Calendar of Treasury Books, Volume 19, 1704-1705. Originally published by His Majesty's Stationery Office, London, 1938.
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War Supply And Finance Anno 1704.
The problem of financing the war against Louis XIV was comparatively simple as far as England was concerned. When once the English quota of men and money had been stabilised it changed very little, and in the matter of ways and means for raising supply the alternatives before the House of Commons were few.
The War Vote became practically fixed in amount and war supply became stereotyped in character.
At the outset of the conflict the English quota to the Allied land Forces had been fixed at 40,000 men ; the English Naval Force was fixed at another 40,000 which included 5,000 Marines or men for sea service. Within the first year these quotas were increased by an addition or augmentation of 10,000 men to the Land Forces and an addition of 5,000 men for sea service was made to the naval quota making in all 50,000 men for land service and 45,000 men for sea service. When the war area was extended to Portugal and Spain a further 8,000 British and 13,000 Portuguese troops were put on the English quota, thus making a grand total of 116,000 men. To this in 1706 was added a further force of 6,360 men to the King of Spain's troops and 3,000 Palatines, 2,319 Saxons and 400 of Bothmar's Dragoons. These figures for the numbers of men were not again materially altered and whilst each successive augmentation involved a further increase in pay and in the Ordnance land service vote and a further increase in subsidies to the Allies the total addition to the war budget under these two heads was surprisingly small.
The normal or normalised war budget was therefore roughly as follows up to the end of 1704.
The voting of Supply for this War budget was a matter quite as stereotyped in procedure and on the surface quite as simple in substance as were the above Departmental and War Estimates. Directly the House assembled in the winter it voted block votes of Supply on the above lines for the war for the coming year, so much for so many men for the Navy and for the Navy Yards, Victualling and Ordinary including the Ordnance sea service ; so much for the army abroad under the heads of the 40,000 men and of the 10,000 Troops of Augmentation including the respective subsidies and so much for the Composite Force in Portugal and Spain with the relative Portugal and Savoy subsidies ; and finally so much for the Ordnance land service and for the Navy Ordinary and Guards and Garrisons at home. With this the direct votes of Supply terminated, for the simple reason that the House of Commons considered or deluded itself into the belief that the Civil government of the country and the royal state had been amply provided for by the Civil List Establishment arrangement at the commencement of the reign and that the accumulated deficiencies of William's reign had been amply provided for by the two Acts for Deficiencies. And even when the House of Commons proceeded to the next step and began to cast about for Ways and Means to provide the War Supply thus voted, the matter still remained, on the surface, fairly simple and stereotyped. However much the Country party or the Tory landlord might grumble the Land tax still remained the sheet anchor of English finance under Anne. It was the virtual equivalent of the Income Tax of 19th and 20th century England and was accepted with equal resignation and with as ill a grimace. After the Land Tax, representing direct taxation, there ranked for choice a chain of indirect duties on malt, luxury Customs and luxury Excise : then finally the extraordinary ways and means of Lotteries and sales of Annuities, representing different types of borrowing and of postponed or growing debt. However long the debates in Committee of Supply endured, and however numerous or ingenious or ridiculous were the alternative expedients proposed, the ultimate result gravitated inevitably towards this bed rock concept of national finance, the 4s. Aid on Land and income for direct taxes and Malt or luxury Customs and luxury Excise for indirect taxes. This categorical simplification of Parliamentary finance was largely due to the fact that other available sources of revenue (such as House Duties, Stamps, Marriage Duties, Salt, etc.) were appropriated to special liquidations or special appropriations. They were already booked for years in advance for meeting loans or deficiencies.
If the ultimate outcome of the taxation proposals or financial schemes on these simple lines had been borne out in actual experience the system would have been justified by its results. But it was in this very point of taxation yield under William III and under Anne that the whole system of Estimating and Supply voting and Ways and Means provision broke down.
Normally a 4s. Aid or Land Tax was expected to yield 2,600,000l. ; the Continued Duties on Malt, Mum, Cider and Perry were expected to yield over 600,000l. and so on ; and in the confident expectation that actual tax receipts would realise these expected figures the House of Commons authorised the Treasury to take in loans to such and such a maximum on each of these heads of Supply. When the actual tax receipts were found to be short of the anticipated estimate the debit balance was carried forward in some form or other, either as a first debenture charge or loan-register-charge on the next Aid to be granted by Parliament, or as accumulating floating departmental debt. For the first 3 years of Anne's reign 1701-2, 1702-3, 1703-4, the war service estimate had amounted to 3,322,288l. 4s. 0d., 3,535,457l. 7s. 2d. and 4,134,683l. 18s. 9d. The receipts from the War Supply voted for these years reveal the falling off.
In skeleton form the actual figures of Estimates, Votes and receipts are as follows :—
The above skeleton table deals only with War Supply and represents a computation from the Votes of Supply on the one hand and the Revenue and Expenditure Return on the other hand. But in November 1707 a special account was presented to the House of Commons (C.J. XV, p. 441) showing the deficiency of the annual supply grants from a slightly different point of view. This account uses the word Deficiency in a double sense (1) the amount by which the grants in Parliament were deficient [or insufficient] in answering the public service for the year (2) the deficiency between the estimated value of the grants so made and the moneys actually yielded by the grants.
By reason of the uncertainty of the term "Public Services" it is difficult to compare these two accounts but their testimony is remarkably parallel up to the point of the actual yield of Supply. Here the method of calculation is radically different and the revelation of the actual deficiency of real revenue is not so striking and convincing as in the above skeleton table. The House of Commons account is however valuable in its detail as to the growth of Departmental Navy Debt. The account is as follows, so far as relates to the Budget years 1702, 1703, 1704 which are in question in the present Introduction.
To revert to the skeleton table on p. viii supra, which is compiled from the Revenue and Expenditure printed in full in this Introduction.
It must be understood that the figures of tax receipts year by year do not represent the actual figures or resources which the Lord Treasurer had to handle in the course of the budget year. The system of the time, and the only possible system, was to borrow up to the hilt on every available source of Supply, as soon as it had received parliamentary sanction. These borrowings were practically or nearly all the funds or means which the Treasury had for carrying on the services. They were always twelve months ahead of tax receipts. So that when the tax receipts came into the Exchequer in due course they had perforce to be paid away in liquidation of loans taken in a twelve month previously. Such repayment was obligatory under the parliamentary guarantee contained in the grant of Supply. If the Lord Treasurer had delayed the repayment or had attempted to evade it his action would have amounted to embezzlement and would have been equivalent to a declaration of national bankruptcy by the Lord Treasurer.
Take, for instance, the Fifth 4s. Aid with the accompanying "Subsidies." This was voted towards the end of the year 1701. It only became collectable as from 25th March 1702. But as soon as the Act passed and long before it became collectable the Exchequer took in 1,450,534l. of loans on credit of it. In addition to that sum further loans to the amount of 650,000l. had been taken in at the Exchequer on security of the Vote of Credit by the House of Commons and these loans were charged to the 5th 4s. Aid thus making a total of 2,100,534l. loans on the Aid before the Aid itself became collectable. These loans were used as valid income for the expenditure year Michaelmas 1701 to Michaelmas 1702. Therefore when the tax receipts began to come in in the course of the succeeding year 1702-3 they were already mortgaged and had instanter to be used in paying off the aforesaid loans. That is to say the Treasury financed itself by loans on the Aid, by hypothecating the tax receipts from the Aid. Throughout the reigns of William and Anne the Land Tax receipts of one year could never be used for expenditure purposes of that year. The tax was used as a fund for borrowing upon for the current year and then the receipts from it in the following year went in loan repayment and the current expenditure of that succeeding year was provided for by fresh loans on the next succeeding Land Tax, and so on, year after year.
In the particular instance of the Fifth 4s. Aid voted for the use of the year 1701-2 the receipts from the tax came into the Exchequer during 1702-3 and were at once paid out again in settlement of those loans : in manner as follows :
The final account therefore for the Fifth 4s. Aid and Subsidies showed
|Total receipts 1701-1704||2,174,381||19||0|
|Total repayments of principal with interest||2,136,584||4||2¼|
|Balance ultimately available for expenditure purposes||£37,797||14||9¾|
As far as the Lord Treasurer was concerned the Fifth 4s. Aid had yielded 2,100,534l. in loan money for the financing of the year 1701-2 and it ultimately left a balance of 37,797l. 14s. 9¾d. to help towards financing the year 1703-4.
