5.4 how important were williams wars in the development of a financial revolution? Flashcards
6 themes as to how important were williams wars in the development of a financial revolution?
nine years war restructuring of government finances public expenditure scrutiny commissions bank of england 1694 recoinage
who was the nine years war between
france vs league of augsburg
why did the nine years war come about
fear france would dominate european policies
why was the nine years war such a shift in politics
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
why was louis at an advantage to william
he had divine right behind him
large numbers of troops
when and why and how did support wain for william
post 1691
parliament became less suportive
only voted him funding for 10,000 troops
merchants were getting frustrated at hostilities around north sea trading roots
what did william do in the face of little parliamentary support
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
how did the nine years war end
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
settement finally reached = Treaty of Ryswick september 1697
settlement under treaty of Riswick
french abandon claims to land in germany and holland
louis accept william as king
french made gains in north america
what was the average expenditure during nine years war
what was the average tax revenue during the nine years war and how was this higher taxation level achieved
£5.4 million
£3.4 million
-excise taxes on tea, tobacco and alcohol
- land tax
- royal income doubled
- landed elite most likely to pay tax and as it was easy collected suggests they approved of the war? as anti catholic?
how was the shortfall in funding of the nine years war bridged
new system of public credit
crown take out a long term loan from merchants and city traders
repay them with interest
effectively selling off the governments debt
this would become national debt
was a secure debt as underwritten by parliament
1698 stood at £16.7 million, repayments accounted for 30% of the governments revenue
civil list act what was it and when
1698 = a financial settlement
king given a civil list income of 700,000 pa with any surplus granted at parliaments consent
money for williams government, civil servants and royal household
all military and naval expenditure the responsibility of parliament
civil list had to be voted on every year so king and parliament had to meet regularly
how public scrutiny of government finances began
concern from back benchers over money being spent on war
led to parliamentary commissions being set up to investigate government expenditure
commissioners would then publish reports exposing corruption / waste
what could the newly set up parliamentary commissions do and why was this important?
power to interrogate ministers
power to scrutinise government papers and spending
= holding government to account
what was the act called which set up the parliamentary commissions
Public accounts act 1690
why did william agree to the public accounts act 1690?
he saw it as the price he had to pay to ensure funding for his wars
when was the first commission set up and when did they end
1691
1697 (because the war had ended
how was it ensured the commissioners remained neutrak
each commissioner paid £500 (a lot of money so hard to bribe)
were responsible to parliament rather than the king
evidence to show the commission was effective
went into huge detail
meetings took place daily and interviews were regularly carried out
gov officials would often try to obstruct the process
many reports were left unfinished but it was made clear who had obstructed the report
william was generally happy to listen and it compelled him to shrink the army down from 10,000 to 7,000
speaker was exposed for accepting bribes
towards the end lost some of its weight as it began to attack unfavourable minsters rather than check finances
who came up with the idea of the bank of england and in general which party supported it
Whig Chancellor Charles Montagu
had large whig support
financial borrowing leading up to the establishment of the bank of england
1692 - parliament becomes interested in schemes of long term borrowing
1693 - tontine loan to the crown
banks and merchants raised loans for government by offering depositors guaranteed interest underwritten by parliament
william then needed a loan of £1.2m at 8% Montagu suggested establishing bank of england which would incorporate all lenders into a single financial institution
how would the bank of england work
purpose was to raise capital and attract investors
all loans underwritten by parliament at a guarenteed interests (so risk free)
how was the bank of england established (under law)
Royal charter granted the passage of the tonnage act 1694
bills of exchange issued to depositors
initially given as £100 but soon turned into smaller denominations (eg £5)
apart from the bank of england, how else did the crown try to raise money
lotteries with winners drawn at random
recoinage act
when and why
1696
to counter inflation as a result of coin clipping - restored confidence in coins but this didnt last long
what was the significance of parliamentary control of finance
distinction between military and civil expenditure
parliament controlled military (way to hold crown at ransom in future?)
king had no choice but to meet with parliament regularly
parliament able to audit government expenditure
1698 civil list meant king could never again avoid working with parlament
