TO NEWTON, WORKING through the problem Lowndes had set, one fact was obvious. Though he did not put it in quite this language, it was clear that currency criminals were rational actors responding to an uncomplicated set of incentives. Silver clippings represented pure profit, as was the margin harvested abroad for full-weight minted shillings. Human beings would continue to take those gains unless compelled by coercion or a change in the marketplace. The problem was as straightforward as the simplest of equations.
Newton also understood that force alone could not eliminate the smuggling of bullion, given that the crime of clipping persisted despite the death sentence it carried. So he turned his attention to the source of profit in the illegal silver trade, and came up with two measures that could destroy the elementary economic logic behind the assault on England's coins. First the nation had to get rid of its old, worn, increasingly debased currency. To do so, Newton and many others recommended a complete recoinage. All of England's silver money, old and new, was to be called back in to the Mint, melted down, and remade into a single, consistent, edged issue. That step alone would mostly solve the clipping problem. With no more hand-hammered, smooth-edged money in circulation, it would become exceedingly difficult to shave much metal from the new coins.
But without a shift in the ratio of weight to face value of the new coins, reminting England's money would not curb the relentless flow of silver across the Channel. To solve that problem, Newton argued, it was essential "to make Milled money constantly of the same Intrinsick & Extrinsic value, as it ought to be and thereby to prevent the Melting or Exporting it." That is, instead of two different sources of the value implied by a coin—the "intrinsic" market price of its metal and the "extrinsic" value imparted by the stamp of the head of a monarch that transformed an ordinary disc of metal into legal tender—these separate measures must be brought into agreement. With silver and gold both being used as money, this meant altering the relative value of the two. In this case, when England's silver bought more gold on the Continent than it could buying guineas at face value, that meant lowering the amount of silver per shilling—making Dutch or Spanish gold more expensive as counted in English silver money. Such a devaluation, performed correctly, would eliminate the price differences exploited so successfully by the currency buccaneers.
Lowndes, the leading public figure arguing for devaluation, welcomed Newton's reasoning and support. He still found it hard to make his case, because at its core was a radically modern thought: the King's imprimatur was a mere fiction and not the working of a kind of magic that determined the absolute worth of a given piece of silver. By Newton's logic, the word "shilling" could be thought of as no more than a convenient way to express what a given amount of silver bullion was worth as a commodity. In that view, units of currency—shillings, half-crowns, guineas—could not be absolute statements of value, extensions of the divine authority of kings. Instead, they were relative claims of the prices of quantities of metal—of anything—and those values could change with every shift in conditions in the real world.
Thus, lurking within the argument for devaluation lay a genuinely unsettling idea. Money need not be seen as merely a thing, a tangible object jangling in one's purse. It could be understood as a term in an equation, an abstraction, a variable to be analyzed mathematically—as in fact skilled traders had been doing more or less explicitly every time they played the markets in Holland against those in London.
Newton himself did not at first grasp the full implications of his analysis. He still had moments when he thought that the government could, on its own, fix a value for England's silver. He told Lowndes that after devaluation, any dealer who offered a higher price for silver by weight than the face value of the same weight of milled money should be jailed "till the Party offending shall give an Account of himself." But the underlying logic of his discussion of the two sources of value led implacably to the conclusion that devaluation was the only way out of England's currency predicament.
This was a thought too far—if not for Newton, then for most of his colleagues. The unquestioned leader of the anti-devaluation forces was John Locke. To be sure, Locke recognized the need to recoin; the miserable state of the clipped coinage was as obvious to him as it was to anyone in England. But apart from melting down old silver to mint new coins, all else—the old weight and face values for each denomination—should remain constant. To do otherwise, he argued, would violate the very nature of money. After all, changing the number associated with a coin, calling a crown-weight piece of silver seventy-five pence instead of sixty, for instance, would not make that coin buy more silver bullion than it had previously. "I am afraid no body will think Change of Denomination has such a Power."
Locke's argument is correct; it is merely another way of stating the fact of devaluation: a devalued silver shilling contains and buys less silver metal than a higher-silver-content one did yesterday. But that was beside the point. The reason silver escaped to Amsterdam was because each transaction brought more Dutch gold than the same weight of silver stamped into shillings and crowns could buy in England. Nonetheless, Locke denied that units of money—shillings or pounds or pistoles, for that matter—could be subject to a market of their own, varying in price just like any other commodity. Lowndes was his chief target, but Locke did not flinch from contradicting his dear friend as well. In direct rebuke to Newton's thinking, he wrote, "Some are of the opinion that this measure of commerce [the currency], like all other measures is arbitrary, and may at pleasure be varied, by putting more or fewer grains of silver in pieces of a known denomination." Not so, he claimed. "But they will be of another mind when they consider that silver is a matter of nature different from all other" (italics added). It was, he said, "the thing bargained for as well as the measure of the bargain." To Locke, silver was unique in the material world: alone in nature it was the fixed center around which all else learned its worth.
Newton was right, but Locke grasped what his friend did not. Devaluation was a weapon aimed at the moneyed, and especially the landowning class—those whose rents would fall by the amount of silver shaved from the legal measure of a shilling piece. Since 1691, Locke had defended a permanently fixed monetary system as a matter of social necessity, a guarantor of the stability of the state. Now he argued that devaluation would "only serve to defraud the King, and a great number of his subjects, and to perplex all." In hard numbers, landlords and the government stood to lose twenty percent under the proposal advocated by Newton and Lowndes.
Locke's view won, of course. When on January 17, 1696, Parliament finally approved the recoinage, it stipulated that the new coins retain the old weights. Four days later, King William gave his royal assent to the act.
There was a pause before recoinage began in earnest. Absent some compelling reason to go to London, Newton simply stayed put, as he had for most of the preceding three decades. But on March 19, he received a letter from Charles Montague, Chancellor of the Exchequer, notifying him that the King intended "to make Mr. Newton Warden of the Mint." Montague had been one of the first men Locke enlisted to help find Newton a job. His rise to the chancellorship in 1694, coupled with the timely resignation of the incumbent Warden, had created the opportunity to provide his old Trinity College colleague with a position in London.
Newton could not respond swiftly enough. Trinity's records show that he left Cambridge for London on March 21 to discuss his prospects. Evidently what he found at the Mint's headquarters in the Tower of London satisfied him. The Chancellor had assured him that the Warden "has not too much bus'nesse to require more attendance than you may spare." By April 13, the paperwork was done. William III, "By Grace of God, King of England, Scotland, France and Ireland," confirmed that the office of Warden of the Mint now belonged to "Our beloved Isaac Newton, Esquire."
One week later, Isaac Newton left Trinity College for the last time. His luggage—including his library of several hundred volumes—would have gone ahead, on one of the carts that made regular hauling runs down the London road. For his own journey, he could have chosen to jounce with strangers on one of the early stagecoaches that had just begun to run from the provinces to the capital. More likely, he would have hired a horse, as became a gentleman. He would probably have broken the journey at the inn at Ware, waiting there, just as Chaucer's pilgrims had three hundred years before, for enough of a company to gather to provide mutual protection along the isolated stretch of road that followed, a notorious haunt of highwaymen.
From there, London was no more than several hours away, and with it a new life, unencumbered—or so it was supposed to be—by any mundane claim on Newton's time or brain. There is no evidence that abandoning his Trinity colleagues cost him any pang. Not a single letter survives between him and anyone he left behind.