I have worked through this typical example to its final outcome by drawing on the figures of later years so as to be able to show a final balance. But it will be easily understood that at any half way date the Lord Treasurer could not know what the final yield and final balance of any tax would be. He had to deal with each year's receipts of tax and repayments of loan as the figures lay before him and it might easily happen that in a particular year the accounts of this or that tax might show an adverse balance, that is to say more money repaid in principal and interest than that the tax had actually produced in that year. This happened for instance in the tax year 1702-3 for the particular tax here analysed viz. the Fifth 4s. Aid and Subsidies.
Taking this detailed example in our hands we can now form a clear estimate of what the Lord Treasurer could lay his hands upon as effectual income, for the purpose of meeting the war expenditure for which the House of Commons quite honestly thought it had fully provided.
In the following table it must be understood that available revenue means
(a) balance of tax receipts of the preceding year's Supply left after all repayments of principal and interest.
(b)the gross total of all loans on War Supply available for the current year regardless of any and every mortgage or repayment liability saddled upon it.
These are the figures which we must put against the skeleton Votes of Supply on p. viii supra.
How did the harassed Lord Treasurer manage to make up for such a failure of realised Supply?
He first of all turned every revenue drawer or receptacle or bag upside down and inside out and when he had thus availed himself of every unappropriated penny of actual income he fell back on paper issues in the form of ficticious departmental loans.
For the year 1703-4, the year covered by the present volume of Calendar, the Treasury procedure can be detailed and followed to a penny : as follows
Net deficiency of war payments during the financial year 1704 (Michaelmas 1703 to Michaelmas 1704) as against war Supply voted and appropriated 91,451l. 4s. 0¾d.
In the Introduction p. xliv to the preceding volume of Calendar it was pointed out that in the tax year 1703 (Michaelmas 1702 to Michaelmas 1703) the Navy had gone short of its vote by nearly half a million.
In the tax year 1704 (Michaelmas 1703 to Michaelmas 1704), the year covered by the present instalment of Calendar, this process was continued and reproduced almost textually ; the Navy again went short by nearly half a million ; showing plainly that the land war on the continent was not starved. It was financed up to and beyond the actual figure of 1,720,500l. voted and appropriated for it. The brunt of the actual deficiency of realised supply fell on the Navy and on the home Establishment of Guards and Garrisons. They could be kept quiet and fed with promises ; whereas the army of mercenaries on the continent could not be fobbed off so.
Three years later the House of Commons called for an account of the growth of the Navy debt between the years 1702 and 1707. An account was accordingly prepared by William Lowndes, Secretary of the Treasury. It was presented to the House on the 27th November 1707 and is printed in the Journals C.J. XV, p. 441. The general drift of the account is corroborative of the conclusions reached in the present Introduction. The difference between Lowndes's figures and the figures deduced as above from the Revenue Return (Income and Expenditure) is due to the fact that Lowndes gives the figures of payments made by the Navy Treasurer to the Navy services, whereas the Revenue Return (Income and Expenditure) gives the moneys, orders and tallies issued by the Lord Treasurer to the Navy Treasurer. Whenever these two sets of figures diverge, the divergence can only be explained by the presence of paper orders in the hands of the Navy Treasurer at the close of his year's account. This figure can be ascertained from his Declared Account but actual comparison is made difficult by the fact that the Exchequer year (the finance year for the Treasury) ran from Michaelmas to Michaelmas whereas the Navy Treasurer's Declared Account year ran from January to December : so that it is almost impossible to equate the two sets of figures.
Lowndes's account as delivered in to the House of Commons in November 1707 is as follows. In reading it there must be a clear appreciation of the fact that it is not a statement of total Navy debt outstanding, but is only a statement of the yearly addition to Navy debt in consequence of the failure or deficiency of parliamentary Supply.
No sum was voted this year for the Navy Ordinary : so the charge thereof was taken out of the other heads in proportion.
Speaking very broadly it may be said that the chief source of all the embarrassments of national finance under William III and under Anne was the failure of yield in the one and sole available form of direct taxation viz. the Land Tax. Year after year the Revenue and Expenditure Return reveals the same fact and year after year the detailed business records of the Treasury as set out in this Calendar furnish the inevitable commentary of financial distress visible in every department of the public service.
In February 1707-8 the Agents for Taxes, (who were the precursors of the modern Inland Revenue Office) made a return to the House of Commons as to the Land Tax Receivers who were in arrears on their accounts. To this account (which is printed in the Commons Journals XV, p. 561) they affix the following Memorandum :
"that since her Majesty's happy accession to the throne there has been granted by Parliament in Land Taxes (exclusive of what was granted this session) the sum of 11,935,322l. 4s. 0d. : out of which there has been paid into the Exchequer 10,684,071l. 6s. 7d."
This brief statement means that in the Land Tax for the 5 tax years 1702-7 there had been a shortage of yield of 1,251,250l. 17s. 5d. or an annual average shortage of a quarter of a million.
If there had been a direct organic or mechanical or administrative inter-communication between the Treasury and the House of Commons, the Parliament would have been made aware of this deficiency automatically each year as it arose. But such a machinery simply did not exist. The Lord Treasurer sat in the House of Lords. He did not consider himself obliged to report ex officio to the House of Lords, and if he had done so it would only have raised a storm in the House of Commons. He was the servant only of the Crown and was obliged merely to report to the Crown in person or in the Privy Council. In the House of Commons he had no representative at all. William Lowndes was the Secretary to the Lord Treasurer but whenever he intervened in the House or whenever he was appealed to by the House he acted only in his capacity as a private member of the House—the Member for Seaford. And whenever the House called for Estimates or Accounts they called for them (through the Queen) direct from the department concerned, the Army, the Navy, the Ordnance, and so on. The Lord Treasurer might call for departmental estimates annually, if he liked ; and growingly and gradually he did so. But whenever he did so it was for his own convenience, to enable him to plan out his financial programme. He might have communicated such estimates to the House through the intermediation of William Lowndes but it was only on special occasions that he condescended to do it. As a rule the House called for estimates direct, e.g. for the Army Abroad from the Paymaster General ; for Guards and Garrisons from the Secretary at War ; for the Navy from the Navy Treasurer and so on and so on. And these officials submit the Estimates in person to the House as of and in an official capacity in each particular case.
In substance and in brief there was a complete lack of official, administrative or machine touch between the House and the Treasury ; and as a consequence the House was groping in the dark in the all important matter of tax yield. It did not know and could not guess what Deficiencies of yield were piling up upon its head, until the burden of Deficiencies became insupportable to the executive and then the cloud burst and the financial landscape was strewn with wreckage, and the political atmosphere smoked with recrimination.
And herein lurked a still more pernicious consequence. If all parties in the House had been patriotically concerned simply to find Supply for the war there would have been harmony and a rough and clumsy efficiency would have been evolved. The cross currents of political life, stronger than at any other period in English politics, prevented any such approximation and as a result financial issues became confused in political issues. The resultant degradation in political principles and the resultant loss in financial efficiency proved deplorable. All that can be said in palliation or in expiation is that Anne was treated better than William III ; and William III, Dutchman though he was, was treated better than had been his uncle Charles II whom the nation adored.
Before leaving the question of war supply and finance there is one technical question which calls for explanation viz. the method of pay of the foreign troops which were taken into Dutch and English pay.
The composition of the 40,000 men which formed the original English quota is explained in the Introduction p. xxxiv to the preceding volume of this Calendar. That body was entirely in English pay and the method of pay was by remittance to the Deputy Paymaster in the Low Countries, for the English or Subject Troops according to musters and for the Foreign Troops as for full pay without reference to musters.
In the case of the 20,000 Troops of Augmentation (which formed a composite but mainly mercenary body) the arrangement was different and more complicated and unsatisfactory. Queen Anne divided with the States General the responsibility for the pay of these Troops, half and half, so that in the British Treasury records this Force is always referred to as the 10,000 Troops of Augmentation. The various Treaties connected with the creation of this additional Force are printed in Lamberti Vol. II and in the Commons Journals Vol. XIV, pp. 215 seq. In the English text the Treaties appear to contain no stipulation as to Establishment pay but Lamberti gives the schedule of the skeleton establishment of a Regiment of Dragoons and a Regiment of Infantry.
The question of musters appears to be provided for by a stipulation that the Troops or Companies shall always be kept full and the Treaty with Saxe Gotha provides that the States' moiety of the pay should be on spot, the British moiety should be paid monthly. The routine throughout was for the Treasurer of the States General to send a certificate to the British Deputy Paymaster informing him that the States General had paid their moiety and thereupon the British Deputy Paymaster paid the British moiety. Whatever control there was or may have been of the actual payments, deductions, musters etc. apparently rested entirely in the hands of the Dutch.
The arrangement was extraordinarily slipshod and it is easy to understand what a loophole it gave to Treasurer Oxford in 1713 to challenge the numbers and figures of the moiety paid by the Dutch.
