The Industrial Revolution, which began in the middle of the eighteenth century transformed the nation’s need for money. People living off the land in rural Britain had been largely self-sufficient. They grew their own food, made their own clothes and bartered with their neighbours for everything else. However, as more and more people streamed into the new urban areas looking for work in the factories, so the need for good quality money to pay their wages became acute.
For most of King George III’s reign, British coinage was in a desperately poor state, with very few coins being produced and the market flooded with badly worn coins, tokens, foreign currencies and counterfeits. A population explosion between 1750 and 1800 did not help matters, putting additional pressure on the already inadequate coinage.
Fortunately, the King’s final years would witness a transformation in the nation’s coinage that would not be seen again until decimalisation in 1971.
The Northumberland Shilling
The production of silver coins slowed to a trickle during the eighteenth century and they rarely appeared in day to day transactions. A shortage of silver led to the metal price becoming more costly than the face value of coins made from it. Consequently, there was no incentive for the Treasury to strike silver coins despite urgent appeals from the public to do so. Any coins that did appear were unlikely to spend long in circulation, being either hoarded or quickly melted down for their higher bullion value.
In 1763 a batch of silver shillings were struck for Hugh Percy, 1st Duke of Northumberland, who had been appointed Lord Lieutenant of Ireland. He wanted to make an impression when he arrived in Dublin with his family in October 1763. To do this he had 2,000 new shillings struck, which he threw into the crowds that lined the streets to welcome him. The extravagant gesture cost him £100 but guaranteed him an enthusiastic reception, and the 1763 shilling would forever be known as the Northumberland Shilling.
From records kept at the time, we know the Royal Mint struck more silver in 1763 than the 2,000 shillings required by the Duke to ingratiate himself with the people of Ireland. Any coins that were produced were a drop in the ocean compared to what was actually needed. Shillings would not be struck again until 1787.
During the first decade of the new King’s reign, the number of counterfeit copper coins in circulation increased dramatically. To combat this, in 1770 the Treasury ordered the Royal Mint to produce copper coins in huge quantities, and over the next six years, millions of farthings and halfpennies were struck and issued into circulation.
However, far from dissuading the counterfeiters the huge influx of quality copper into the market only facilitated the production of more fakes. A skilled fraudster could melt down one genuine coin and make two or three underweight coins with the metal. In 1775 the Treasury admitted defeat and the official Government coin presses fell silent again.
Counterfeiting was a serious offence punishable by death. On 18th March 1789, Catherine and Hugh Murphy were executed at Newgate Prison in London for coining. The term covered several offences, such as clipping bits off silver and gold coins to melt down, colouring coins to make them look more valuable, producing counterfeits and possessing the equipment to do so.
Coining was an act of high treason in that it was considered to be a crime committed against the King. Therefore, Catherine was not hanged alongside her husband. Instead, she became the last woman in Britain to be executed by burning at the stake, the penalty for female coin counterfeiters until 1790.
The counterfeiting law only applied to criminals making visually exact replicas. Many criminals took advantage of this legal loophole by making coins with deliberate errors in their inscriptions, trusting that people would be unlikely to spot the difference!
An official examination of coins in circulation in 1786 confirmed that the nation’s coinage was in a shocking state; badly worn, barely legible, underweight and mostly fake. Only about eight per cent of ‘halfpennies’ in circulation were genuine. Genuine coins were often hoarded, and the fakes spent first, thereby proving Gresham’s Law that “bad money drives out good”.
Wear and tear over decades meant that smaller denominations were often so worn that it was impossible to discern the image that had once appeared on it. Some dated back to the reign of William III (1650 –1702) and had been allowed to circulate for a century.
The Royal Mint responded to the crisis by effectively shutting down. It produced no copper coins at all between 1775 and 1821. A small batch of silver shillings and sixpences were struck in 1787, but only because the Bank of England wanted to sell them to collectors looking for Christmas and birthday gifts. It was left to others to propose a solution to the problem.