1. General Economic Background
The so-called French Wars, which consisted of the Revolutionary Wars
in the period 1792-1799, and the Napoleonic Wars in the period
1799-1815 led to financial instability in Britain. Although there was
an increase in trade of 60%, the National Debt had increased 100% by
the start of the 19th century. The high prices of wheat and other
foods were compounded by a series of bad harvests. These, together
with the destabilising effects of the war had led to riots in
1801-1802.
At the end of the wars, when trade with Europe became possible once
more, corn prices halved. The British government introduced the Corn
Laws in 1815 to protect the price of domestic grain, but this only
served to keep prices high and depressed the domestic market for
manufactured goods, because people had to use all their money to buy
food. Likewise, European countries which relied on exporting corn to
Britain in order to buy British manufactured goods were no longer able
to do so.
The government needed to find a way to stabilise the currency. The
Bank of England was allowed to resume cash payments in 1819, having
been forbidden to do so since 1797. A three-stage return to gold
payments between February 1820 and May 1823 and formal restoration of
the gold standard on 1 May 1821 improved Britain’s foreign exchange
and gold started to be transferred back into the country.
Information from: A Web of English History
The French Wars http://dspace.dial.pipex.com/town/terrace/adw03/c-eight/pitwar.htm
The Corn Laws http://dspace.dial.pipex.com/town/terrace/adw03/peel/c-laws.htm
The Bullion Committee
http://dspace.dial.pipex.com/town/terrace/adw03/peel/bullion.htm
2 The Great Recoinage of 1816 formed the start of these efforts at
currency stabilisation
The currency was in a mess, because of a drastic shortage of silver
and eventually also of copper, which had led to a huge shortage of
coins in the reigns of George II and George III, and also led to paper
money becoming legal in 1797 and to the production of local tokens of
poor quality metal, including copper, by companies and banks all over
the country.
“The scarcity of silver became so bad that the Bank of England
actually started buying Spanish silver to alleviate the crisis.
Unfortunately, the Spanish "pieces of eight" were neither as heavy,
nor as fine quality as the English Crown, so they were countermarked
with a stamp. The countermarked coins were heavily counterfeited and
by 1804, the countermarking practice had ceased. Matthew Boulton,
whose steam press had revolutionized minting, was called in to solve
the problem by completely striking over the old pieces of eight. They
were struck again in 1810 and 1811. All this took care of the large
silver shortage, but there still was a drought of small change. Tokens
sprung up all over the place in the 1780's through the early 1800's.
Some copper came out in 1806 and in large part took care of the token
scene once and for all. Finally, the great recoinage of 1816 solved
the shortage issue once and for all.”
From a web site about the HMS Charon
http://www.hmscharon.com/pages/Silver.htm
“The so-called "Great Recoinage" that commenced in 1816 was
fundamentally concerned with the re-introduction of a silver coinage
and a change in the gold coinage from the guinea valued at 21
shillings to the slightly lighter sovereign worth 20 shillings. The
value of the shilling remained unchanged at twelve pence.”
From “The Coinage of Britain” By Ken Elks
http://www.users.globalnet.co.uk/~kenelks/recoinage.htm
“The full legal establishment of the present metallic currency took
place in 1816, when the guinea made way fcr the present pound or
“sovereign,” and silver was formally reduced to the level of a token
coinage, being slightly lowered by the coinage of the pound of silver
into 66 shillings. Thus, by a course of development extending over 700
years, the English currency has been transformed from a crude silver
standard system into one resting on gold, but employing both silver
and representative money for the greater part of the actual work.”
From the Encyclopaedia Britannica of 1911:
http://52.1911encyclopedia.org/M/MO/MONEY.htm
3. Other Gold Coins in Britain
With respect to the last gold coin issued before 1817, the last gold
sovereign was issued in 1604. However, gold “unites” and later gold
guineas were issued until 1813.
The last gold sovereign to be issued before the 1817 coin was in the
time of James I “In the first coinage of James I, from 1603 to 1604,
sovereigns of twenty shillings were issued before being discontinued,
the previous pound coin was made lighter and renamed as a "unite". So
after 115 years, this was the last sovereign to be issued until the
emergence of the modern gold sovereign in 1817.”
However, “The gold broad of Oliver Cromwell was a twenty shilling
coin, and so was the equivalent of a sovereign.” The gold “unite”
continued into the reign of Charles II up to 1662. “With the
introduction of regular machine made "milled" coinage under Charles
II, the guinea was introduced in 1668. It was so called because the
gold from which many were made was imported from the African state of
Guinea by the Africa Company.” “When the guinea was originally
introduced it had a value of twenty shillings, Because of the
inflationary effects of war, the value of the guinea soon increased to
21 shillings. By March 1694, it had reached 22 shillings, and in June
1695 reached a peak of thirty shillings. At this crisis point, there
followed great public debate… whether the solution was to devalue the
gold coinage or to restore the silver coinage. Restoration won, and
1696 saw a great "Silver Recoinage", at the same time the principle
was established that the pound sterling would be a fixed weight of
gold, and this principle effectively created the "gold standard". The
guinea continued to be the main gold coin until 1813 under George
III.” “In 1816, there was a major change in the British coinage,
powered by the Industrial Revolution. The Royal Mint moved from The
Tower of London to new premises on nearby Tower Hill, and acquired
powerful new steam powered coining presses designed by Matthew Boulton
and James Watt. the modern sovereign was born!”
From the Chard "Gold Sovereigns" website
http://www.goldsovereigns.co.uk/heads.html
http://www.goldsovereigns.co.uk/uniteandguineas.html
http://www.goldsovereigns.co.uk/modernsovereign.html
The 1813 sovereign “was issued to supply Wellington with gold to pay
for supplies in the Peninsular War” “A new coin valued at 20
shillings, weighing 8.0 grams, 22 mm in diameter and called the
Sovereign was issued initially in 1817 as part of the Great Recoinage.
It took a little while to become popular, and the issue of 1819 is
very rare. Despite Royal Mint records indicating that 3574 sovereigns
dated 1819 were struck, only five specimens are known at present. The
coin was issued virtually every year from 1817 until 1917, when they
were more or less replaced by banknotes. The coin was so popular that
it has been extensively forged.”
Information from the web site of a private coin collector at
http://www.tclayton.demon.co.uk/sov.html
A list of British coins, including gold, with their dates of issue is
available on the web site about the Coin and Currency Collections in
the Department of Special Collections, University of Notre Dame
Libraries at http://www.coins.nd.edu/ColCoin/ColCoinIntros/BritishDenominations3.html |