The treaties which provided for these contingents were as follows (all dates are new style) :
(1) between Great Britain and the States General 15 March 1703 providing for an Augmentation of 20,000 men.
(2) by the States General on behalf of the Queen of England and themselves and the Bishop and Prince of Munster 13 March 1703 for the hiring of 2,400 men in 3 Battalions of 800 men each.
(3) triangular between the said two Powers and the Duke of Holstein 15 March 1703 for the hire of 2 Regiments of Dragoons of 561 men each and 2 Regiments of Foot of 881 men each.
(4) triangular between the said two Powers and the Duke of Saxe Gotha 27 March 1703 for the hire of 2 Regiments of Dragoons of 440 men each and 2 Regiments of Foot of 854 men each.
(5) triangular between the said two Powers and the Landgrave of Hesse Cassel 31 March 1703 for the hire of one "old" Regiment of Foot of 870 men.
(6) triangular between the said two Powers and the Elector Palatine 17 May 1703 for the hire of 4 Regiments of Foot of in all 2,600 men.
(7) triangular between the said two Powers and the Elector and Duke of Brunswick Luneburg 16 November 1702 and 20 November 1703 for the hire of 700 Horse in 2 Regiments and 8,525 Foot in 11 Regiments.
The Troops of Augmentation therefore came to slightly over 20,000 men : as follows :
|Saxe Gotha||2,600 "|
|Hesse Cassel||870 "|
|Elector Palatine||2,600 "|
The Civil List.
A close study of the constitutional problem of the Civil List reveals a slow change of centre of gravity, a gradual drift of tendency. At the commencement of the process of evolution, say at the Restoration, Parliament was not merely unprepared to take a share in the executive administration of the country. It was wholly averse from any such idea. Even to go partners with the kingly executive, which Charles II offered more than once, would have thrown a new. strange, untried responsibility on the House of Commons, namely the responsibility of providing progressively for the cost or upkeep of the Civil Administration. And in its turn this change would have involved a new alignment of parliamentary politics. As long as the executive was entirely the King's own function and province just so long was the Parliament as a whole bound to criticise and scrutinise. The Parliament as a whole formed the Opposition and more than two generations had to pass before the idea of a parliamentary executive criticised by a parliamentary Opposition could emerge. When the process was complete the term Civil List had taken on quite a new meaning. It became confined to the maintenance of the royal state ; the whole civil administration was cut away from it and was provided for and controlled by Parliament and thereupon the parliamentary Opposition was directed against a parliamentary, not against a kingly, executive. Difficult as it is to date the final stages in this process of evolution, the earlier stages are now clearly marked and can be precisely defined. Under Charies II the Parliament provided at the outset of the reign a permanent standing revenue sufficient, as was thought, for the whole circle of national administration, naval, military, civil and regal. That financial arrangement was not an annual or periodic provision, subject to revision. It was permanent as it was intended to be. Any war provision stood quite outside it and was expected not to touch it.
The breakdown of this Restoration financial settlement was entirely a financial breakdown. The provision of revenue turned out to be illusory and inadequate. But the effects of the breakdown extended into the political sphere and Charles found himself at the mercy of a parliamentary opposition which scrupled neither to take French bribes nor to thwart a national foreign policy.
Under William III one decisive advance was achieved. The Army and Navy estimates were cut away from the Civil List provision ; parliament assumed responsibility for war finance and the problem of foreign policy ceased to be an opportunity for a disloyal opposition. But in the domestic field the situation if anything was rather worse for Wm. III than it had been for Charles II. He was a Dutchman and personally unpopular and it was an easy matter for a merely factious opposition to assume the role of a patriotic country party, a national party playing on anti-Dutch feeling. As a consequence he was treated worse than shabbily in the matter of civil government provision and the House of Commons was tricked and cajoled time and again into acts of positive dishonesty in its dealings with the King. As one item of the provision for the Civil administration it granted him the Customs. Then it saddled the Customs with a loan for the war and left the King to pay the interest on the loan. Then again it saddled the Hereditary Excise with an appropriation for the war ; whereas the Hereditary Excise was by direct parliamentary enactment inherent in the Crown of England for ever and legally could neither be granted nor touched nor taken away by any of William's parliaments. Finally it swept out of the King's hands the bulk of the Civil List revenue and devoted it to a sinking fund for the extinction of parliamentary Deficiencies ; and by way of recouping the Civil administration it granted a new corpus of revenue, including the Hereditary land revenues and feudal rights of the Crown as well as the Hereditary Excise—all which the Parliament had no right whatever to grant or to touch. At the time of the Act (9-10 Wm. III, c. 23) which made this provision for the Civil government it was supposed that the revenue so allocated would produce more than 700,000l. per an. and it was expressly declared and enacted in the said Act that any excess over 700,000l. per an. should go not to the Civil List but to public uses and be disposed of by Parliament. By this clause the House of Commons assumed from the Crown the property of (1) the Hereditary and Temporary Excise (2) the Post Office (3) the so called Small Branches (which included all the hereditary rights and revenues of the Crown. First Fruits and Tenths. Alienations, rents of lands. Duchy of Cornwall, the Four and a Half per cent. Duty. etc., etc.) subject only to a charge of 700,000l. per an. for the upkeep of the Civil Administration.
The Act itself professes to grant ways and means for 700,000l. a year for the Civil administration but it contains no guarantee of that annual sum. It is not stated that the House of Commons would make up any deficiency : and as long as William lived it did not make up such deficiency and after he died it dishonoured his Civil List debt to his servants and creditors. Moreover. apart from this question of a guarantee of income there is nowhere in the Act or in the journal proceedings connected with it any detailed and comprehensive estimate or statement of the total annual needs of the Civil administration.
As the term "Civil List" was conceived of or construed under Wm. III and under Anne it included the whole of what we should now call the Civil Service proper : the whole ambassadorial system : the whole pensions and bounties and secret service system ; as well as the expenses connected with the royal state which to-day are alone comprehended in the Civil List (Royal Household, Lord Chamberlain, Works, Privy Purse, etc.).
When Anne ascended the throne the provision made by this Act of 9-10 Wm. III, c. 23 was taken for granted and re-enacted en bloc, so that she started her reign with a wholly undefined Civil List Establishment for her expenditure and with an unguaranteed ways and means provision of a maximum 700,000l. per an. for her revenue. It will be seen from the figures below how wholly illusory was this ways and means provision. But there was one important difference between the attitude of Parliament towards her and its attitude towards William. She was popular, whereas William had been unpopular and herein we see the gradual shift of tendency, of centre of gravity. Under William the House of Commons refused partnership with him in Civil List matters and remained deaf to most of his appeals on behalf of her servants. The civil executive was his. Let him see to it. Under Anne the one man who had fostered that ten years estrangement and misunderstanding between Crown and Parliament had become her Lord Treasurer and the malicious ingenuity with which he had engineered that estrangement under William III was laid aside. He was obliged to come to the Queen's relief when the shortage of her Civil List revenue became at last intolerable. But it was not merely that history avenged herself when Robert Harley as Lord Treasurer Oxford promoted the Civil List Lottery Act of 1713. It was not merely that the tissue of falsehood and misrepresentation was rent which he had so cunningly woven round the whole subject of the Civil List. The action so taken, near the end of her reign, meant that Parliament had at last gone a second step further towards the harmonious solution of the problem of parliamentary participation in the Queen's administration.
The first step at the commencement of William's reign had been to relieve the Crown of responsibility for the military services. This second step was not taken until 1713 more than 20 years afterwards, so slowly did the English House of Commons grow to a sense of its own responsibility for the civil executive, so long drawn out was its own process of political education or conversion. so long did it take to lift the whole subject of the Civil List out of the realm of mere party politics.
During the first ten years of Anne's reign the revenues which had been assigned for the support of the Civil Government never once produced the promised 700,000l.
Their average yield for those years was only 590,999l. 6s. 4d. per an., so that for those 10 years one seventh part of the Civil Establishment had been on starvation diet. But the whole Civil List arrangement and organisation of the time was so uncoordinated that it would be nearly impossible to tell where the blow fell or where the pinch was felt. What, for instance, was the normal annual provision for the Privy Purse under William III and under Anne? It is impossible to say. Or again what was the normal full ambassadorial representation of England during that time and what was the normal annual cost, presuming all the Ambassadors etc. had been fully paid. Again it is impossible to say. But certain it is that the Privy Purse and the ambassadorial service were the first to feel the pinch even if we cannot state the result in bald figures of debts or of postponement of salaries.
Whilst therefore the following three tables of Civil List income and expenditure for the first years of Anne's reign gave us the actual figures to a penny so far as concerns disbursements and receipts, they afford no clue as to what the real annual deficit of the Civil List was or on whose heads it fell most cruelly. It might well be that the full Civil List establishment under all its heads called for more than 700,000l. per an. We do not know : because it was not estimated for. And not knowing the estimated full annual establishment we do not know the full actual annual shortage.
