Isaac Newton and the English Economic Miracle. Interesting facts, surprising facts, unknown facts in the museum of facts

Original taken from sobiainnen v

Pleases the level of readers of the analytical blog "LJ Sobyanin". Recently posted my article in collaboration with M.M. Shibutov "Strategic planning in the United States: military power, breakthrough technologies and the dollar" http://sobiainnen.livejournal.com/47897.html The article was completely republished on more than fifteen analytical resources and blogs - RELGA, Blog-book Octopus, IAC MSU, Central Asian Thick Journal, Center for Strategic Assessments and Forecasts, LJ Guraluk, LJ Otyrba, LJ skalozub52, LJ "For the Eurasian Union!", LJ Mikhail Chernov, etc.

Isaac Newton. Painting by William Blake, 1805

Two added very important meanings. Pleased with the blogger Anatoly Aslanovich Otyrba http://otyrba.livejournal.com/191805.html (St. Petersburg economist, writes good articles in the scientific and Russian business press). In developing the idea of ​​the continuity of the conceptual and strategic dominance of the United States in the financial sphere to British rule, he gave a link to the article by Yuli Lvovich Menzin "The Mint and the Universe", which is reproduced in full below. And the illustration of the blog-book Octopus http://www.peremeny.ru/books/osminog/5850, where the article was posted a day earlier than Anatoly Otyrba's blog, accentuated THE SAME THOUGHT - William Blake's painting "Isaac Newton" - "strategic Anglo-Saxon architect being "(Bretton Wood 1944 - USA might, Isaac Newton - Rule, Britain !, succession of Anglo-Saxon leadership). The saying at our East Faculty of Leningrad State University / St. Petersburg State University is truly right: "The world is not small - the layer is thin!"

I thank Anatoly Aslanovich Otyrba and the editor-in-chief of "Octopus" Oleg Viktorovich Davydov for valuable additions of meanings. Yulia Lvovich Menzina thanked by phone, but here I would like to publicly thank again for this article and other similar articles, for example, on the role of Nicolaus Copernicus. Sincere thanks to all of you, dear fellow analysts, scientists! To everyone who supported this first of a series of articles on strategic planning in the countries of the Caucasus and Central Asia, to which the United States is regarded as an active screenwriter and influential force in the Caspian-Central Asian region.

According to the article by Yu.L. Mentsin. There is a rule in military strategy - "a compromise is worse than defeat"; defeat mobilizes and forces one to radically and totally rearm and rebuild military affairs, while a compromise reinforces the status quo that is insufficient for victory. The experience of Great Britain is extremely interesting here - of the three proposals for financial reform, the most radical provisions were taken from the proposals of William Lound, Isaac Newton and John Locke (the second and third were called by the state from the world of science). The exchange of money cost the British Crown Treasury 2.7 million pounds, which was then almost one and a half of its annual income. The state decided not to shift the cost of minting new coins and exchanging money onto the shoulders of the population, and made it possible for everyone to enrich themselves. Moreover, in the future, Britain offered the banking houses of Europe a very favorable for Europeans and unfavorable for Britain rate of exchange of silver money for a golden guinea, which made it possible for European bankers and merchants to trade with the colonies in Asia and America to enrich themselves. As a result of this "unprofitable" operation, the British economy solved its problems in a matter of years and became the undisputed leader in Europe in attracting investments, living standards of the population, and rates of economic development. The trust of the population and the belief of external players in the success of Britain, as it turned out, are very expensive!

As far as I know, a number of Moscow and St. Petersburg think tanks and groups are now working on such complex and highly effective financial strategies that will allow the Eurasian Union to quickly solve the current difficult financial problems of Russia and its allies and become a world leader. May God grant to colleagues the success and attention of the highest Russian authorities in this work. For the rearmament of the Armed Forces, for the development Eastern Siberia and the Far East needs money oh how big. And to raise the standard of living of the population of Russia, Belarus and Kazakhstan, other potential members of the Eurasian Union is also an important task. And this also requires a lot of money.

In the photo: November 20, 2007, Queen Elizabeth II of Great Britain and all the people of her country and the Commonwealth countries celebrate 60 years of marriage with Lord Philip Mountbatten.

Mentsin Yu.L. The Mint and the Universe. Newton at the origins of the English "economic miracle". Great Re-coinage, or monetarism in English. Newton and Marx. The riddle of the golden guinea. England's national debt and the industrial revolution. At the base of the English "financial pyramid". // Questions of the history of natural science and technology. 1997. No. 4.
http://krotov.info/history/17/1690/1696menz.html
Library of the priest Yakov Krotov.
MENTSIN Yuliy Lvovich, Cand. phys.-mat. Sci., Senior Researcher, State Astronomical Institute named after V.I. PC. Sternberg (GAISH) Moscow State University MV Lomonosov, Head of the Museum of the History of the University Observatory and GAISH.
Notes are immersed in text and enclosed in curly braces.
Part 1 (under the cut). Newton at the origins of the English "economic miracle". Great Re-coinage, or monetarism in English.
http://sobiainnen.livejournal.com/49288.html

“It was in England that the decisive steps were taken. Everything there went naturally, as if by itself, and this is a fascinating riddle that was created by the world's first industrial revolution, which marked the biggest gap in the history of modern times. So why England? "
F. Braudel. "The Dynamics of Capitalism".

In the XVIII century. England went from a relatively backward and poor country, whose economy was also undermined by revolutions, wars and unrest, to a powerful power with the most advanced and fastest growing industry in the world.

The mystery of this "economic miracle" has long troubled historians. But if earlier they saw the main reason for the English industrial revolution in technology - the invention and implementation of machines in production, in recent years more and more attention has been paid to the analysis of the socio-political and demographic conditions prevailing then in the country, the creation of a network of communications in it, the position on the world markets, etc. (see, for example, work -). At the same time, the financial system of England is of particular interest to researchers. Thus, it is emphasized that it was the creation of this system, which possessed amazing flexibility and reliability, that allowed British banks for many decades to operate with funds, the volume of which far exceeded the real capabilities of the national economy, and, thanks to this, to provide domestic entrepreneurs with significant loans at very moderate interest rates. In turn, it was this generous lending to production that made possible its radical modernization, including the massive introduction of expensive steam engines. (see about this,,).

But how, in fact, did England manage to create this mechanism for financing the economy and then, for a long time, maintain its smooth operation? In answering this question, it is important, in my opinion, to analyze the event that became a kind of prologue to the English "financial revolution" - the monetary reform of 1695-97, during which all spoiled and false silver coins.

Isaac Newton (1643-1727), appointed in 1696 as Warden (Wаrden), and in 1699 as Director (Master) of the Royal Mint, took an active part in the preparation and implementation of this reform, called the Great Re-coinage. At the post of Director, Newton remained unchanged until 1725, and at the same time, for his great services to the state, he was elevated to knighthood by Queen Anne until 1705. Retiring, he secured the appointment of his son-in-law John Conduit (1688-1737), the husband of Newton K. Barton's niece, to the post of Director, who by that time had already been serving as Deputy Director for several years. Thus, the continuity of management was ensured and we can rightfully talk about the almost 40-year "Newton era" in the leadership of one of the most important financial institutions in England.

It should be noted that both Newton's participation in the monetary reform and his leadership of the Mint are among the least studied aspects of the scientist's multifaceted work. This is partly due to the fact that the necessary archival documents remained unknown for a long time, and partly to the lack of serious interest among researchers in this topic. In fact, Newton's biographers see in his work as head of the Mint only work to solve administrative and economic problems. This work, emphasizes R. Westfall, demanded colossal dedication from Newton, but in its importance and complexity it was incomparable with his scientific achievements. In addition, biographers are forced to state that as an administrator, Newton did not always behave with dignity, showing despotism, intolerance and cruelty, especially when fighting personal opponents.

(Archival documents related to Newton's management of the Mint were discovered only in the 1920s and were even exhibited at an auction in London in 1936. However, their partial publication became possible only in the post-war years due to fears that the contained in them, information about the procedures in the production of money can be used by German intelligence. This publication was carried out in a number of his works by the Director of the Mint, J. Craig, and it is these works that are the fundamental source for modern researchers of Newton's work.)

