money, "insufficient to cover even the normal expenses of government" (Carruthers 1996, 40). This ensured that he would have to hold frequent Parliaments to ask for money, which secured Parliament's influence over the Crown. This, however, did not mean that William was unable to raise large sums of money for his war on France. Members of Parliament, in particular the Whigs, backed William's war efforts against Louis XIV, as a defeat in the Nine Years' War would surely have meant the return of James II and...



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