So much of an explanation is necessary as a preliminary to the understanding of the Civil List problem and to the correct construing of the tables here given.
Queen Anne's Civil List
The Commissoon of Accounts, 1702-3.
In the Introduction to Vols. XI-XVII of this Calendar, a separate section covering pp. clv-clxxxvi was devoted to the Commissioners of Accounts. During the reign of Wm. III not less than six of these Commissions were appointed in close succession. In their entirety they practically cover the first 8 years of the reign. The critical estimate there given of those Commissions shows that they foreshadowed or contained in embryo the modern Public Accounts Committee, but the spirit of faction and intrigue in which they were born and which animated their activity warped them from their proper function and thereby postponed for generations the evolution of the modern institution.
To-day the Public Accounts Committee is a nonpartisan, completely representative body devoted only to the scrutiny of appropriations. But in the reigns of William III and Queen Anne it was a frankly and furiously partisan body employed purposely to vilify such permanent officials as were obnoxious to the party which happened at the time to control the House of Commons.
Because of the general recognition of this furious partisanship under Wm. III the mere idea of a Commission of Accounts fell into disrepute and for the rest of his reign, from 1696 onwards, no further Commission was appointed. But towards the close of his life the Tory reaction which flared up over the impeachment of the four Whig Lords led to the resumption of agitation for a fresh Commission of Accounts ; and under the wily and unscrupulous leadership of Harley the agitation was made to subserve the purpose of a mere faction fight, of Commons versus Lords. William's life closed in a miasma of party strife and intrigue and the disrespect which was so unworthily shown to his memory was only the logical outcome of an agitation which was merely artificial and engineered.
When Anne ascended the throne the Parliament continued to sit for a further three months so that in the opening days of her reign she had to deal with the same explosive situation—a factious majority in the House of Commons with Harley as Speaker, determined to show every possible disrespect to William's ministry and memory, and a House of Lords solidly and bitterly hostile to the Commons' procedure.
It was in such an atmosphere that the first Commission of Accounts of Anne's reign was born. The Act 1 Anne c. 10, "for taking, examining and stating the public accounts of the Kingdom" had been introduced in the Commons on the 6th Jan. 1701-2 whilst William was still alive but was not seriously pressed forward until after his death. Within a fortnight of Anne's accession the consideration of the bill was resumed and it passed both Houses and received the royal assent in less than a month — on March 30, 1702. The seven Commissioners, all members of the House of Commons, were chosen by ballot on the 18th March as follows :—
|Francis Scobell||188 votes|
|William Bromley of Warwickshire||186 "|
|James Bridges||185 "|
|Harry St. John||184 "|
|Sir Godfrey Copley, bart.||182 "|
|Robert Byerley||182 "|
|Thomas Coke||181 "|
As so constituted the Commission ran for a twelvemonth from 25 March 1702 to 24 March 1702-3, when its place was taken by a fresh Commission, composed of almost but not quite the same members, who sat for the succeeding twelve months i.e. from 25 March 1703 to 24 March 1703-4. This second Commission was appointed by the Act 1 Anne St. 2, c. 19 "for taking, examining and stating the Public Accounts of the Kingdom," the bill for which was introduced in the Commons as early as November, 1702, but did not receive the royal assent until the 27th February following.
In the interval between these two bills the Parliament sitting at Anne's accession had been dissolved and the ensuing elections had resulted in a violently reactionary Tory House. The balloting for the membership of the Commission of Accounts which took place on the 7th January, 1702-3 shows the effects of the election.
|William Bromley||270 votes.|
|Thomas Coke||260 "|
|Sir Godfrey Copley||258 "|
|Robert Byerley||258 "|
|Henry St. John||254 "|
|Francis Scobell||233 "|
|Sir William Drake||135 "|
This is practically the same body as the first set of Commissioners save that James Brydges was omitted and his place taken by Sir William Drake. The reason for the change can be fairly easily surmised. Brydges was the only comparatively independent member of the first Commission. All the rest were High Fliers, Tories and friends of Harley. On the 2nd February, 1702-3 a clause was incorporated in the Bill for the second Commission (1 Anne St. 2 c. 19 as above) declaring that no Commissioner of Accounts should hold any employment of profit and under this clause Brydges was automatically disqualified as he had become a member of Prince George of Denmark's Council with a salary of 1,000l. a year.
But for this single change in personnel the two Commissions would have been identical and the second Act (1 Anne St. 2 c. 19), referred to above, would have been what it professed to be, simply a renewal of the first Act.
There is however no excuse for the way in which these two Commissions have been confused. The records concerning them are as follows :
(1) Public Record Office T 64/126 a folio volume containing the Minutes of the Commissioners from 10 Oct. 1702 to 24 March 1702-3. It is marked part 2, so presumably part 1 would contain the Minutes from 6 April 1702 to 10 Oct. 1702, but this part 1 is not known to exist.
(2) House of Commons, all the papers connected with the Commission, its reports etc. referred to in the Journals perished in the burning of the House of Parliament. Such as are entered in the Journals are indicated below.
(3) House of Lords : the two reports from the Commission are reprinted in the Calendar of House of Lords MSS Vol V. These are referred to below. The papers actually printed in the Journals are noticed below.
(4) (a) British Museum Addit. MSS 36859-36865 (the MSS of William Bromley of Baginton—the virtual chairman of both Commissions).
(4) (b) British Museum addit. MSS 17758-9
MS 17558 General State of Receipts and Issues of Public Revenue for the year from Michaelmas 1700 to Michaelmas 1701 and for the succeeding year from Michaelmas 1701 to Michaelmas 1702. MS 17559 the like State for the succeeding year from Michaelmas 1702 to Michaelmas 1703. These MSS likewise bear the bookplate of William Bromley but they came from his collection by a different route.
If the above tabular list is closely followed it is quite easy to separate the proceedings of the two commissions but dealing only with the two Reports as printed in Vol. V of the Calendar of House of Lords MSS it is by no means so easy. The litigious part of the proceedings and papers of the two Commissions run on as if there were no break between them and only a careful attention to chronological sequence enables the actual course of events to be traced. Briefly the sequence may be summarised as follows :
(1) 1702 Nov. 11 the [First] Commission presented to the House of Commons its first report in the form or under the title of "a narrative of the proceedings of the Commissioners." A practically identical Report was presented by them to the House of Lords on the 14 Nov. 1702 and a third identical copy was presented to the Queen, though the date of this last presentation is not stated. All the three versions of this initial Report are entered in extenso in B.M Addit. MS 36865, pp. 1-12, 13-26, 27-40 and the version which was presented to the House of Lords is reprinted verbatim in the above-quoted Calendar of House of Lords MSS, Vol. V, pp. 58-63. The copy presented to the Commons (virtually identical) is reprinted in the Journals C.J. XIV, pp. 27-30. This narrative consists entirely of an attack on the Earl of Ranelagh in the form of a narrative of the proceedings with him and concludes with a series of ten Observations on his accounts as Paymaster of the Forces.
(2) The House of Lords (16 November 1702) ordered that Ranelagh should have a copy of the above Narrative and Observations and should deliver in his answer on the 23 November. This date was subsequently extended to 27 November.
(3) On Monday the 30th November 1702 Ranelagh signed and gave in his 'Answer to the Commissioners' Narrative and Objections (sic for Observations).
The only existing original of this paper is contained in B.M. Addit. MS 36865 pp. 44-82, but the Commons version of it (practically identical) is printed in the Journals C.J. XIV, pp. 51-59.
In reply to the Commissioners' 'Narrative,' the Earl of Ranelagh gives his own narrative of their dealings with him by way of precept and interview but at the outset he makes emphatically clear the nature of his position. As Paymaster he was a servant or minister of the Crown [to-day we should say 'of the Executive'] and had no power to issue money save according to Army Establishments and Regulations of Subsistence, and as those were instruments reposing solely on the authority of the Crown or of the Treasury Lords as deputies of the Crown, so the same authority could vary or over-ride Establishments and Regulations and Instructions. The only binding thing that could not be over-ridden was an express Parliamentary appropriation and in the course of his defence the Earl of Ranelagh proved to conviction that he had not acted in contravention of any clearly expressed appropriation clause in any supply Bill. He then detailed the papers and accounts which he had laid before the Commissioners in obedience to their various precepts "so that he can safely say he made as much haste as possibly he could" to comply therewith. He objects to the Commissioners going back beyond 31 March 1692, because his accounts had been audited, passed and declared up to that date and all his vouchers for those declared accounts remained with the auditors, as was then the custom ; but after taking Counsel's advice he gave way and sent his ledgers for these preceding years to the Commissioners.