In principle, there is no reason to doubt the conclusions of historians. Suffice it to recall how Newton behaved in disputes about scientific priority. At the same time, one should not forget about the terrible state of anarchy in which the Mint was at the time of Newton's arrival there. In the institution, which was supposed to be distinguished by special discipline, drunkenness, fights and theft reigned, including the theft of coins, which were then sold by the employees themselves to counterfeiters. It is not surprising, therefore, that in the fight against corruption, theft and counterfeiting of money, Newton was forced to be firm, as well as to seek the expansion of his administrative and legal powers, including the creation of his own prison about the Mint and the police, which was involved in investigating all kinds of financial crimes and violations throughout the country. ... In fact, the Mint under Newton, together with the branches created at that time in a number of other cities, turned into a kind of empire, distinguished by such a degree of centralization and control that was achieved by Great Britain only by the middle of the 19th century. ...

Biographers of Newton are generally unanimous in the fact that, while reorganizing the Mint, he showed, especially in the first years of work, an amazing activity that can hardly be explained by the scientist's diligence alone. So, G.E. Christianson notes that the Mint became, in essence, Newton's "secular religion." But in this case, is it possible to assume that the solution of current problems, which so disappointed historians with its routine, was subordinated, in Newton's eyes, to the task of achieving some special goal, apparently only guessed by him and a narrow circle of his like-minded friends? Analyzing Newton's activities as head of the Mint, it is important to take into account the fact that the creation of the English financial system was inextricably linked with a radical rethinking of the role of money in the economic life of society.

So, for example, it was required to understand that the main goal of the state's financial policy is not to fill the treasury at any cost, but to create conditions for the continuous improvement of lending mechanisms, which would effectively involve more and more capital scattered in society into production. In other words, it was required to see in money not only a simple intermediary in trading operations, but also a powerful research device that allows one to detect and use hidden or social resources that are not yet available.

(The main reason for the amazing success of the English economy of the eighteenth century was precisely the fact that, thanks to the creation of unprecedentedly powerful and mobile credit mechanisms, she, the economy, managed to use the "energy" of the movement of first European and then world capital. discussed below.)

To a certain extent, Newton's reconstruction of the Mint can be compared to Galileo's improvement of the telescope. In both cases, previously known devices turned into tools that help to form radically new views of the world and the economy. If earlier the production of money was considered a purely auxiliary action, then under Newton it became, in fact, the dominant feature of the economic life of England. This reorientation of the British economy will be discussed in more detail below. In this case, I will pay special attention to the analysis of the monetary reform of 1695-97, which served as a kind of model for the subsequent development of the financial system of England.

The Great Re-coinage, or monetarism in English

Among the many diseases that plagued in the last decades of the seventeenth century. the economy of England, the most terrible, according to contemporaries, was the systematic damage to silver coins, which then constituted the bulk of cash. The technical prerequisite for this damage was the imperfection of the minting of coins, most of which were made by hand. Their shape and size did not always correspond to the standard and, moreover, they did not have the usual ribbed rim on them, which made it possible to imperceptibly cut off some "surplus" from the coins and, having wiped off the cut with dirt, put the spoiled money back into circulation. The gallows was relied on for this "operation", but the temptation to get rich a little was too great, so thousands of people, together with ordinary counterfeiters who flourished in such conditions, successfully devalued the money in circulation.

In his History of England, Thomas Macaulay wrote that this massive damage to coins, affecting the interests of almost all segments of the population, was a greater evil for the country than any high treason. The continuous depreciation of money made normal business life impossible, since everyone was afraid of deception, although at every opportunity he himself tried to pay off with defective coins. Therefore, in the markets, in workshops and offices, scandals and fights regularly broke out. As a result, trade was curtailed, and production fell into decay (as quoted in).

It cannot be said that the government was inactive in this situation. In addition to expanding the use of purely police measures in England, for the first time in the world, machine minting of high-quality coins with the required silver content was established. However, these highly valued new coins could not displace the old ones from circulation. Each tried to pay off with old, defective coins. New coins were withdrawn from circulation, melted into ingots and, despite strict customs control, in increasing quantities were exported abroad, since only damaged, devalued money remained in England.

Since it was not possible to solve this problem by phased measures, in order to save the economy, it was necessary to somehow immediately replace all the cash in circulation. Generally speaking, in previous centuries, such operations were carried out repeatedly. Finding itself in a similar position, the government resorted to confiscating all spoiled money and re-mint it into new, full-value coins. However, it was completely unclear whether it would be possible to carry out such a re-coinage on the scale of the entire state at the end of the 17th century, given the degree of development of the monetary economy. In addition, the experience of previous re-minting (the last one was carried out in England in the middle of the 16th century) was rather disappointing. Providing only a short-term stabilizing effect, the exchange of money laid a heavy burden on the treasury and literally ruined the population, who exchanged old coins for new ones by weight.

As a result, a person received an amount 1.5-2 times less than what he had before. Meanwhile, the amount of debts and taxes remained the same. As a rule, prices did not decrease either, since traders, especially small ones, preferred to reduce sales in response to a decrease in demand. Thus, only large creditors (especially banks) and government officials who received a solid salary were the winners, and the impoverished population soon began to spoil money again.

On the other hand, despite the possibility of failure, reform could no longer be delayed. The position of England continued to deteriorate, which was also facilitated by the war with France that began in 1689. Prices and government debt soared, and the economy collapsed. The situation became especially critical in 1694-95. Mass bankruptcies began in the country, and in some places panic arose. Under these conditions, the death of the constitutional monarchy, established in England as a result of the "glorious revolution" of 1688, and the secondary restoration of the Stuart house, with inevitably followed then massive repressions, became quite probable. The exchange of money became inevitable, therefore, heated discussions began in parliament and government about the most acceptable ways of carrying out the reform. It was necessary to find a solution that would, if possible, combine the interests of the treasury, the population, big business and foreign, primarily Dutch, creditors of the state.

And so, in the search for such a solution, Isaac Newton played an important role, to whom the British government specifically turned for advice. It should be emphasized that such a clear recognition of the authority of scientists in solving state issues was not accidental and was based on long-standing traditions dating back to Francis Bacon. At the same time, interest in the work of scientists on the part of politicians and religious leaders especially intensified in the era of the Restoration, when the continuous enmity between the king and parliament, as well as between various churches and confessions, caused a crisis of trust in existing institutions and created a worldview vacuum in the country, for filling which it was it is necessary to find some fundamentally new and, at the same time, trustworthy global guidelines.

It is in these conditions that the philosophy of nature of mechanical scientists, their methods of setting up experiments, the rules for conducting scientific discussions, etc., are beginning to be seen as a long-awaited path to solving the most pressing socio-political and religious problems, as a way out of the chaos into which in the XVII v. plunged all of Europe, including surviving the civil war and continuing to be in a state of social tension, England.

(For more details on the links between natural science and socio-political problems in Europe and, especially, in England in the seventeenth century, see.)

Newton's contemporaries perceived the scientific achievements of scientists not only and even not so much as a simple multiplication of positive knowledge about the laws of nature, but as proof of man's ability to establish the same unshakable order on Earth that scientists have already discovered in the sky. It is not surprising, therefore, that many British statesmen of this era were seriously interested in science, and scientists (R. Boyle, E. Halley, J. Locke, I. Newton, etc.) were often appointed to high posts, introducing into the political life of the country typical for scientific research, openness of discussion, depth of analysis, courage and novelty of approaches to solving problems.

