After discovering calculus, the reflecting telescope, the nature of light and colour, and revealing the laws of gravity, motion, and cooling, the brilliant English scientist and godfather of the Age of Enlightenment, Sir Isaac Newton decided it was time for a radical career change.
He retired his telescope and lowered his gaze to more worldly matters: money.
In 1696, he was appointed Warden (later Master) of the Royal Mint, the United Kingdom’s oldest company and the official maker of British coins. Newton left the quiet village academic life of Cambridge and moved into the Tower of London.
The nation’s finances were in dire straits (a terrible situation). Whereas today’s coins are just tokens of their value, the coins of this period contained their value in silver or gold.
Sir Isaac Newton
At the time of Newton’s appointment, most coins in circulation were either underweight or counterfeit (fake). The problem was threefold: hand-struck (hammered) silver coins were clipped or shaved (had pieces cut off them) and their value (weight) reduced. There was “heavy” money and “light” money.
‘Clippers’ were criminals, often in organised gangs, that clipped or shaved away at the edge of the coins.
Secondly, the machine-made silver coins produced by the Royal Mint introduced in 1662 were easily copied. Within weeks of a new coin being released, counterfeiters had developed machines that produced almost identical coins made of copper, tin, and other cheap metal coins.
Gangs of criminals shaved, clipped, stamped, molded, and melted down coins
The third problem was that the silver in the coins often fetched a higher price in Paris and Amsterdam than in London. Large quantities of coins were melted down and sold abroad.
Gangs of criminals shaved, clipped, stamped, molded, and melted down coins. It was a lucrative, but dangerous business. It was high treason (haute trahison), and the punishment was severe. Those convicted were often hanged (sometimes hanged, drawn, and quartered) if they were male, and burnt alive if they were female.
The Mint was in urgent need of a detective-cum-visionary with the qualities of Sherlock Holmes and an extensive knowledge of metallurgy and mathematics to restore integrity to the nation’s money supply. Newton was the über-perfect candidate; obsessive, tenacious, and a brilliant administrator and alchemist.
Newton brought order to chaos. He managed over the next 30 years to recall all coins in circulation and replace them with a more secure coinage, and then introduced the gold standard.
The Tower of London in the 17th century
He relentlessly hunted down counterfeiters, frequenting sleazy taverns and dank prisons, gathering information and evidence, and developed a network of spies and informants.
The most influential counterfeiter of the day and Newton’s arch nemesis was William Chaloner, who rose from nail-maker’s apprentice to quasi-influential gentleman on the profits of counterfeiting, theft, fraud, and duplicity. It took Newton two years to gather enough evidence to end Chaloner’s life and career. It was personal. Chaloner publicly humiliated Newton and almost convinced authorities that he would be the best man to run the mint because of his extensive “inside” knowledge of counterfeiting.
He was convicted of high treason and hung on 22 March 1699.
The book Newton and the Counterfeiter by Thomas Levenson documents their epic game of cat and mouse.
Newton recalled (ordered the return of) the coin supply and replaced them with new coins with regular machined edges (much like the coins of today) that couldn’t be clipped so easily. Five new mints were opened in Bristol, Chester, Exeter, Norwich and York to supplement the Tower Mint in London. It was a slow process and caused some financial panic and instability. It was also expensive, costing the government millions of pounds.
To calm the unrest, the government promised that every coin would be refunded, no matter what condition. This led to a last-minute clipping and shaving frenzy.
The Government introduced a new tax called the Window Tax to recuperate money spent on the recoinage
The Government introduced a new tax called the Window Tax to recuperate the money spent on the recoinage. Households were taxed on the number of windows in their home. As a result, many people bricked up their windows and covered their vents. The resulting reduction in access to light and air brought widespread anguish and illness, including cholera, typhus and smallpox. The tax was wildly unpopular and continued to cause misery for many years after the Great Recoinage was complete.
Despite this, Newton stabilised and modernised the English currency. He was the first non-royal figure on a note, the one pound note (1978 -1984), no longer in circulation.
His famous quote , “standing on the shoulders of giants” (see below)) is inscribed on the edges of the two pound coin. It is also the name of an Oasis album.
The life of Sir Isaac Newton
British economist, John Maynard Keynes described the genius of Enlightenment ( le siècle des Lumières ) as “one of the greatest and most efficient of our civil servants”. A fine accolade, but not quite as sumptuous as this from poet Alexander Pope:
Nature and Nature’s laws lay hid in night: – God said, “Let Newton be!” and all was light.
If I have seen further than others, it is by standing upon the shoulders of giants.
I can calculate the motion of heavenly bodies, but not the madness of people.
We build too many walls and not enough bridges.
To every action there is always opposed an equal reaction.
Newton and the Counterfeiter by Thomas Levenson. Read more here
Newton by Peter Ackroyd. Read more here
2 réponses à “Newton’s law of money”
Very interesting column, very informative!