He then traverses the Commissioners' ten "Observations" and answers every single point which they raised. Some of his answers are extremely instructive as evidence of the method of the Army Paymaster's Office. For instance the Commissioners charged him with receiving interest on tallies which he paid away by assignment. To this he replies positively that he never received any such interest "but the said sum was received by the several persons to whom those tallies were assigned" and that the constant course both in the Army Pay Office and Navy Pay Office was for the Paymaster to write his name only on the back of the orders without any formal assignment "and that upon examination it appears that when the money due upon such orders hath been received at the Exchequer, acquittances have been written over the Paymaster's name, as if he had received both principal and interest."
On the point of delay in paying Regiments (Observation II) Ranelagh says "the private soldiers of a Regiment always receive by way of subsistence their full pay except that reserved for their clothing : and the clothing and subsistence of the noncommissioned Officers leaves but a small matter due to them, which if paid (as generally it is) before or upon their disbanding, there remains only a debt due to the commissioned Officers : for the payment of which, warrants are seldom or never prepared [by the Secretary at war on authority of the Treasury] until there is ready money to pay them, which many times there is not till a year or two after the disbanding. Witness the Regiments disbanded upon the peace of Ryswick. where only the subsistence was cleared to the common soldier and a bounty money given them and the noncommissioned officers being cleared and a bounty money given them also, which a small sum effected, the Commissioned Officers were left unpaid and so they are to this hour. there being no warrant to clear them, although it is full five years since they were disbanded."
The merely personal points involved in the remaining "Observations" were taken up by Ranelagh and answered fully, frankly and convincingly.
Having thus answered in detail the Commissioners' ten Observations the Earl of Ranelagh then turns to the succeeding part of the Commissioners narrative. This portion of Ranelagh's reply is as complete and clear a refutation as is the reply to the ten Observations and is here omitted only for the sake of brevity.
But there is one outstanding paragraph in this portion of the Reply which is absolutely crushing in its simple straightforward testimony.
The Commissioners assert that Ranclagh confessed he was not aware of the legal necessity of keeping a Register of Regimental accounts, and they asserted that there was no such Register kept.
Ranelagh's answer deserves to be given in full because of the light it throws on War Office Regimental accounting and because of the merciless exposure of the Commissioners' untruthfulness.
"To this paragraph the Paymaster answers that a precept was brought him to his Office dated the 13th of October last by two of the Commissioners of Accounts, by which he was required to permit the said two Commissioners to inspect such Office Books and Papers as they should think fit. Upon sight of this precept the Paymaster answered [sic ? assured] them of his readiness to comply with it. Upon this they asked him if he had kept such a Register of his Regimental Accounts as he was required to do by a clause in the Act 4-5 Wm. & Mary c. 13 for punishing Mutiny and Desertion and continued by several other Acts to the 10th of April, 1698.
To this he answered that pursuant to the clause aforesaid he had with great labour and pains made up all the said Regimental Accounts belonging to his Office from the 1st April 1692 to the 25th March 1699 : that he had given out the said Regimental accounts, so made up, to the several Colonels or their Agents, and that before he did so he had caused them all to be entered or registered in large Books prepared for that purpose.
Whereupon they desired to see those Books, which were immediately laid before them. And after they had inspected them some time and taken notice how fairly they were entered, they told him that he was obliged by the clause aforesaid to attest under his own hand or that of his Deputies that each Regimental account as entered was a true account.
To this the Paymaster answered that he or his deputy had signed all the original accounts delivered as aforesaid to the several Colonels or their agents, and that having done so he thought there was very little need of signing the copies of them entered in those Books. And when they replied to this that the aforesaid clause required such signing he told them he had not read that clause for a long time but that he would read it before he slept and that he thought he had complied fully with the intention of it by signing the original accounts given out to the Colonels or Agents : and if it was thought necessary he would have the several entries of them signed by such of his clerks as had both entered and examined them.
After this they asked him whether he had made up such Regimental accounts pursuant to the like clause passed in another Act of the last sessions against mutiny and desertion. To which he answered that he had not as yet much minded that clause, thinking there was no great need of it : since the Forces under his care were now paid regularly as soon as the rolls for any muster were brought into his Office. And that though the letter of this last clause had not been as yet exactly complied with yet he had the vouchers and warrants belonging to each Regiment from Xmas last ready to show them, though that last clause was to take effect only from the 1st of March last."
The Commissioners" "Reply" to the above 'Answer' from the Earl of Ranelagh was delivered in to the House of Commons by Sir Godfrey Copley, one of the Commissioners, on the 3rd December 1702. This Reply is printed in the Commons Journals XIV, p. 66. The only surviving MS original is in Addit. MS 36865, pp. 83-88. This "Reply" does not attempt to answer the Earl. 'For the avoiding prolixity' the Commissioners evade a direct joining of issue with him but characteristically charge him with evasion ; and, acting in the same intractable spirit, the House of Commons Resolved 4 days later (Dec. 7, 1702, C.J. XIV, p. 70) that the Commissioners had very good grounds for their observations and had made them good : and that all privy seals and Treasury orders and warrants for applying army moneys to other than army uses are illegal and void ; and similarly that all privy seals or warrants to the Auditors of Imprests to pass accounts without proper vouchers are illegal and void. Finally the House resolved that the Paymaster of the Army had misapplied several sums of the public money.
Up to this point the proceedings of the Commissioners had concerned only the Paymaster of the Army. It will be seen in the sequel that it was the only part of the Commissioners' proceedings which resulted in any improvement of Departmental machinery. At the same time it affords an acid test of the impartiality or otherwise of the Commissioners of Accounts and of the House of Commons.
The subsequent course of the Commission's proceedings can be summarised more briefly. On the 15th January 1702-3 Mr. Gregory King, the Secretary of the Commissioners of Accounts, delivered at the bar of the House of Lords an accompt of the General State of the Receipts and Issues of the Public revenue for the two separate years Mich. 1700—Mich. 1701 and Mich. 1701 to Mich. 1702 with the Commissioners' Observations thereon. These Observations are preserved in B.M. Addit. MS 36865, pp. 93-108 and the General State itself is preserved in B.M. Addit. MSS 17758-9. The same material was presented to the House of Commons on the 18th January by Henry St. John, a member of the Commission.
When it came to debate the Commissioners" second set of Observations" on the 25th January 1702-3, C.J. XIV, pp. 130-132 the House of Commons showed the same intractable spirit which it had already displayed against the Earl of Ranelagh. It accepted without scrutiny the Commissioners' tabular statement of loans on supply between February and June 1701 (C.J. XIV. p. 150) and as this statement seemed to show a balance transfer to a precedent loan Register, the House adopted the false inference drawn by the Commissioners that the balance in question represented loans unnecessarily taken in or incurred. Thereupon the House of Commons resolved "that the borrowing of money and striking tallies with interest unnecessarily before the public occasions required the same have been one reason for the great debt lying upon the nation."
The answer to this Resolution is simple. Whenever in grants of Supply the House of Commons authorised loans on Supply it generally added a guarantee clause to the effect that if the Supply so granted proved insufficient to pay off the loans so authorised then the deficiency was to be transferred to and made a first charge upon the next Aid or Supply to be granted by Parliament. Such a transfer was therefore not merely automatic and obligatory but the amount transferred was to rank first on the Loan Register of the new Supply.
All this procedure was quite well known to the experienced members of the House and there was no excuse for this Resolution.
Then the Commons passed to the question of the 25 per cent. Duty on French goods. The Act which imposed this Duty (7-8 Wm III. c. 20) contained no appropriation clause and neither the title nor the preamble of the Act contained any statement of purpose. But the body of the Act declared that the Duty was to be collected as by the Act of 12 Car. II c. 4—the primordial grant of the Subsidy of Tonnage and Poundage. This clause might be understood as devoting the 25% Duty to the Civil List. But the House chose to regard the Civil List as already fully provided for and thereupon decided that the application of the money to the Civil List was illegal.
Resolved : that the applying of the public money to the use of the Civil List which was otherwise provided for, is another cause of the great debt which lies upon the nation (C.J. XIV, p. 132).
This Resolution implies that the Civil List was fully provided for—which as has been seen above, p. xxvi, was a most false statement and that the Duty granted was intended to be public money and not Civil List money— an inference which is not justified by the wording of the Act. Therefore the Resolution of the House on this occasion was based on two demonstrably false premises. Yet even so, the Commissioners' own figures showed that out of 161,349l. proceeds of the Duty over 125,000l. had been applied to the Army and Navy.
