Newton at the Mint: a Brief Historical Background

Newton came to public prominence during the last few years of the seventeenth century, firstly as a result of his work on light and colours, and latterly, as a result of the impact of his epoch-making Principia Mathematica of 1687. While still at the peak of his intellectual powers, he decided to make a radical career change. Offering his full support for the Williamite regime in the wake of the Glorious Revolution of 1688-9, he became an MP for the University of Cambridge in the Convention Parliament and soon sought a plum position in the Metropolis. Newton soon enjoyed the patronage of men like the philosopher John Locke and Charles Montagu, an erstwhile colleague at Trinity College who was soon to become Chancellor of the Exchequer. As early as 1690 they were discussing the possibility of obtaining the office of Comptroller of the Mint (one of the three major positions in the institution) for Newton, but an appropriately prestigious employment in the Capital did not become available until early 1696. In the spring of that year Montagu offered him the apparently undemanding office of Warden of the Mint. Far from treating the job as the sinecure Montagu had promised, Newton took up this role with his customary intensity and brilliance, moving to the more powerful position of Master of the Mint at the end of 1699. He would hold this office until his death in 1727.

Newton was employed at the Mint just as England experienced the most extraordinary financial revolution in its history. Drawing to some extent on practices already common in the Netherlands, post-revolutionary London witnessed the development of a number of new schemes for making money, involving innovations in banking, insurance, stock-jobbing and debt purchase. The most important desideratum was to create mechanisms for raising money to build a navy adequate for prosecuting the war against France. As a result of the baneful actions of James II, parliament had taken over many of the financial roles previously exercised by the Crown. To keep the monarch dependant on its services (and thus ensure that it was permanently in session), it severely limited the amount of money it was prepared to raise through taxation in order to support the war effort. However it did back various ruses to raise money, including the institution of a National Lottery along with ‘tontines’ and other schemes. The most successful project by far was the creation of a national bank, which lent money to the government to prosecute the war. The Bank of England was founded in 1694 for this purpose, being funded by loans from various grandees who received a healthy annual interest rate, guaranteed by taxes raised by parliament. Thus the National Debt was created, allowing the government to successfully raise money to fight wars for over a century.

The government faced another serious problem. For some time, the older ‘hammered’ silver coin that was used as legal tender had been degraded, having been ‘clipped’, melted, and reconstituted with a lower silver content. Good quality coin, which was either hoarded, or melted to be sold as bullion in Amsterdam (because the value of the specie had risen above the face value of the coinage), was constantly taken out of circulation in favour of devalued currency. By the early 1690s the government feared that there was insufficient good quality currency to fund day-to-day transactions. As a result, the older money was called in, and a major effort was instituted to ramp up the production of new silver coins. To preserve what was termed ‘publick credit’, these were minted with the old proportion of silver, and with milled edges that contained writing that guaranteed the value of the coin.

Much of Newton’s first decade in office involved him drawing up a giant web of information concerning the ‘clippers and coiners’ who were committing treason by defacing the coin of the realm. Most of the depositions relating to his work survive, showing just how committed he was to catching criminals and to seeing that they were brought to justice. By means of this extraordinary effort, he was able to successfully prosecute a large number of counterfeiters, including the greatest of them all, William Chaloner.

Thanks to pioneering ‘time and motion’ studies, Newton re-organised the internal workings of the Mint to make it much more efficient than before. His input was central to the success of the Great Recoinage that took place from the mid-1690s, and he was key to the reorganisation of the English and Scottish Mints that was necessary for the creation of the currency in the wake of the Act of Union of 1707. From 1700 Newton received weekly reports concerning the price of both metals on the Amsterdam and other markets during this period, and strove to ensure that the face value of silver coinage would not fall beneath the value of the bullion. He was instrumental in fixing the value of the gold guinea at 21s (£1.05), and maintained the integrity of the institution through major financial crises such as the South Sea Bubble of 1720.