Monday 11 December 1665

Lay long with great pleasure talking. So I left him and to London to the ‘Change, and after discoursed with several people about business; met Mr. Gawden at the Pope’s Head, where he brought Mr. Lewes and T. Willson to discourse about the Victualling business, and the alterations of the pursers’ trade, for something must be done to secure the King a little better, and yet that they may have wherewith to live. After dinner I took him aside, and perfected to my great joy my business with him, wherein he deals most nobly in giving me his hand for the 4,000l., and would take my note but for 3500l.. This is a great blessing, and God make me thankfull truly for it. With him till it was darke putting in writing our discourse about victualling, and so parted, and I to Viner’s, and there evened all accounts, and took up my notes setting all straight between us to this day. The like to Colvill, and paying several bills due from me on the Tangier account. Then late met Cocke and Temple at the Pope’s Head, and there had good discourse with Temple, who tells me that of the 80,000l. advanced already by the East India Company, they have had 5000l. out of their hands. He discoursed largely of the quantity of money coyned, and what may be thought the real sum of money in the kingdom. He told me, too, as an instance of the thrift used in the King’s business, that the tools and the interest of the money- using to the King for the money he borrowed while the new invention of the mill money was perfected, cost him 35,000l., and in mirthe tells me that the new fashion money is good for nothing but to help the Prince if he can secretly get copper plates shut up in silver it shall never be discovered, at least not in his age. Thence Cocke and I by water, he home and I home, and there sat with Mr. Hill and my wife supping, talking and singing till midnight, and then to bed. [That I may remember it the more particularly, I thought fit to insert this additional memorandum of Temple’s discourse this night with me, which I took in writing from his mouth. Before the Harp and Crosse money was cried down, he and his fellow goldsmiths did make some particular trials what proportion that money bore to the old King’s money, and they found that generally it come to, one with another, about 25l. in every 100l.. Of this money there was, upon the calling of it in, 650,000l. at least brought into the Tower; and from thence he computes that the whole money of England must be full 6,250,000l.. But for all this believes that there is above 30,000,000l.; he supposing that about the King’s coming in (when he begun to observe the quantity of the new money) people begun to be fearfull of this money’s being cried down, and so picked it out and set it a-going as fast as they could, to be rid of it; and he thinks 30,000,000l. the rather, because if there were but 16,250,000l. the King having 2,000,000l. every year, would have the whole money of the kingdom in his hands in eight years. He tells me about 350,000l. sterling was coined out of the French money, the proceeds of Dunkirke; so that, with what was coined of the Crosse money, there is new coined about 1,000,000l. besides the gold, which is guessed at 500,000l.. He tells me, that, though the King did deposit the French money in pawn all the while for the 350,000l. he was forced to borrow thereupon till the tools could be made for the new Minting in the present form, yet the interest he paid for that time came to 35,000l., Viner having to his knowledge 10,000l. for the use of 100,000l. of it.] —(The passage between brackets is from a piece of paper inserted in this place.)

17 Annotations

Terry Foreman  •  Link

"the 80,000l. advanced already by the East India Company,"

L&M reference 5 December: "Captain Kingdom...says he cannot find the paper (which is a pretty thing to lay orders for 100,000l. no better)."

"in mirthe tells me that the new fashion money is good for nothing but to help the Prince if he can secretly get copper plates shut up in silver it shall never be discovered, at least not in his age."

I.e., if he can get it skillfully silver-plated.

"the new invention of the mill money"

Cp. 24 November 1662: "I did see, the stamps of the new money that is now to be made by Blondeau’s fashion, which are very neat, and like the King."

cape henry  •  Link

"...if he can secretly get copper plates shut up in silver it shall never be discovered, at least not in his age." And so, as it happens now, U.S. coinage is mainly nickel alloy plating on a copper core. Even the copper is no longer pure, but a composite metal.

JWB  •  Link

Great Golden Grasshoppers
Gresham's Law:
"...people begun to be fearfull of this money’s being cried down, and so picked it out and set it a-going as fast as they could, to be rid of it."

cgs  •  Link

Gresham is best known today among Economics 101 students for what is commonly called ‘Gresham’s Law’. (Although Gresham never formally wrote anything out), as a merchant he quickly came to understand that ‘bad money drives out good’ which is the basis of ‘Gresham’s law.

What that means (as a grad in good standing of Econ 101, is that in any system that has two currencies, the debased (or more worthless)) currency will drive out the more valuable currency. People prefer to keep the currency they perceive as more valuable and hence will more quickly trade the currency they view as worth less, relatively.

The most recent example of this, at least when it comes to money, is our own dollar.

Until 1934, a US dollar was worth 1.5048 grams of gold, and could freely be exchanged for that at any time. Pretty remarkable when you think about it. Dollars and gold and gold coins were freely exchanged and really interchangeable. When they said ’sound as a dollar’, it meant something. (The UK Pound, interestingly, is called a pound because 1£ once was equally exchangeable for a pound of silver. That’s why it was called Pound Sterling.. and still is).

In any event, in 1934, Franklin Roosevelt, by executive order declared that the dollar henceforth would be redeemable for .850 grams of gold, effectively debasing the dollar in half (or almost so) immediately. The reaction? Gold disapperaed from common exchange almost immediately. People naturally began to horde gold and trade more paper dollars. This created an independent market for the value of gold, and by 1971, one dollar was worth, effectively 1/35th of an ounce of gold. In 1971, Nixon disconnected the dollar from exchangeability at all, and henceforth the dollar was backed only by ‘faith in the US Government’. Gold itself was traded entirely independently from paper money. When was the last time you bought something for a piece of gold? Or a gold coin?