One of the most striking examples of such a commonwealth of scientists and politicians was the monetary reform under consideration, the authors of which, in addition to Isaac Newton, were the philosopher, ideologist of parliamentarism, physician, member of the Royal Society of London John Locke (1632-1704) and student, and later a close friend of Newton, since 1695, Chancellor of the Exchequer Charles Montague (Lord Halifax) (1661-1715). The general, so to speak, political leadership of the development of the reform concept was carried out by Locke's longtime friend, the head of the Whig party, from 1697 the Lord Chancellor of England, in 1699-1704. President of the Royal Society John Somers (1651-1716). The source material for the discussions - they took place at parliamentary hearings and even in print - was a money exchange project prepared on the instructions of Montague by Treasury Secretary William Lowndes.

In order to better understand the significance of this project, as well as the essence of its subsequent changes, it is necessary to take into account the fact that the main problem of the reform was its colossal cost. Therefore, when drawing up and discussing the project, it was necessary first of all to decide at whose expense the reform would be carried out, and since all strata of society were interested in the normalization of money circulation, it would seem that every resident of the country who had money had to pay for the reform. In other words, the exchange of money should have been carried out as it was done in the old days: the treasury took upon itself the costs of re-coinage, and the population exchanged old coins for new ones by weight, i.e. at the real cost of the surrendered silver.

However, as noted above, the replacement of coins by their weight ruined the population and, as a result, further undermined the economy of the state. That is why Lound proposed to exchange money not by weight, but at face value, which would have cost the treasury, according to his calculations, £ 1.5 million. At the same time, in order to partially compensate for these huge, at that time, costs, it was proposed to simultaneously devalue the pound sterling by 20% (by reducing the content of silver in it), as well as oblige the population to pay half of the costs of coinage.

J. Locke spoke in the discussions as a sharp opponent of devaluation, which could undermine the confidence of foreign creditors in England and cause serious damage to domestic banks. At the same time, Locke proposed to temporarily leave the spoiled coins in circulation, reducing their value to the value of the silver actually contained in them. In turn, Newton believed that devaluation was inevitable, but put forward, however, a radical proposal that the exchange should be carried out as Lound had proposed, but not entirely at the expense of the treasury. As for the inevitable rise in prices during devaluation, Newton proposed to create a special ministry to control them.

Unfortunately, we do not know how exactly the disputes about the ways of carrying out the reform took place. It is only known that the final draft, which Montague, as head of the Treasury, successfully defended in parliament, was not a compromise "golden mean", but a paradoxical symbiosis of the most radical proposals of Lound, Locke and Newton. So, the first was taken the idea of ​​a swift one, in order to avoid further damage to coins, exchange of money at face value, from the second - the refusal of devaluation in order to preserve the inviolability of the national monetary unit, and, finally, the idea of ​​exchanging money entirely at the expense of the treasury was taken from Newton. Moreover, the latter was motivated by the fact that all the costs of exchanging money should be borne by the government, which, willingly or unwillingly, brought the country to a crisis.

At the end of 1696, the Parliament of England adopted a package of laws that ordered citizens, within a specified and very short time, to hand over to the treasury all the spoiled money they had and after a while receive in return (at par!) New, full-value coins. At first, when exchanging money, there was an acute and extremely severe shortage of cash for the economy, since the Mint was completely unable to cope with the sharply increased load. However, after Newton took over the leadership in 1696, the production of money was quickly increased almost tenfold.

(This result was achieved precisely by putting things in order and modernizing some of the technological processes, as well as by significantly expanding the production capacities of the Mint, including the creation of its branches in a number of cities (the branch in Essex was headed by the astronomer E. Halley), the construction of mobile machines for minting money, etc.)

By the end of 1697, the cash deficit, which literally paralyzed trade, was eliminated and the business life of England resumed in full. At the same time, the treasury, collecting taxes from all the increasing trade turnover, was able to fully compensate for the losses incurred during the exchange of money within several years. Thus, the reform, carried out in the interests of the common people and business circles, turned out to be beneficial to the government.

In order to avoid misunderstandings, it should be emphasized that the exchange of money on such a grand scale could not do without excesses and abuse. So, some banks close to government circles profited from this operation, and a considerable number of people did not have time or could not exchange their money on time and, as a result, suffered losses, although, it should be admitted, when exchanging money by weight, these losses were much more. On the other hand, it is important to remember that the authors of the reform were sober and state-minded people. Therefore, the exchange of money at face value was not a manifestation of their altruism or the desire to make amends for the government's miscalculations. Rather, we are dealing with the birth of a fundamentally new and unusually bold financial policy aimed at stimulating the national economy.

The money exchange cost the treasury 2.7 million pounds, which was then almost one and a half of its annual income. Of course, before there were wise rulers who understood that for the sake of the prosperity of the state, one should not ruin one's people with exorbitant extortions. However, putting forward a project according to which the devastated treasury had to pay the population a huge amount of money to save itself, demanded a truly "Copernican coup" in the idea of ​​the role of money in the economic life of the state.

(The government of England had to borrow funds for the reform from large bankers and merchants who sought to normalize the country's monetary circulation, as well as from the Netherlands (the main creditor and trading partner of England), interested in the stability of the pound sterling.)

In order to better understand the boldness and uncommonness of the Great Re-coinage, it makes sense to recall some much later episodes of Russian history. Thus, it is well known that the main drawback of the manifesto on the abolition of serfdom in Russia was the introduction of a ransom for land. In an effort to shift the costs of emancipating the peasants onto themselves, the Russian government obliged the former serfs to pay huge (due to the accumulation of interest) and literally ruined them taxes ("redemption"), which were canceled only after the 1905 revolution. Meanwhile, already at the end of 60 -x years XIX century. Prominent Russian economist V.V. Bervy-Flerovsky, in his articles, called on the government of Alexander II to at least reduce the redemption payments, explaining in detail that soon, due to the growth of consumption and the intensification of business life of the peasants who are now crushed by taxes, the treasury will receive much more than it initially lost. To the authorities, however, such a proposal seemed so wild that its author was declared insane. Subsequently, Bervy-Flerovsky left Russia forever.

In the mid 70s. last century D.I. Mendeleev put forward a proposal to exempt the Russian oil fields from excise duties. Based on a deep study of domestic and foreign experience, Mendeleev explained to the Minister of Finance M.Kh. Reitern that these excise taxes (their value was only 300 thousand rubles a year) stifle the nascent industry. Refusal from them will be rewarded by the rapid development of oil fields and will result in multimillion-dollar income. Reitern initially called these proposals "professorial dreams." However, later he nevertheless listened to the advice of the scientist and canceled the excise tax, which gave impetus to the rapid development of the oil refining industry and soon allowed Russia to abandon the import of American kerosene.

Apparently, the decision of the Minister of Finance to follow Mendeleev's recommendations was in no small measure influenced by the modest amount of excise tax and, therefore, a small degree of risk. In those cases, when it comes to large-scale projects affecting the economy as a whole, any proposals to limit treasury revenues in the name of the country's future prosperity are perceived by statesmen as just another "dream" that is completely unrealizable when real life

(In one of his speeches, Yegor Gaidar explained to the deputies of the Supreme Soviet of the USSR that full compensation to citizens of their depreciated deposits would require an amount equal to 6 quarterly budgets of the country. The value of this figure made a huge impression on the deputies. Thus, we are dealing with an amount equal in size (on a relative scale, of course) to that which the British had to pay during the reform of the late 17th century.)

In principle, such a reaction can be understood. Indeed, any attempts to follow the advice of theorists when the financial system is undermined will inevitably lead to the formation of budget "holes", which can be plugged either by printing unsecured money or through huge external loans. Moreover, in both the first and the second (albeit to a lesser extent) case, we will get an outbreak of inflation, which will quickly nullify all efforts to improve the economy.

Analyzing the problems faced by the authors of the Great Re-coinage project, it is important to take into account that the threat of inflation exists even when the economy uses metal rather than paper money. So, in the XVI century. due to the huge influx of silver from South America, prices for basic products have increased 3-4 times on average in Europe. At the same time, the economy of Spain - the main colonial power of that time - was literally ruined by this stream of silver, turning warriors, peasants, artisans into adventurers, idlers and bots, whose easy money enriched not their own country, but Dutch merchants.

