5.4 HOW IMPORTANT WERE WILLIAMS WARS IN THE DEVELOPMENT OF A FINANCIAL REVOLUTION?

Question 1

6 themes as to how important were williams wars in the development of a financial revolution?

Answer 1

nine years war
restructuring of government finances
public expenditure scrutiny
commissions
bank of england 1694
recoinage

Question 2

who was the nine years war between

Answer 2

france vs league of augsburg

Question 3

why did the nine years war come about

Answer 3

fear france would dominate european policies

Question 4

why was the nine years war such a shift in politics

Answer 4

transformation in british foreign policy (compared to james2)
risk on williams behalf to commit millions of pounds and thousands of troops to the cause
war strained king and parliament relations

Question 5

Why were Parliament unhappy with the Nine Years’ War?

Answer 5

• Huge sums of money needed
• Key trading routes became too dangerous after 1693
• William used foreign commanders and performed poorly in battle
• 1691: Parliament only grants him funding for 10,000 troops

Question 6

what did william do in the face of little parliamentary support

Answer 6

william recruited 68,000 men at cost of £2.8 million through borrowing from bank of england (newly formed)
william continued to face opposition in parliament and consequently took many strategic decisions himself
entered peace talks 1696 but france refused to accept him as king

Question 7

how did the nine years war end

Answer 7

both sides bankrupt 1697
william facing increasing opposition from tories and non-junto whigs
wanted army reduced in size to 7,000 and taxes used for the war should be reduced
settlement finally reached = Treaty of Ryswick September 1697

Question 8

settlement under treaty of Riswick

Answer 8

1. french abandon claims to land in germany and holland
2. louis accept william as king
3. french made gains in north america so they return to those before 1688

Question 9

How did William fund the Nine Year’s War?

Answer 9

• Bank of England, 1695 recruits 68,000 extra men
• Excise taxes on tea, tobacco and alcohol
• Introduction of a new land tax in 1692 (1/3 of required funds)

Question 10

Average yearly expenditure during 9 years war =?
Average tax revenue = ?
what is the shortfall = ?

Answer 10

1. Average yearly expenditure during 9 years war £5.4m
2. Average tax revenue £3.6million (excise taxes, land taxes (1/3)
3. Shortfall= £1.8million

Question 11

In order to meet the shortfall in funding for the way a new system of public credit was est what did this involve?
How could this system be made secure so ppl have trust in it?
—-How did william’s wars lead to a restructuring of gov finances?—

Answer 11

New System of PUBLIC DEBT established —> Crown took out long-term loans from merchants and city traders, repaying with interest —> Creation of the NATIONAL DEBT stood at £16.7 million by 1698. Repayments c.30%of Crowns annual revenue.
Secure- underwritten by P. interest on loans to be repaid by specific taxes allocated by p

Question 12

What methods were used by William’s government to raise money?

Answer 12

1. Long term loans from 1692
2. Tontine Loans e.g. 1693 investors pay into a fund> Loan. Paid back with interest (from excise taxes). Annual dividends. if an investors dies, their shares passed on to fam = increasing yield.
   - Creation of the bank of England 1694
   Tontine loan - raised £1.2m (with interest rate of 8%) = incorporated as the bank of eng
3. Lottery style scheme e.g. 1694 W able to raise £1m (100,000 tickets sold at £10)
4. Share offers: 1698 £2m raised by offering investors a share in the east India company. (reflects how boujee the company was to Brit economy)

Question 13

What was the Civil List Act 1698?

Answer 13

This was how Parliament granted the Crown revenues of £700,000 a year to meet the costs of running the = so needed to call P regularly for grants .

Government and royal establishment. From this point, the Crown was reliant on Parliament’s control of revenue for its day to day running.

Question 14

How did the Civil List Act 1698 limit monarchy?

Answer 14

• King and Parliament now had to meet regularly, more impactful in this sense than the Bill of Rights or Triennial Act
• Monarchy could never again use their prerogative to stop working with Parliament
• Gave the power over all foreign policy expenditure to Parliament

Question 15

How did monarchy remain unlimited after the 1698 Civil List Act?