Following this, the Commons turned to the Commissioners' complaints against the Customs Accounts (see the Customs Commissioners' reply to the "Observations" reprinted in the Journals C.J. XIV, pp. 132-138. The original MS text is Addit, MS 36865, pp. 113-125) ; to the auditors' certificate of accounts (C.J. XIV, 140, 26 Jan. 1702-3) ; to the examination of Tellers' vouchers (27 Jan. ibid. 143) and to the Stamp Duty accounts (ibid. 167, 29 Jan).
Finally on the 9th February the House of Commons drew up an Address to the Queen in which they reiterated all the charges of the Commissioners of Accounts absolutely regardless of the shattering replies and disproof to which they had been subjected.
It would be difficult to find in Parliamentary history an Address so factious in its spirit or so untruthful and misleading in its recital. But still more remarkable is its inconsistency and inconsequence. It attributes to the Treasury a general dishonesty and mismanagement of revenue and remissness in performance of duty "which was principally owing to some of the great officers of the Treasury who being more intent on their own private profit than the due execution of their public trusts did neither discharge the duties of their own places nor take care that the subordinate officers should discharge theirs.
This paragraph was directed against Charles Montagu, Auditor of the Receipt, who was particularly obnoxious to Robert Harley. As chancellor of the Exchequer in 1696 Charles Montagu had saved England from the ghastly catastrophe of Harley's Land Bank scheme, just as a generation later Walpole was called upon to save England from the still ghastlier catastrophe of Harley's South Sea Company scheme. The venom with which Harley pursued Montagu stooped to anything and stopped at nothing. But after having blasted William's Treasury by the words just quoted the Address to the Queen proceeds as follows :
"But here we cannot in justice omit to acknowledge the present good management of the Treasury. whereby for the honour of your Government and the advantage of the whole nation no unnecessary tallies with interest are permitted to be struck, nor more money at any time borrowed than the necessaries of the nation do require : and care is taken for supporting the credit of the course of the Navy Victualling and other public offices that all stores and provisions are in good measure provided with as great advantage to the public as if the same were purchased with ready money" ... and so on and so on.
Could anything be more self-stultifying or more reprehensible than this instantaneous change of tone. from blame to praise. For not a single man had been discharged or displaced from the Treasury and not a single change had been made in the office routine or machinery of either the Treasury or the Exchequer.
After labouring the point of Montagu's (Lord
Halifax's failure to transmit the Imprest Rolls half
yearly to the King's Remembrancer the Address asserts
"We have great reason to believe that the damage to the public by this neglect of the said auditor and his predecessor may amount to several millions of money."
Then referring to the fee which the Treasury had
sanctioned in order to cover the increased clerical work
in the Auditor's office the Address proceeds
"the said auditor hath received several sums of money to his own use contrary to law and the trust reposed in him . . and we earnestly desire your Majesty may be pleased to order your Attorney General effectually to prosecute at law the said Auditor of the Receipt."
After enumerating the accountants who were behind
in the passing of their accounts, and the evils of "the
mysterious trade upon tallies and Exchequer Bills"
the address refers to the Earl of Ranelagh in these
the late Paymaster of your Majesty's Forces, by whom a considerable part of the money which came to his hands, and which ought not to have been applied to any other purpose than the payment of the army, hath been diverted to his own and other private uses.
This point blank assertion of embezzlement was made after Ranelagh had frankly and fully explained and convincingly answered every one of the Commissioners' first set of "Observations" —so convincingly indeed that the Commissioners made no attempt to controvert his answer. After being in office for 17 years as Paymaster General he died poor "an office which during the said Paymaster's management has received and paid more than 21 millions without any reflection upon it."
These words in Ranelagh's Answers fell on deaf ears, so incredibly embittered was the party strife of the moment. But to this day his words have not been controverted.
The whole purpose of the House of Commons Address was to vilify the late King William's administration and certain of his ministers as the unhappy cause and instrument "which appear to us to have brought this heavy burden upon us." the burden being a vast debt of many millions. In defence of this untenable position the Commons' Address makes two assertions which if true would have been of crucial importance.
(1) "The great debt which lies upon the nation and all the arrears which are owing to your Majesty's Forces do not arise so much from the Deficiencies of the Funds as for want of care in the management and fidelity in the application of them."
(2) "Though your Commons (who were always ready to support the dignity of the Crown) had amply provided all those sums which (according to the largest estimates laid before them) were thought necessary for the occasions of the Civil List. yet over and above the said sums and out of the Aids given by Parliament (which by the law of England are appropriated and ought to have been employed to the common profit of the whole nation) many large sums of money, during the time of such heavy taxes upon the people, have been diverted under the head of secret services and for salaries, bounties and pensions to private persons which (if proper to be paid at all) ought to have been supplied out of the Civil List."
The answer to the untruth of these two paragraphs is contained in every page of this Calendar of Treasury Records.
Let me summarise the evidence which it yields.
(1) Deficiencies of Supply.
In William's reign the Parliament had been compelled by the sheer logic of figures to pass two bills to make up for the declared and proven deficiency of supply. The first Bill (8-9 Wm. III. c. 20) provided for a realised, proven and accepted Deficiency of 5,160,459l. 14s. 9¼d. The second Bill (1 Anne c. 7) provided for a proven and accepted Deficiency of 2,338,628l. 15s. 5¾d. Taken together these two Acts show that the House of Commons confessed and acknowledged that the supply which it has granted for national (not for Civil List) needs under William III had failed to produce the estimated or expected yield by a sum of 7,499,088l. 10s. 3d.
Furthermore at the time when the House of Commons adopted this Address of 11 Feb. 1702-3, the Deficiency of Supply was proceeding at an accelerated pace and before another 6 years passed it was destined to result in a Deficiencies Bill which exceeded in amount the total of Declared Deficiencies for the whole of William's reign. The Deficiencies Act of 9 Anne c. 15, promoted by Robert Harley, the author of this Address of February 1702-3, provided for Deficiencies of 8,971,325l.
This Deficiency of Supply and nothing else was the cause of the growth of debt and of all the troubles of the Treasury administration, and when the February 1702-3 Address passed the House of Commons no one knew better than Harley did how the House had been misled and deceived.
(2) Civil List Supply.
From the commencement of William's reign the provision for the Civil List had been inadequate. There were periods in his reign when natural good feeling prevailed over the intense prejudice against him as a Dutchman and when there was a possibility of a fair adjustment between Civil List income and expenditure. But on each occasion such prospects of accommodation were wrecked by the intrigues of a party which aired itself as the patriotic or country party and which pandered to anti-Dutch feeling. That party's propaganda was engineered by Robert Harley and the two chief instruments which he employed were in the first place the successive Commissions of Public Accounts and in the second place the positively dishonest series of measures dealing with the Civil List revenue. Many chapters of the Introductions to the present Calendar of Treasury Records have been devoted to the elucidation of the serpentine cunning and deceit by which Harley robbed the Crown or the Civil Administration of portions of the Customs and Hereditary Excise by loading them with preferential appropriations for the war or for public service. The net result of this process was that at the end of William's life the debt on the Civil List amounted to over 800,000l., a debt which the House of Commons dishonoured, although it was solely responsible for the debt. Under Queen Anne the same process produced a Civil List debt of over a million sterling by Michaelmas 1712. But as she was popular and as Harley was then in power as Lord Treasurer the House of Commons by the Civil List Lottery Act gave her permission to raise 500,000l. by mortgaging her Civil List revenue. The assertion therefore in the Commons Address of February 1702-3 that money granted by Parliament for public uses had been perverted to Civil List uses was doubly untrue. The exact opposite was the case. Money or sources of income granted for support of the Civil Government had been perverted by fraudulent appropriation to war purposes, and in addition to this Wm. III had frequently and of his own free will postponed his Civil List demands to the military needs and Queen Anne began her reign by a free gift of 100,000l. out of her Civil List to the war with France.
The wretched story of party intrigue and passion which centres round this 1703-4 Commission of Accounts did not end with the Commons Address of February 1702-3. That Address gave expression to only one half of the concerted plan of the so called patriotic party. The other half was devoted to the perpetuation of that quarrel between the two Houses which had risen to white heat in 1700-1 and which the accession of Anne had failed to compose.
But in this phase of the action the Commons were decidedly worsted. They called in question the title of the Lords to enquire into accounts. They claimed the sole right of nominating the Commissioners of Accounts and that the condemnation of officials by the Lower House should not be challenged by the Lords.
On every one of these points the House of Lords maintained their position and in the actual examination of the disputed accounts they taught the Commons a lesson of fairness.