It is clear that a similar ending (albeit on a smaller scale) was possible in England as well. Of course, giving the population full-value money, instead of spoiled ones, could activate trade and, as a result, increase tax revenues to the treasury. However, the purchasing power of the collected silver was significantly lower. After all, if prices did not go down with a drop in demand after the exchange of money (by weight!) In the middle of the 16th century, then what could have prevented the rise in prices with an increase in effective demand?

In the best case, traders could simply keep the previous denominations of prices or even lower them somewhat, however, using full-weight coins, this would still mean a drop in the value of silver on the domestic market. In turn, the result of such a fall could be an outflow of silver abroad, which would undoubtedly worsen the already difficult foreign economic situation of England, which at that time was at war with France. Thus, it is understandable why the initial reform projects were much more moderate and uncompromising in nature, and Newton also proposed introducing state control over prices as a temporary measure, due to the ongoing war.

Nevertheless, in the end, a risky and burdensome option for the treasury was adopted to exchange money, which, it would seem, should only worsen the economic situation of the country. Therefore, although we do not know what prompted the authors of the reform to take this step, we have the right to pose the question: why, in fact, the Great Re-coinage not only ruined the English economy, but also became the starting point of its flourishing?

Pleases the level of readers of the analytical blog "LJ Sobyanin". Recently I posted my article, co-authored with M.M. Shibutov, "Strategic planning in the United States: military power, breakthrough technologies and the dollar" thick magazine, Center for Strategic Assessments and Forecasts, LJ Guraluk, LJ Otyrba, LJ skalozub52, LJ "For the Eurasian Union!", LJ Mikhail Chernov, etc.

Isaac Newton. Painting by William Blake, 1805

Two added very important meanings. Pleased with the blogger Anatoly Aslanovich Otyrba http://otyrba.livejournal.com/191805.html (St. Petersburg economist, writes good articles in the scientific and Russian business press). In developing the idea of ​​the continuity of the conceptual and strategic dominance of the United States in the financial sphere to British rule, he gave a link to the article by Yuli Lvovich Menzin "The Mint and the Universe", which is reproduced in full below. And the illustration of the blog-book Octopus http://www.peremeny.ru/books/osminog/5850, where the article was posted a day earlier than Anatoly Otyrba's blog, accentuated THE SAME THOUGHT - William Blake's painting "Isaac Newton" - "strategic Anglo-Saxon architect being "(Bretton Wood 1944 - USA might, Isaac Newton - Rule, Britain !, succession of Anglo-Saxon leadership). The saying at our East Faculty of Leningrad State University / St. Petersburg State University is truly right: "The world is not small - the layer is thin!"

I thank Anatoly Aslanovich Otyrba and the editor-in-chief of "Octopus" Oleg Viktorovich Davydov for valuable additions of meanings. Yulia Lvovich Menzina thanked by phone, but here I would like to publicly thank again for this article and other similar articles, for example, on the role of Nicolaus Copernicus. Sincere thanks to all of you, dear fellow analysts, scientists! To everyone who supported this first of a series of articles on strategic planning in the countries of the Caucasus and Central Asia, to which the United States is regarded as an active screenwriter and influential force in the Caspian-Central Asian region.

According to the article by Yu.L. Mentsin. There is a rule in military strategy - "a compromise is worse than defeat"; defeat mobilizes and forces one to radically and totally rearm and rebuild military affairs, while a compromise reinforces the status quo that is insufficient for victory. The experience of Great Britain is extremely interesting here - of the three proposals for financial reform, the most radical provisions were taken from the proposals of William Lound, Isaac Newton and John Locke (the second and third were called by the state from the world of science). The exchange of money cost the British Crown Treasury 2.7 million pounds, which was then almost one and a half of its annual income. The state decided not to shift the cost of minting new coins and exchanging money onto the shoulders of the population, and made it possible for everyone to enrich themselves. Moreover, in the future, Britain offered the banking houses of Europe a very favorable for Europeans and unfavorable for Britain rate of exchange of silver money for a golden guinea, which made it possible for European bankers and merchants to trade with the colonies in Asia and America to enrich themselves. As a result of this "unprofitable" operation, the British economy solved its problems in a matter of years and became the undisputed leader in Europe in attracting investments, living standards of the population, and rates of economic development. The trust of the population and the belief of external players in the success of Britain, as it turned out, are very expensive!

As far as I know, a number of Moscow and St. Petersburg think tanks and groups are now working on such complex and highly effective financial strategies that will allow the Eurasian Union to quickly solve the current difficult financial problems of Russia and its allies and become a world leader. May God grant to colleagues the success and attention of the highest Russian authorities in this work. For the rearmament of the Armed Forces, for the development of Eastern Siberia and the Far East, oh, what a lot of money is needed. And to raise the standard of living of the population of Russia, Belarus and Kazakhstan, other potential members of the Eurasian Union is also an important task. And this also requires a lot of money.

In the photo: November 20, 2007, Queen Elizabeth II of Great Britain and all the people of her country and the Commonwealth countries celebrate 60 years of marriage with Lord Philip Mountbatten.

Mentsin Yu.L. The Mint and the Universe. Newton at the origins of the English "economic miracle". Great Re-coinage, or monetarism in English. Newton and Marx. The riddle of the golden guinea. England's national debt and the industrial revolution. At the base of the English "financial pyramid". // Questions of the history of natural science and technology. 1997. No. 4.
http://krotov.info/history/17/1690/1696menz.html
Library of the priest Yakov Krotov.
MENTSIN Yuliy Lvovich, Cand. phys.-mat. Sci., Senior Researcher, State Astronomical Institute named after V.I. PC. Sternberg (GAISH) Moscow State University MV Lomonosov, Head of the Museum of the History of the University Observatory and GAISH.
Notes are immersed in text and enclosed in curly braces.
Part 1 (under the cut). Newton at the origins of the English "economic miracle". Great Re-coinage, or monetarism in English.

“It was in England that the decisive steps were taken. Everything there went naturally, as if by itself, and this is a fascinating riddle that was created by the world's first industrial revolution, which marked the biggest gap in the history of modern times. So why England? "
F. Braudel. "The Dynamics of Capitalism".

In the XVIII century. England went from a relatively backward and poor country, whose economy was also undermined by revolutions, wars and unrest, to a powerful power with the most advanced and fastest growing industry in the world.

The mystery of this "economic miracle" has long troubled historians. But if earlier they saw the main reason for the English industrial revolution in technology - the invention and implementation of machines in production, in recent years more and more attention has been paid to the analysis of the socio-political and demographic conditions prevailing then in the country, the creation of a network of communications in it, the position on the world markets, etc. (see, for example, work -). At the same time, the financial system of England is of particular interest to researchers. Thus, it is emphasized that it was the creation of this system, which possessed amazing flexibility and reliability, that allowed British banks for many decades to operate with funds, the volume of which far exceeded the real capabilities of the national economy, and, thanks to this, to provide domestic entrepreneurs with significant loans at very moderate interest rates. In turn, it was this generous lending to production that made possible its radical modernization, including the massive introduction of expensive steam engines. (see about this,,).

But how, in fact, did England manage to create this mechanism for financing the economy and then, for a long time, maintain its smooth operation? In answering this question, it is important, in my opinion, to analyze the event that became a kind of prologue to the English "financial revolution" - the monetary reform of 1695-97, during which all spoiled and false silver coins.

Isaac Newton (1643-1727), appointed in 1696 as Warden (Wаrden), and in 1699 as Director (Master) of the Royal Mint, took an active part in the preparation and implementation of this reform, called the Great Re-coinage. At the post of Director, Newton remained unchanged until 1725, and at the same time, for his great services to the state, he was elevated to knighthood by Queen Anne until 1705. Retiring, he secured the appointment of his son-in-law John Conduit (1688-1737), the husband of Newton K. Barton's niece, to the post of Director, who by that time had already been serving as Deputy Director for several years. Thus, the continuity of management was ensured and we can rightfully talk about the almost 40-year "Newton era" in the leadership of one of the most important financial institutions in England.