Maurie Beck  •  Link

Although Sam is looking out for the king as well as for himself, what about looking out for the poor sailors eating mealy grub? Of course, with the realm's money legally counterfeited and everyone taking their share of worthless money, the sailors should be happy with any grub at all.

Robert Gertz  •  Link

" mirthe tells me that the new fashion money is good for nothing but to help the Prince if he can secretly get copper plates shut up in silver it shall never be discovered, at least not in his age..."

"Haw-haw, I...Pepys? Are you writing this down?"

"Just getting it clear for myself, Mr. Temple."

"Damn you, this isn't for publication. What do you mean by this? Thugs!!"

"Sir." "A problems, Sir?" "Mr. T?"

"That paper, Mr. Pepys. Please."

"Fine, fine...Here...I'll have you know it's a great loss to History, though." Hands paper over.

"The Prince will leave an autobiography as recompense. Good night, Pepys. Thugs?"

"Yes, good night, sir." "Pleasure, sir." "Pleasant evening, sir."

"Right..." Watches departing Temple and goons."

"Bess...?" Hiss to Bess rising from shadow of building.

"Got it all."

"Excellent." Takes papers. "This should be just what we need to see that Rupert agrees to help clear my Lord Sandwich's befouled name."

"Very juicy. Say, this was fun. 'Duty to Posterity' or no, if every one of these encounters is that good...?"

"Oh, no...Usually very boring stuff, my love...Business, you know...Terrible stuff."

"Oh? Think I'd like to read a little more of your journal."

Robert Gertz  •  Link

Geesh, Sam...And while you were inserting papers that somehow got preserved for hundreds of years in the Diary how come you couldn't have inserted Bess' letter fragments or some of your love letters to her or one of her paintings?

[Meanwhile, in some well-appointment flat's library...

"Who said he didn't, friend? Ha, ha, ha..." Toast to framed painting and framed, carefully reassembled letter on wall.]

Paul Chapin  •  Link

To whomever wrote the illuminating essay on Gresham's law, who are you, and what have you done with our cgs? I could understand every word.

AussieRene  •  Link

and henceforth the dollar was backed only by ‘faith in the US Government’.
Explains the mess the US has got the world into, really.

Tony Eldridge  •  Link

Hear, hear Paul Chapin - and cgs, thanks for the exposition. Any ideas how Sam physically managed to cream off £500 without being spotted? Would he be holding actual gold or tallies for Gawden to redeem against his note?

Robert Gertz  •  Link

Wasn't Hill who slept over (again) not Andrews?

(FDR didn't cause the current global crisis. But such discussions belong to email or other forums and I will happily join anyone in such, though I may point out the rest of the world has had its share in the crisis, whatever the failures of the US to mind its regulatory and other affairs properly in the last eight. Sorry, Phil, back to Sam.)

A. Hamilton  •  Link

in the brackets

For a learned disquisition on the uses and abuses of Gresham's law, see Nobelist Robert Mundell's paper at

Whether it was due to Temple's shaky grasp of the velocity of the money supply, or Sam's misapprehension of the argument, the observation, that the King's allowance of L2M p.a. would soon exhaust the money supply if the supply were not larger than the calculated figure, completely overlooks the strong probability that the king spends every penny of that allowance (and more).

cgs  •  Link

"dollar was backed only by ‘faith in the US Government’."

credit doth mean, he, she, it is believing, loosely from that he whom has faith believes also.
Credo,didi,itum, L for to lend,entrust,trust,believe in .
creditor a perfect Latin word for creditor.

so believe thy banker when he gives thee credit,so goes the credo.

I will not accept the credit for this.......

Terry Foreman  •  Link

Michael Rosenblum also observes that "Gresham’s discovery was not really all that new. Aristophanes made the point in The Frogs in 405 BC.

The course our city runs is the same towards men and money.

She has true and worthy sons.

She has fine new gold and ancient silver,

coins untouched with alloys, gold or silver,

each well minted, tested each and ringing clear.

Yet we never use them!

Others pass from hand to hand,

sorry brass just struck last week and branded with a wretched brand.

So with men we know for upright, blameless lives and noble names.

These we spurn for men of brass…."

Australian Susan  •  Link

".....650,000l. at least brought into the Tower; ...."

The Royal Mint was situated at the Tower. There's a lot about this in a novel called Dark Matter by Philip Kerr ( ) which is set just after the Diary period.

Terry Foreman  •  Link

The concern for coinage, the "whole money of England" and Sir Thomas Gresham's observations are classic mercantilism.

Mercantilism was an economic theory and practice, dominant in Europe from the 16th to the 18th century, that promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism or absolute monarchies. Mercantilism includes a national economic policy aimed at accumulating monetary reserves through a positive balance of trade, especially of finished goods. Historically, such policies frequently led to war and also motivated colonial expansion....Mercantilism in its simplest form is bullionism, but mercantilist writers have emphasized the circulation of money and reject hoarding. Their emphasis on monetary metals accords with current ideas regarding the money supply, such as the stimulative effect of a growing money supply. Specie concerns have since been rendered moot by fiat money and floating exchange rates.

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