Answer 15

• The monarch had other sources of income

Question 16

How was the monarch’s income reformed in 1690?

Answer 16

They were voted income from excise duty for life but only from customs duties for four years, deliberately inadequate

Question 17

What was the Public Accounts Act 1690?

Answer 17

Created commissions that oversaw government expenditure, these commissions would conduct themselves with unprecedented attention to detail

Increased P control of revenue help to ensure success of the B of E = investors feel more confident that their loans wuould be repaid by parliamentary taxation

Question 18

How did monarchy remain unlimited after the 1690 Public Accounts Act?

Answer 18

• William blocked more commissions from 1697 and even before then government officials would attempt to block proceedings, many of the intended reports were never completed
• Lost its impact as it was used more and more to attack ministers rather than meaningful financial scrutiny
• Eradicated distrust of royal finances so there was no uproar when William blocked it
• Greater accountability opened up much greater access to national resources like taxation

Question 19

How was monarchy limited by the 1690 Public Accounts Act?

Answer 19

• William would generally take the accounts of the Commission seriously
• High profile members of the House like the Speaker were expelled for financial malpractice
• Commission was responsible to Parliament rather than the monarch

Question 20

How did the bank of England Work?

Answer 20

Investors in the bank -able to deal in bills of exchange. in return, investors had the guarantee that they would be paid through excise duties specified by parliament. —-> More bank notes, smaller

• –> Allowed William to attract a large number of investors would deposit small mount of money to be lent to gov.
• –> Secure - had the backing of P. Guaranteed the system. Tax revenue higher and more stable than ever before
• –> Ideas of a national debt and long term loans= Essential to Brits economy ever since.

Question 21

What was the significance of the Bank of England?

Answer 21

• Ensure money will be raised for war. (although William still needed to find other short term loans to fill gaps)
• 1698 civil list Ensured the annual meetings of P necessary to maintain the monarch’s financial credit
• P effectively took over funding for the military

Question 22

What was the impact of the Bank of England on the British economy?

Answer 22

All of Europe was in recession apart from England and the Netherlands.

• The Bank of England gave low interest loans to manufacturers so they could borrow money to develop manufacturing, the Bank of Amsterdam didn’t do this.
• Essential to Britain overtaking the Netherlands as an economic power.

Question 23

What was the 1696 Recoinage Act?

Answer 23

The surrendering of old flawed coins and the production of new ones, boosted confidence in the economy.

Question 24

How did public scrutiny of government finances develop?

Answer 24

Growing concerns about huge amounts of money being spent on war.

• —> Commission set up to investigate
• —-> 1960 Public accounts Act first commission in 1691 and then renewed annually until 1697.
• —> Commission 9 ppl (then 7) Voted for by MPs. Answerable to P Paid £500 yr
• —-> Pwrs to call for gov papers to be studied and minister to be interrogated.
• —-> Published repots on findings, often exposing corruption or waste.

Question 25

How far did the public scrutiny of government finances increase Parliament’s power and reduce the monarch’s power? -Successes for Parliament-

Answer 25

• Brought some ministers to account for mis-managements.
• Forced Williams to reconsider size of the army
• Increase P power and influence - could openly criticise the gov.

Question 26

How far did the public scrutiny of government finances increase Parliament’s power and reduce the monarch’s power? -Problems for Parliament-

Answer 26

• Faced obstruction from officials = reports often not completed = difficult to make recommendations for improvement.
• Second half of 1690s lost impact- more about attacking unpopular ministers rather than focusing on expenditure.
• = William blocked more from being set up after 1697.

Question 27

How could you argue that the financial situation was MORE important in ensuring parliament’s power than the political settlement of 1688/9 & triennial Act?

Answer 27

Civil list, 1698 = King got £700,000 a year with parliaments agreement = king and P had o meet regularly for the grant to be renewed.
= enforced need for the monarch to work with parliament.
= it was a large sum, but MOs had no fear that granting this would undermine Parliament, which shows P importance,
2- All military and naval expenditure, in peace and war, responsibility of parliament = p could withhold money and out they king to ransom.
3. P provided security for BoE - est with an Act of Parliament.
4. Commissions - appointed by p. Able to bring minister to account