It should be noted that both Newton's participation in the monetary reform and his leadership of the Mint are among the least studied aspects of the scientist's multifaceted work. This is partly due to the fact that the necessary archival documents remained unknown for a long time, and partly to the lack of serious interest among researchers in this topic. In fact, Newton's biographers see in his work as head of the Mint only work to solve administrative and economic problems. This work, emphasizes R. Westfall, demanded colossal dedication from Newton, but in its importance and complexity it was incomparable with his scientific achievements. In addition, biographers are forced to state that as an administrator, Newton did not always behave with dignity, showing despotism, intolerance and cruelty, especially when fighting personal opponents.

(Archival documents related to Newton's management of the Mint were discovered only in the 1920s and were even exhibited at an auction in London in 1936. However, their partial publication became possible only in the post-war years due to fears that the contained in them, information about the procedures in the production of money can be used by German intelligence. This publication was carried out in a number of his works by the Director of the Mint, J. Craig, and it is these works that are the fundamental source for modern researchers of Newton's work.)

In principle, there is no reason to doubt the conclusions of historians. Suffice it to recall how Newton behaved in disputes about scientific priority. At the same time, one should not forget about the terrible state of anarchy in which the Mint was at the time of Newton's arrival there. In the institution, which was supposed to be distinguished by special discipline, drunkenness, fights and theft reigned, including the theft of coins, which were then sold by the employees themselves to counterfeiters. It is not surprising, therefore, that in the fight against corruption, theft and counterfeiting of money, Newton was forced to be firm, as well as to seek the expansion of his administrative and legal powers, including the creation of his own prison about the Mint and the police, which was involved in investigating all kinds of financial crimes and violations throughout the country. ... In fact, the Mint under Newton, together with the branches created at that time in a number of other cities, turned into a kind of empire, distinguished by such a degree of centralization and control that was achieved by Great Britain only by the middle of the 19th century. ...

Biographers of Newton are generally unanimous in the fact that, while reorganizing the Mint, he showed, especially in the first years of work, an amazing activity that can hardly be explained by the scientist's diligence alone. So, G.E. Christianson notes that the Mint became, in essence, Newton's "secular religion." But in this case, is it possible to assume that the solution of current problems, which so disappointed historians with its routine, was subordinated, in Newton's eyes, to the task of achieving some special goal, apparently only guessed by him and a narrow circle of his like-minded friends? Analyzing Newton's activities as head of the Mint, it is important to take into account the fact that the creation of the English financial system was inextricably linked with a radical rethinking of the role of money in the economic life of society.

So, for example, it was required to understand that the main goal of the state's financial policy is not to fill the treasury at any cost, but to create conditions for the continuous improvement of lending mechanisms, which would effectively involve more and more capital scattered in society into production. In other words, it was required to see in money not only a simple intermediary in trading operations, but also a powerful research device that allows one to detect and use hidden or social resources that are not yet available.

(The main reason for the amazing success of the English economy of the eighteenth century was precisely the fact that, thanks to the creation of unprecedentedly powerful and mobile credit mechanisms, she, the economy, managed to use the "energy" of the movement of first European and then world capital. discussed below.)

To a certain extent, Newton's reconstruction of the Mint can be compared to Galileo's improvement of the telescope. In both cases, previously known devices turned into tools that help to form radically new views of the world and the economy. If earlier the production of money was considered a purely auxiliary action, then under Newton it became, in fact, the dominant feature of the economic life of England. This reorientation of the British economy will be discussed in more detail below. In this case, I will pay special attention to the analysis of the monetary reform of 1695-97, which served as a kind of model for the subsequent development of the financial system of England.

The Great Re-coinage, or monetarism in English

Among the many diseases that plagued in the last decades of the seventeenth century. the economy of England, the most terrible, according to contemporaries, was the systematic damage to silver coins, which then constituted the bulk of cash. The technical prerequisite for this damage was the imperfection of the minting of coins, most of which were made by hand. Their shape and size did not always correspond to the standard and, moreover, they did not have the usual ribbed rim on them, which made it possible to imperceptibly cut off some "surplus" from the coins and, having wiped off the cut with dirt, put the spoiled money back into circulation. The gallows was relied on for this "operation", but the temptation to get rich a little was too great, so thousands of people, together with ordinary counterfeiters who flourished in such conditions, successfully devalued the money in circulation.

In his History of England, Thomas Macaulay wrote that this massive damage to coins, affecting the interests of almost all segments of the population, was a greater evil for the country than any high treason. The continuous depreciation of money made normal business life impossible, since everyone was afraid of deception, although at every opportunity he himself tried to pay off with defective coins. Therefore, in the markets, in workshops and offices, scandals and fights regularly broke out. As a result, trade was curtailed, and production fell into decay (as quoted in).

It cannot be said that the government was inactive in this situation. In addition to expanding the use of purely police measures in England, for the first time in the world, machine minting of high-quality coins with the required silver content was established. However, these highly valued new coins could not displace the old ones from circulation. Each tried to pay off with old, defective coins. New coins were withdrawn from circulation, melted into ingots and, despite strict customs control, in increasing quantities were exported abroad, since only damaged, devalued money remained in England.

Since it was not possible to solve this problem by phased measures, in order to save the economy, it was necessary to somehow immediately replace all the cash in circulation. Generally speaking, in previous centuries, such operations were carried out repeatedly. Finding itself in a similar position, the government resorted to confiscating all spoiled money and re-mint it into new, full-value coins. However, it was completely unclear whether it would be possible to carry out such a re-coinage on the scale of the entire state at the end of the 17th century, given the degree of development of the monetary economy. In addition, the experience of previous re-minting (the last one was carried out in England in the middle of the 16th century) was rather disappointing. Providing only a short-term stabilizing effect, the exchange of money laid a heavy burden on the treasury and literally ruined the population, who exchanged old coins for new ones by weight.

As a result, a person received an amount 1.5-2 times less than what he had before. Meanwhile, the amount of debts and taxes remained the same. As a rule, prices did not decrease either, since traders, especially small ones, preferred to reduce sales in response to a decrease in demand. Thus, only large creditors (especially banks) and government officials who received a solid salary were the winners, and the impoverished population soon began to spoil money again.

On the other hand, despite the possibility of failure, reform could no longer be delayed. The position of England continued to deteriorate, which was also facilitated by the war with France that began in 1689. Prices and government debt soared, and the economy collapsed. The situation became especially critical in 1694-95. Mass bankruptcies began in the country, and in some places panic arose. Under these conditions, the death of the constitutional monarchy, established in England as a result of the "glorious revolution" of 1688, and the secondary restoration of the Stuart house, with inevitably followed then massive repressions, became quite probable. The exchange of money became inevitable, therefore, heated discussions began in parliament and government about the most acceptable ways of carrying out the reform. It was necessary to find a solution that would, if possible, combine the interests of the treasury, the population, big business and foreign, primarily Dutch, creditors of the state.

And so, in the search for such a solution, Isaac Newton played an important role, to whom the British government specifically turned for advice. It should be emphasized that such a clear recognition of the authority of scientists in solving state issues was not accidental and was based on long-standing traditions dating back to Francis Bacon. At the same time, interest in the work of scientists on the part of politicians and religious leaders especially intensified in the era of the Restoration, when the continuous enmity between the king and parliament, as well as between various churches and confessions, caused a crisis of trust in existing institutions and created a worldview vacuum in the country, for filling which it was it is necessary to find some fundamentally new and, at the same time, trustworthy global guidelines.

It is in these conditions that the philosophy of nature of mechanical scientists, their methods of setting up experiments, the rules for conducting scientific discussions, etc., are beginning to be seen as a long-awaited path to solving the most pressing socio-political and religious problems, as a way out of the chaos into which in the XVII v. plunged all of Europe, including surviving the civil war and continuing to be in a state of social tension, England.

(For more details on the links between natural science and socio-political problems in Europe and, especially, in England in the seventeenth century, see.)