The quarrel between the two Houses did not begin over the Earl of Ranelagh, for the reason that Ranelagh's Reply to the Commissioners' 'Narrative' and 'Observations' of 14 November 1702 was not ready until the end of November and a good part of December was taken up with the quarrel over the Occasional Conformity Bill. As a consequence the first definite clash between the two Houses on the subject of accounts arose on the Commissioners' second set of 'Observations' which were delivered on the 2nd February 1702-3 (see p. 1 supra).
In dealing with this second set of 'Observations' the House of Lords turned first to the defence of Charles, Lord Halifax, Auditor of the Receipt, against the charge of not transmitting imprest rolls to the King's Remembrancer. For the subject of Exchequer history the point is very interesting although technical but the Lords' defence and decision in Halifax's favour (L.J. XVII, 270-1, 5 Feb.) was perfectly sound and just. Their semi-official acquittal of Halifax so irritated the lower House that at this point the House of Commons tried to side-track the investigation by calling in question the right of the House of Lords to take cognizance of accounts originally (L.J. XVII, 267, 292, 294).
In reply to this party manoeuvre the Lords voted (18 Feb. 1702-3, L.J. XVII, 296) that the House of Lords have an undoubted right to take cognizance originally of all public accounts and to enquire into misapplications or defaults and in the matter of Lord Halifax they have proceeded according to the rules of justice ; and further that in the conference between the two Houses on this subject the House of Commons have used unparliamentary expressions and arguments tending to destroy all good correspondence between the two Houses and to subvert the constitution.
Within five days of this challenging and unanswerable Resolution the House of Lords (L.J. XVII. 301-4, 23 Feb. 1702-3) read and adopted from its own Committee a report covering the Book of Accounts and the second set (the 1702-3 Feb. 2 set) of Observations received from the Commissioners of Accounts. This report is printed in extense in the Lords Journals and is a model of fairness. It agrees fully with the Accounts Commissioners on the subject of the long delay in Declaring the Navy Treasurer's accounts, and of the unsatisfactory method of checking the 'voluntary charge' item of the Army Paymaster's account. ("The House of Lords Committee agree and think there should be a Comptroller of Paymaster's accounts to certify deductions from pay etc.") but on the other purely factious "Observations" of the Commissioners (viz. on the subject of interest on tallies of loans and of Civil List appropriations) the Lords committee put forward a calm and illuminating refutation of the Commissioners' case.
Having reached this point the Lords summarised the results of their investigations and presented their own Address to the Queen (Feb. 25. 1702-3) and thereupon ordered the proceedings of their Committee and the whole of the papers exhibited to it to be printed and published. The publication forms a folio book of 82 pages closely printed and dated 1702. It contains all the papers which the Lords Committee had received and reviewed, viz. their own and the Accounts Commissioners' reports, the Accounts and "Observations" and explanations thereof : certificates of loans : Army lists and accounts, abstracts of Deficiencies : the issues out of the 25 per cent. Duty on French goods : the issues out of Seizures : the sums issued for the use of the war out of the revenues of the Civil List : the Tax Commissioners account of the arrears of taxes : the Stamp Commissioners reply to the Lords : and finally the Customs Commissioners reply to the Accounts Commissioners Observations.
The abstract of Deficiencies is particularly valuable. It is as follows (omitting the detailed figures and giving here only the totals).
|A computation of the charge for Land and Sea Services from 5 November 1688 to 31 December 1697 and how much thereof hath been out of the [Crown or Civil List] Revenues and how much out of new Supplies.|
|1688 November 5 to 1690||Total War charge.||Paid out of Parliamentary Supplies||Paid out of the King's Revenue.||Deficiency.|
|For the year :||Supply voted for the War.||Supply realised.|
|An account of the sums issued out of the Excise, Customs and other branches of the Civil List to the use of the War during the late [Wm. III's] reign :|
|Total paid out of the above sources of the King's revenue.|
|to the Navy||588,372||4||5¼|
|to the Ordnance||208,693||5||3|
|to the Earl of Ranelagh's Forces||1,466,416||12||7¼|
|for reducing Ireland||582,898||12||2½|
|(fn. 1) Total||£2,846,380||14||6½|
Within three days of the adoption of the Lords' Committee's Report the Parliament was prorogued and it did not meet again until November 1703.
In the interim the Executive had taken to heart the results of the investigations of the Commissioners of Accounts on the subjects of the voluntary charge item in the Army Paymaster's accounts (covering accounts of deductions of poundage etc.) ; the inspection of muster rolls and the inspection of regimental accounts. To perform these new duties a special piece of office machinery was invented viz. the Comptrollers of Army Accounts. This institution which had been suggested by the Lords, not by the Commons, was created by a royal warrant dated 10 June 1703 and its Instructions were set out in a sign manual of the 26th of the same month (see Tr. Cal. XVIII. pp. 300. 315-16). With the exception of the subject of sub-imprests in the Paymaster General's accounts, the Comptrollers of Army Accounts were fitted with sufficient powers to prevent any future complaints as to muster rolls, deductions, clothing contracts and regimental clearings, all of these being subjects of immediate practical importance and utility for the process of national accounting.
But quite regardless of this improvement of the machinery of Army accounting, the party strife between the two Houses on the subject of the Commissioners' Narrative and Observations flared up once more with the reassembly of Parliament in November 1703.
Between the 17th December 1703 and the 2 February 1703-4 a long series of papers and accounts was presented to the Lords including the Commissioners' full Report (22 Jan. 1703-4) and the supporting papers and exhibits (29 Jan.) and during the course of the following month of February the various persons accused or implicated in the Commissioners' Report laid before the Lords their separate and respective answers to the Commissioners' Observations (10 February—6 March 1703-4). Whilst the Lords' Committee was still engaged on the consideration of the subject the House of Commons on the 2nd March sent up a Bill for renewing the commission of accounts for a third year 1704-5 with some change in the Commissioners' names. As ballotted for in the House of Commons the new Commissioners proposed were :
|Sir William Drake||261 votes.|
|Francis Scobell||250 "|
|William Bromley||195 "|
|Robert Byerly||193 "|
|Heny Pinnell||180 "|
|Sir Godfrey Copley||171 "|
|The Honble. Arthur Annesley||159 "|
This time the Lords took decisive action. Information had been brought to them that Robert Byerly formerly Colonel of the 7th Regiment of Horse had not cleared his Regiment before handing it over to his successor Brigadier Hugh Wyndham. Deservedly treating him as a delinquent accountant the Lords struck his name out of the proposed new Commission and at the same time (March 16) resolved to nominate some other to be Commissioner in his place and also to nominate two other persons as Commissioners "none of these three to be of either House or in public employ." On the following day March 17 they ballotted for the three names and selected Sir John Houblon, Sir William Scawen and Francis Eyles. On the 21st March they returned the Bill so amended to the Commons. The lower House declined to accept the amendments and two conferences were held on the 27th March and 3 April 1704 without result, just before the Parliament was adjourned.
When the Houses re-assembled on Oct. 24 following 1704 nothing more was heard of the Commission of Accounts or of its reports and papers.
In the interim of this prorogation Robert Harley had been made Secretary of State (18 May 1704) and so long as he remained in office (until 15 Feb. 1708) he wrapped in a napkin the political weapon which he had forged and secretly employed with such deadly effect against Wm. III in 1696-7 and 1700-1 and then once more against the Whigs in 1702-3. This weapon was only resuscitated and brought back into play after Harley had been driven into opposition and when he was again riding the wave of Tory reaction and wanted to wreak his political vengeance on his falling and fallen foes. But in the spring of 1704 he did not emerge quite so scatheless from the strife. Before the prorogation which then took place the Lords had blasted the reputation of Robert Byerly as one of the Commissioners of Accounts and furthermore in their calm and reasonable survey of the Commissioners' "Observations" they had mercilessly exposed the Commissioners' mistakes, false innuendoes and partiality.
The first point, regarding the Lords' determination to strike Byerly's name out of the new Bill for the Commissioners of Accounts is expounded in the reasons which they submitted during the conference of the 3rd April 1704 with the House of Commons. This paper is as follows :
The Lords observe that the Commons in justification of their disagreement with the Lords offer again the same reasons which they made use of in 1691 and which they know had then no weight with the Lords (L.J. XVII. 558-60. 3 April 1704).
(1) In the Act of 19 Car. II for taking the public accounts the Commissioners were named by the Commons, which the Lords agreed to as not being members of the House of Commons and therefore available to the Lords for explanation etc. But since, the Commissioners have been all members of the House of Commons and the Lords cannot have their assistance, the Commons refusing permission to them to attend the Lords "such leave being particularly denied this session."
(2) The Lords insist on their undoubted right of taking and examining all accounts of public money.
(3) The Lords have, to their great surprise, found many great errors and mistakes in the Observations of the Commissioners.