Newton's contemporaries perceived the scientific achievements of scientists not only and even not so much as a simple multiplication of positive knowledge about the laws of nature, but as proof of man's ability to establish the same unshakable order on Earth that scientists have already discovered in the sky. It is not surprising, therefore, that many British statesmen of this era were seriously interested in science, and scientists (R. Boyle, E. Halley, J. Locke, I. Newton, etc.) were often appointed to high posts, introducing into the political life of the country typical for scientific research, openness of discussion, depth of analysis, courage and novelty of approaches to solving problems.

One of the most striking examples of such a commonwealth of scientists and politicians was the monetary reform under consideration, the authors of which, in addition to Isaac Newton, were the philosopher, ideologist of parliamentarism, physician, member of the Royal Society of London John Locke (1632-1704) and student, and later a close friend of Newton, since 1695, Chancellor of the Exchequer Charles Montague (Lord Halifax) (1661-1715). The general, so to speak, political leadership of the development of the reform concept was carried out by Locke's longtime friend, the head of the Whig party, from 1697 the Lord Chancellor of England, in 1699-1704. President of the Royal Society John Somers (1651-1716). The source material for the discussions - they took place at parliamentary hearings and even in print - was a money exchange project prepared on the instructions of Montague by Treasury Secretary William Lowndes.

In order to better understand the significance of this project, as well as the essence of its subsequent changes, it is necessary to take into account the fact that the main problem of the reform was its colossal cost. Therefore, when drawing up and discussing the project, it was necessary first of all to decide at whose expense the reform would be carried out, and since all strata of society were interested in the normalization of money circulation, it would seem that every resident of the country who had money had to pay for the reform. In other words, the exchange of money should have been carried out as it was done in the old days: the treasury took upon itself the costs of re-coinage, and the population exchanged old coins for new ones by weight, i.e. at the real cost of the surrendered silver.

However, as noted above, the replacement of coins by their weight ruined the population and, as a result, further undermined the economy of the state. That is why Lound proposed to exchange money not by weight, but at face value, which would have cost the treasury, according to his calculations, £ 1.5 million. At the same time, in order to partially compensate for these huge, at that time, costs, it was proposed to simultaneously devalue the pound sterling by 20% (by reducing the content of silver in it), as well as oblige the population to pay half of the costs of coinage.

J. Locke spoke in the discussions as a sharp opponent of devaluation, which could undermine the confidence of foreign creditors in England and cause serious damage to domestic banks. At the same time, Locke proposed to temporarily leave the spoiled coins in circulation, reducing their value to the value of the silver actually contained in them. In turn, Newton believed that devaluation was inevitable, but put forward, however, a radical proposal that the exchange should be carried out as Lound had proposed, but not entirely at the expense of the treasury. As for the inevitable rise in prices during devaluation, Newton proposed to create a special ministry to control them.

Unfortunately, we do not know how exactly the disputes about the ways of carrying out the reform took place. It is only known that the final draft, which Montague, as head of the Treasury, successfully defended in parliament, was not a compromise "golden mean", but a paradoxical symbiosis of the most radical proposals of Lound, Locke and Newton. So, the first was taken the idea of ​​a swift one, in order to avoid further damage to coins, exchange of money at face value, from the second - the refusal of devaluation in order to preserve the inviolability of the national monetary unit, and, finally, the idea of ​​exchanging money entirely at the expense of the treasury was taken from Newton. Moreover, the latter was motivated by the fact that all the costs of exchanging money should be borne by the government, which, willingly or unwillingly, brought the country to a crisis.

At the end of 1696, the Parliament of England adopted a package of laws that ordered citizens, within a specified and very short time, to hand over to the treasury all the spoiled money they had and after a while receive in return (at par!) New, full-value coins. At first, when exchanging money, there was an acute and extremely severe shortage of cash for the economy, since the Mint was completely unable to cope with the sharply increased load. However, after Newton took over the leadership in 1696, the production of money was quickly increased almost tenfold.

(This result was achieved precisely by putting things in order and modernizing some of the technological processes, as well as by significantly expanding the production capacities of the Mint, including the creation of its branches in a number of cities (the branch in Essex was headed by the astronomer E. Halley), the construction of mobile machines for minting money, etc.)

By the end of 1697, the cash deficit, which literally paralyzed trade, was eliminated and the business life of England resumed in full. At the same time, the treasury, collecting taxes from all the increasing trade turnover, was able to fully compensate for the losses incurred during the exchange of money within several years. Thus, the reform, carried out in the interests of the common people and business circles, turned out to be beneficial to the government.

In order to avoid misunderstandings, it should be emphasized that the exchange of money on such a grand scale could not do without excesses and abuse. So, some banks close to government circles profited from this operation, and a considerable number of people did not have time or could not exchange their money on time and, as a result, suffered losses, although, it should be admitted, when exchanging money by weight, these losses were much more. On the other hand, it is important to remember that the authors of the reform were sober and state-minded people. Therefore, the exchange of money at face value was not a manifestation of their altruism or the desire to make amends for the government's miscalculations. Rather, we are dealing with the birth of a fundamentally new and unusually bold financial policy aimed at stimulating the national economy.

The money exchange cost the treasury 2.7 million pounds, which was then almost one and a half of its annual income. Of course, before there were wise rulers who understood that for the sake of the prosperity of the state, one should not ruin one's people with exorbitant extortions. However, putting forward a project according to which the devastated treasury had to pay the population a huge amount of money to save itself, demanded a truly "Copernican coup" in the idea of ​​the role of money in the economic life of the state.

(The government of England had to borrow funds for the reform from large bankers and merchants who sought to normalize the country's monetary circulation, as well as from the Netherlands (the main creditor and trading partner of England), interested in the stability of the pound sterling.)

In order to better understand the boldness and uncommonness of the Great Re-coinage, it makes sense to recall some much later episodes of Russian history. Thus, it is well known that the main drawback of the manifesto on the abolition of serfdom in Russia was the introduction of a ransom for land. In an effort to shift the costs of emancipating the peasants onto themselves, the Russian government obliged the former serfs to pay huge (due to the accumulation of interest) and literally ruined them taxes ("redemption"), which were canceled only after the 1905 revolution. Meanwhile, already at the end of 60 -x years XIX century. Prominent Russian economist V.V. Bervy-Flerovsky, in his articles, called on the government of Alexander II to at least reduce the redemption payments, explaining in detail that soon, due to the growth of consumption and the intensification of business life of the peasants who are now crushed by taxes, the treasury will receive much more than it initially lost. To the authorities, however, such a proposal seemed so wild that its author was declared insane. Subsequently, Bervy-Flerovsky left Russia forever.

In the mid 70s. last century D.I. Mendeleev put forward a proposal to exempt the Russian oil fields from excise duties. Based on a deep study of domestic and foreign experience, Mendeleev explained to the Minister of Finance M.Kh. Reitern that these excise taxes (their value was only 300 thousand rubles a year) stifle the nascent industry. Refusal from them will be rewarded by the rapid development of oil fields and will result in multimillion-dollar income. Reitern initially called these proposals "professorial dreams." However, later he nevertheless listened to the advice of the scientist and canceled the excise tax, which gave impetus to the rapid development of the oil refining industry and soon allowed Russia to abandon the import of American kerosene.

Apparently, the decision of the Minister of Finance to follow Mendeleev's recommendations was in no small measure influenced by the modest amount of excise tax and, therefore, a small degree of risk. In those cases, when it comes to large-scale projects affecting the economy as a whole, any proposals to limit treasury revenues in the name of the country's future prosperity are perceived by statesmen as just another "dream" that is completely unrealizable in real life.

(In one of his speeches, Yegor Gaidar explained to the deputies of the Supreme Soviet of the USSR that full compensation to citizens of their depreciated deposits would require an amount equal to 6 quarterly budgets of the country. The value of this figure made a huge impression on the deputies. Thus, we are dealing with an amount equal in size (on a relative scale, of course) to that which the British had to pay during the reform of the late 17th century.)

In principle, such a reaction can be understood. Indeed, any attempts to follow the advice of theorists when the financial system is undermined will inevitably lead to the formation of budget "holes", which can be plugged either by printing unsecured money or through huge external loans. Moreover, in both the first and the second (albeit to a lesser extent) case, we will get an outbreak of inflation, which will quickly nullify all efforts to improve the economy.

Analyzing the problems faced by the authors of the Great Re-coinage project, it is important to take into account that the threat of inflation exists even when the economy uses metal rather than paper money. So, in the XVI century. due to the huge influx of silver from South America, prices for basic products have increased 3-4 times on average in Europe. At the same time, the economy of Spain - the main colonial power of that time - was literally ruined by this stream of silver, turning warriors, peasants, artisans into adventurers, idlers and bots, whose easy money enriched not their own country, but Dutch merchants.

It is clear that a similar ending (albeit on a smaller scale) was possible in England as well. Of course, giving the population full-value money, instead of spoiled ones, could activate trade and, as a result, increase tax revenues to the treasury. However, the purchasing power of the collected silver was significantly lower. After all, if prices did not go down with a drop in demand after the exchange of money (by weight!) In the middle of the 16th century, then what could have prevented the rise in prices with an increase in effective demand?

In the best case, traders could simply keep the previous denominations of prices or even lower them somewhat, however, using full-weight coins, this would still mean a drop in the value of silver on the domestic market. In turn, the result of such a fall could be an outflow of silver abroad, which would undoubtedly worsen the already difficult foreign economic situation of England, which at that time was at war with France. Thus, it is understandable why the initial reform projects were much more moderate and uncompromising in nature, and Newton also proposed introducing state control over prices as a temporary measure, due to the ongoing war.

Nevertheless, in the end, a risky and burdensome option for the treasury was adopted to exchange money, which, it would seem, should only worsen the economic situation of the country. Therefore, although we do not know what prompted the authors of the reform to take this step, we have the right to pose the question: why, in fact, the Great Re-coinage not only ruined the English economy, but also became the starting point of its flourishing?

Every child knows the name of Isaac Newton, the greatest scientist who discovered the law of universal gravitation. But not everyone knows that the physicist and astronomer, philosopher and alchemist, Newton, in the era of the most severe financial crisis in England in the 1690s, actually headed the Royal Mint. Fighting the counterfeiters, Newton clashed with the most authoritative swindler in London - William Chaloner, and was ready to do anything to track him down and send him to the gallows.

Thomas Levenson. Newton and the counterfeiter. How the greatest scientist became a detective. - M .: AST, Corpus, 2013 .-- 416 p.

Download the abstract (summary) in the format or

Part one. School of thought

On Christmas Day 1642, Anna Newton gave birth to a son - so premature that the midwife recalled: at birth, he could fit into a jug with a volume of a quart (about 1 liter). The family waited a week before christening him after his father, who had died three months earlier. His father left a respectable land holding, including a farm that held the proud title of Lord of the Woolsthorpe Estate. At that time, however, the inheritance passed to the mother of little Isaac, who soon remarried.

At the age of twelve, he left home and went to the commercial town of Grantham, a few miles away, to begin his grammar school. Almost immediately it became apparent that his mind was of a different order from that of his classmates. The main curriculum - Latin and theology - was hardly difficult for him. He drew, was fascinated by mechanical inventions, and was dexterous with tools. He was fascinated by time: he designed and built a water clock, and also created a sundial, so accurate that his family and neighbors trusted the "Isaac disks" to measure their days. A more detailed picture can be obtained from the notebooks in which he made notes; the first of the surviving ones dates back to 1659. On these pages, a mind emerges, which unrestrainedly strives to cope with all the apparent disorder of the world, to find order where it was not noticed at that time.

His mother demanded that he return home and take up tending sheep and growing grain. However, when his mother gave him instructions - to watch the sheep "or to perform any other village work" - Newton most often ignored her requests. Anna's attempts to accustom Newton to rural hardships lasted nine months. He owed his salvation to two men: his own uncle, a priest and graduate of Cambridge, and his former teacher, William Stokes, who begged Newton's mother to send the young man to the university. Anna relented only when Stokes promised to pay a fee of forty shillings, which was charged to boys born more than a mile from Cambridge.

He left Woolsthorpe on June 2, 1661, and settled at Trinity College, where he was to spend thirty-five years. His mother reiterated her contempt for book scholarship and limited his university allowance to ten pounds a year. This was not enough for food, housing and tuition fees, so Newton entered Trinity College as a subsidiary - as Cambridge students were called who paid for their studies, fulfilling orders from those who were richer.

At Cambridge, Newton had to find his own path. He quickly realized that the traditional university curriculum, centered on the unshakable authority of Aristotle, was a waste of time. From his notes made during the reading, it follows that he did not read any of the obligatory texts of the thinker in full. Instead, Newton sought to master the new knowledge that seeped into Cambridge, piercing the armor of ancient authorities. He did it mostly on his own - there was no other way out, because he soon surpassed all but one or two professors who could still teach him something.

He began by studying the geometry of Euclid, then he discovered the mechanistic philosophy of Descartes and Galileo, which proposed to understand the entire material world as manifestations of matter in motion. In 1664, after two difficult years, Newton paused to summarize his studies in a document he modestly titled Certain Philosophical Issues. He did not give any definite answers. It was the work of a student just mastering the tools.

In the spring of 1664, he was to take an exam for Cambridge students to determine whether he would become one of the scholarchs of Trinity College. If Newton turned him in, he would stop being a sizer, the college would pay his upkeep and give him a small scholarship of four years from his Master of Arts degree. If it fails, it will return to the farm. Newton passed the test and received a scholarship on April 28, 1664. But after a few months, he was forced to interrupt his college studies.

The bubonic plague has returned to England. In a week in London, a thousand people died, in the next two, and by September the number of deaths reached a thousand a day. Newton took refuge in a secluded Woolsthorpe, where there was no need to fear an accidental encounter with a plague rat or a sick person.

Newton later called the major discovery of this first plague year "the method of derivatives." We now call this in an advanced form, mathematical analysis, and it remains the most important tool by which changes over time are analyzed. By March 1666, there had been no plague deaths in Cambridge for six weeks. The university reopened and Newton returned to Trinity College. However, in June, the disease flared up again, and upon hearing news of further deaths, Newton again fled home to Woolsthorpe. Returning to the farm, he shifted his attention from mathematics to the question of the force of gravity. Thanks to his insight, Newton realized that his formula allows you to determine the magnitude of this force on the surface of the rotating Earth. Newton concluded that gravity is inversely proportional to the square of the distance between any two objects.

New ideas appeared. Next was optics, a series of studies on the nature of light that would bring him his first, controversial encounter with fame in the early 1670s. Having dealt with this, Newton temporarily abandoned the question of the motion of the moon. By 1666, he had advanced enough that he could declare: "It is known thanks to the light of nature ... that the same forces should cause the same change in the same bodies ... because, emitting or ... receiving the same amount of motion, the body undergoes an equal amount of changes in its state." But for this concept to take its final form, which it received in the form of the second law of motion, it took many hours of reflection. It was with this that the next twenty years of Newton's life were filled, culminating in the creation of his main work, The Mathematical Principles of Natural Philosophy, better known as “Principles”.

Newton worked all summer. And in September there was the Great London Fire. It raged for five days, and only on September 7, it finally died down. Almost the entire city was destroyed within the walls and partly outside them, a total of 436 acres. More than thirteen thousand buildings, eighty-seven churches and the old Cathedral of St. Paul were burned down. The sixty tons of lead that covered the cathedral was melted. But as soon as the fire destroyed the terrifying, cramped slums that served as a breeding ground for infection, the plague was finally burned. That winter, there were fewer reports of deaths, and then they disappeared altogether, and by the spring it was already clear that the epidemic was over. In April 1667, Newton returned to Trinity College. During this time, he became the greatest mathematician in the world and a natural philosopher, not inferior to anyone living. But nobody knew about it. He did not publish anything and did not report his results to anyone. And this state of affairs was destined to last, in fact, two more decades.