(4) The Commons' claim that no commoner could be named for any public employment unless by the House of Commons is an assertion without any foundation and contrary to a multitude of precedents.
(5) The Commons object that the Lords have agreed to several Bills wherein the Commissioners for Public Accounts were named solely by the House of Commons. The Lords answer that they did not foresee the great inconveniences that might arise thereby so fully as has of late appeared by experience. They further say "that there having been many years reports raised and with much industry spread abroad that great sums of money have been misapplied or embezzled and converted to the advantage of private persons, the Lords were willing to put that matter into any method of examination that might most conduce to the discovery of such abuses, and because it was imagined that persons in great stations were concerned who might baffle the enquiry of any but members of the House of Commons, the Lords agreed to such Commissioners in order to make the experiment, but never intended thereby to depart from any right. And the Commissioners having not in so many years detected any considerable fraud or abuse as was expected from them, the Lords think it was absolutely necessary to add some others." ... As to Col. Bierly he was disqualified by the Commons' own rule, as being accomptable to her Majesty. That he was so accomptable appeared to the Lords in this manner. Isaac Tarry and William Nicholson petitioned the Lords on behalf of themselves and others soldiers of the Regiment of Horse commanded by Major General Wyndham, formerly by Col. Bierly, complaining that there was due to them a considerable arrear and praying that Col. Byerly may be obliged to accompt with the said Regiment. On enquiry the Lords find Bierly stood charged with 28,277l. 2s. 9½d., and discharged himself no more than 22,641l. 10s. 11¼d. so that he is still accomptable for 5,585l. 11s. 9¾d.
Nothing of this appeared to the Lords when he was named in the former Bills and there is reason to believe that he might have made use of his authority as a Commissioner of Accounts to cover his neglect in accompting. For his was the only Regiment whose accompts were not adjusted : and since his name was left out of the Bill [by us the Lords] more has been done towards settling the account than in many years before.
The second point being in effect the concluding and convincing critical survey by the Lords of the whole of the Commissioners' proceedings is comprehended in the Lords' Committee report of 24 March 1703-4 (L.J. XVII. pp. 512-23) already referred to. The outstanding feature of this report is the clear exposition of the difficulty attending the Declaring of the Navy Treasurer's Account and of the problem of accruing interest on tallies and orders.
On this highly technical and difficult subject the Lords Committee pronounces as follows :
Their Lordships [Committee] also took into consideration the charge of interest on tallies and orders upon the late Treasurer of the Navy mentioned in the 9th Observation of the said Commissioners, p. 26. and the answer of the said Treasurer to the said Observation with his Reply to the said charge of interest, thereunto annexed.
And the Committee being very desirous to be fully informed in that matter examined some of the Commissioners of the Navy, and dealers with the Navy, and others upon oath, videlicet Sir Richard Haddock. Kt., Comptroller of the Navy. Dennis Lyddell. Comptroller of the Accompts of the Treasurer of the Navy. Sir Wm. Gore, Kt. and Alderman. Sir Stephen Evance, Kt., Mr. Peter Joy, Mr. Ambrose Crowley, Mr. John Bellamy and several other persons.
And it appeared to the Committee as followeth :
(1) that the Navy Board in their assignments on bills always directed out of what tallies and orders the said bills should be paid.
(2) that the arrear of interest due on tallies and orders at the time of such assignments ought to be allowed and paid by the Treasurer of the Navy to the persons entitled to receive the tallies and orders, excepting where the said Navy Board's assignments on bills directed otherwise.
(3) that it is now the custom and practice in the Navy to allow and pay the arrear of interest due on the tallies and orders directed and assigned to be paid away by the said Navy Board as before.
(4) that the dealers with the Navy etc. did receive from the late Treasurer of the Navy or his instruments the tallies and orders without allowing or making any discount or abatement of the arrear of interest due from the [issue] dates of tallies and orders to the time they [the dealers] received them, excepting where the said Navy Board's assignments on the bills directed otherwise.
(5) that the said dealers with the Navy etc. received the orders of the tallies with the [Navy] Treasurer or his instruments' [agent's or deputy's] name to a blank on the back of them until the late Act of Parliament for registering tallies and orders.
And therefore their Lordships are of opinion that since the interest on the tallies and orders did belong (except where the said Navy Board gave directions to the contrary) to such persons as had a right to receive them from the late Treasurer of the Navy, and that the said interest was [so actually] received by them or their assigns, it cannot be reasonable to make the late Treasurer of the Navy or his instruments liable to accompt for the interest on any tallies and orders paid away pursuant to the directions and assignments of the said Navy Board, though they were issued and paid away with the said Treasurer's or his instrument's name to a blank on the back of the orders of Tallies.
Their Lordships are further of opinion that, in justice, some method ought to be found out for the auditor's passing the said Treasurer's ultimate account, especially since the difficulties in stating the interest accompts (as is observed by the said Commissioners) makes it evident he cannot otherwise pass that accompt in many years.
But after every just and deserved condemnation has been passed upon the 1702-4 Commission of Accounts it still remains true that wittingly or not the Commissioners had approached and outlined or adumbrated the one serious problem of public accounting in the Exchequer system of the time. That problem was the difficulty of bringing sub-accountants to book. Take for instance the Paymaster of the Forces. He had deputies, i.e. deputy Paymasters, in Flanders. Portugal, and Spain. He made payments of treaty subsidy through recognised agents or attorneys to foreign princes or powers in Savoy. Denmark, Holland, the Palatinate, various other German states and Portugal. Furthermore he made payments on account to the agents of individual Regiments or Colonels. How could these various Deputies or sub-paymasters or attorneys or sub-accountants be compelled to account for the moneys paid to them as imprests or sub-imprests? The only way in which the Exchequer audit system could accomplish this was by means of an ipsum or super, which simply meant that the auditors of Imprests charged the sub-accountant with the sums so sub-imprested. But the mechanism did not exist whereby the sub-accountant could thereupon be accepted as a direct or prime or principal accountant against whom the King's Remembrancer could issue Exchequer process to compel him to account. This solution would have been simple if the Auditors of Imprests had been empowered to award supers and to institute or set up a fresh charge at their discretion.
But such a function is not the duty of any auditor. The whole Exchequer Audit system of the time was dead against any idea of letting off a chief accomptant and saddling a sub-accomptant in his place.
The result was that in nine cases out of ten the principal accomptant was left to tackle his sub-accountants as best he could without the aid of Exchequer process, and the inevitable outcome was that the sub-accountants never accounted at all and consequently the sub-imprests remained undischarged not merely from year to year but literally for ever. They were carried forward year after year as part of the uncleared charge in each successive annual account until from their mere bulk they became an intolerable nuisance. Then they were ticketed as 'desperate debts' and finally written off by authority of a privy seal ad hoc. But whereas in a trading Company a writing off is an acknowledgement of a loss, in the national accounts it was almost invariably merely an acknowledgement that the formalities of audit had not been strictly and meticulously complied with.
The Earl of Ranelagh's army accounts are a conspicuous example of this procedure. He quitted office in 1702 and at his death in 1712 his accounts were still carrying undischarged 'Remains' of over 5 millions sterling. His daughter impoverished herself by a life-long solicitation of her father's accounts, struggling with sub-imprests. Twenty-five years after the Earl's death four and a half millions of these sub-imprests were accounted for to the satisfaction of the Audit Office and a further account as to so much was declared in September 1737, leaving still a sum of 2 millions sterling of sub-imprests outstanding, not being properly cleared or accounted for. This charge against Ranelagh was carried forward until the year 1790—nearly 80 years after Ranelagh's death, when the sum was written off by virtue of a royal sign manual which directed the clearing of all insupers in army accounts prior to 25 December 1743.
Such a writing off did not indicate a loss. It simply removed an incumbrance from the army accounts. The money had not been lost. It had been spent as directed by vote of the House of Commons. The expenditure was covered by sub-imprests which were still outstanding from the years 1689-1702. These sub-imprests accounted for the final item of "Remains" to a farthing and they are enumerated on each of Ranelagh's successive accounts, but the vouchers for the payments were not in the form or of the nature which the Auditors of Imprests could pass, unless specifically authorised by royal warrant to do so. In the body of the Treasury Calendar there are many instances of such royal warrants (see for example vol. XII pp. 313-4, vol. XXIV pp. 278-280, vol. XXI pp. 383-396) and each one is instructive in its recital. The Earl of Ranelagh was only unlucky in that he died before he could so far perfect his final account as to obtain his clearing and quietus by such a royal warrant. As a consequence partly of this fact and partly of the vicious and unjustifiable attack upon him by the 1702-4 Commissioners of Accounts, Ranelagh's name has gone down to history as the particular example of a rascally Army Paymaster General—a verdict of history which is wholly untrue and most unmerited.