In 1669, when Newton was twenty-six years old, his former teacher, Isaac Barrow, left him the Lucas Department of Mathematics, and from then on his life improved. He could occupy this chair as long as he pleased. This provided him with lodging, a table and about a hundred pounds a year - enough for a bachelor with no special expenses. All he had to do in return was give a course of lectures every three semesters.

Humphrey Newton, assistant and copyist of Isaac Newton (who is not in any kind of relationship with him) writes: “I never noticed that Newton indulged in rest or any pleasant pastime, because he considered lost all the time that was not spent on his research ”. His life was entirely devoted to science.

However, year after year he published almost nothing and had almost no discernible influence on his contemporaries. In 1684, in response to a request from Edmond Halley, Newton was able to show that for an object in a system of two bodies connected by attraction in accordance with the inverse square law, the only possible closed path is an ellipse with a more massive body in one of the foci. Newton described this work in a nine-page manuscript entitled "On the Motion of Bodies in Orbit." He informed Halley that the job was done and then apparently returned to his usual activities.

Halley informed the Royal Society that he had permission to publish the work in the Journal of the Royal Society as soon as Newton edited it. But the work never got done. Editing this little work, Newton worked for two years and presented his Principles.

He began with three simple statements that were supposed to end the confusion that had thwarted all previous attempts to describe motion in nature. The first is the definition of what he called inertia: "Every body continues to be held in its state of rest or uniform and rectilinear motion, as long as and insofar as it is compelled by the applied forces to change this state." His second axiom establishes the exact relationship between force and motion: "The change in the momentum is proportional to the applied driving force and occurs in the direction of the straight line along which this force acts." The latter is addressed to the question of what happens when forces and objects interact: "Action is always equal and opposite reaction, otherwise the interactions of two bodies against each other are equal and directed in opposite directions."

He began with revelation, a simple statement of fundamental truths, and then followed by five hundred pages of interpretations showing what can be deduced from these seemingly simple starting points. If twenty years ago Newton considered the force of gravity only as a local phenomenon, now it becomes the engine of the entire system of the world, the force that connects the rise and fall of the water level in the Thames or in the Gulf of Tonkin with all the observed movements of the solar system.

Then Newton allowed himself to rest. Edmond Halley received Book Three, Principles, on April 4, 1687. He spent the next three months in publishing hell. He divided the printing work between two workshops, the activities of which needed to be coordinated and controlled. Some of the sheets with mathematical formulas and illustrations engraved in wood were incredibly difficult to make. Halley was exhausted by the demands of the book — he confessed to a friend that the publication of Mr. Newton's opus had made him "forget about his duties to the Society's correspondents" and that "it cost [him] a lot of time and agony to correct the press." However, he never complained openly to Newton himself, but instead wrote to him about his "divine treatise" and "excellent work."

Halley ordered from printers a circulation of two hundred and fifty to four hundred copies. On July 5, 1687, the finished books arrived. Halley sent twenty copies to Newton. Most of the rest went on sale. At seven shillings for an unbound copy, and two shillings more for a leather-bound copy, it sold out almost immediately. Great changes were approaching in Newton's life.

The glory that swept Newton threw him out of the close circle of natural philosophers into the big world. One of the most secular people who fell into his orbit was the learned Englishman living in the Netherlands - the noble revolutionary John Locke.

From 1688 to 1690 Newton was a member of the board of the communities. Back at Trinity College, he worked on revisions to an alleged second edition of Principia. He continued to investigate the consequences of the laws of motion, and also returned to studies of optics and light, which had been delayed for more than a decade. But Cambridge had become small for him. The local society was melancholy and did not understand him at all. He aspired to London. One catch: Newton didn't need anything at Cambridge. In London, he will have to earn a living, moreover, for a good life. But how?

Part two. The Rise of the Rogue

For William Chaloner, the road to London was much easier than for Newton. He decided to get there - and set off on his way. At the same time, his story had something in common with the story of Newton. The outstanding qualities of his mind were revealed early in his precocious dexterity in evil deeds. However, as in the case of any great talent, it took Chaloneur years of hard work of thought of risk and practice to master the art of vice in all the fullness of what he was capable of - and this education, unlike Newton, had to provide himself with almost no outside help.

When his father and mother were "unable to cope with him," they sent him to study with a blacksmith making nails in Birmingham. Given his obvious natural inclinations, it was hardly possible to choose a less successful craft for him. But by the time Chaloner took up the business, nail making was becoming a less skilled and worse paid piecework job.

Small fourpence coins have always been rare, and much of them were produced by blacksmiths tired of hammering a thousand nails out of every four pounds of iron. Such forgeries were called "Birmingham groats." Chaloner's new master appears to have been involved as well. Young Will learned quickly and soon learned the basics of minting coins. No later than the early 1680s, William Chaloner left his master and went to London.

William Chaloner was completely unprepared for the shock of London. The city was huge, unimaginably larger than any other city in all of England. It had a population of nearly six hundred thousand, more than ten percent of all Englishmen, and more than the population of the next sixty cities combined.

Chaloner's first attempt to earn a little more than a piece of bread turned him into a supplier of sex toys. But this occupation has become a source of not so much easy money as crazy acquaintances. Some of his new friends aided Chaloner in his next and more successful venture, which was based on another important circumstance of seventeenth century urban life - the constant threat of infectious disease.

Real medical expertise was expensive, rare and often ineffective, and Chaloner found "a companion, no better than himself, who agreed to become a chamber-pot prophet or a charlatan doctor with him." Soon Chaloner was able to rent a house with his own income. He married and gave birth to several children. However, he got caught. Around 1690, his name surfaced in connection with a suspicion of theft. He went into hiding and eventually settled in the slums of Hatton Garden, unknown to anyone, bankrupt - he was left with only "some old closet to rest his flesh."

Chaloner became addicted to a new pursuit, applying a newly mastered technique to silvering coins, whereby "he thought it was possible to counterfeit guineas, pistols [French coins], etc., which, if well gilded and edged, could have circulated throughout the kingdom." ... He realized that it was time to act, at the very moment when England in literally money began to run out.

The old money, minted by the hammer blows of the Mint workers, was uneven and not resistant to wear and tear. Worse, they had smooth rims, which meant that anyone with a good pair of scissors and a file could cut off the edge of a coin and then polish it smoothly. The cutting of the coin became an epidemic in the 1690s, to the point that in the midst of the crisis “it often happened that what was called a shilling was actually ten, six, or four pence,” wrote Victorian historian Lord Macaulay. London had never seen anything like the new stamping machine installed at the Mint in 1662. The machine made an imprint on the rim of each coin, which protected them from being cut off.

From the very beginning of his career as a counterfeiter, William Chaloner strived for excellence - making coins that would not arouse suspicion. In 1691, armed with new tools and knowledge, he issued the first batch of counterfeit coins. The demand was so great that Chaloner couldn't keep up. The income was such that, almost overnight, Chaloner became a real rich man.

Part three. Passion

Alchemical research Newton began in 1668. In the next quarter of a century, he returned to them more than once and for a long time. He kept his work secret, according to alchemical tradition. In terms of the amount of time and effort expended, and the accuracy of laboratory tests, Newton was by far the most sophisticated and systematic alchemist in history. Newton even interrupted work on the writing of the Elements in 1686 and again in 1687 to indulge in his regular spring pursuits with fire and crucibles.

Newton's alchemical records are impressive. Written between the completion of the Beginnings and Newton's final departure from Cambridge in 1696 alone, there are at least one hundred and seventy-five thousand words about the theory and traditions of alchemy, and another fifty-five thousand words making up notes on experiments.

William Lowndes, Secretary of the Treasury, had a problem that grew more serious over the years. For several years now, it was obvious to everyone who paid attention to this that something was wrong with money in England. Namely, there weren't enough of them. Silver coins of all denominations from half a groot (two pence) to a crown (five shillings) were rapidly disappearing. From the late 1680s to the mid-1690s, the supply of these coins - the most popular in the country - declined year after year.

The reason for the crisis was the higher price of silver on the continent. In France, a certain amount of silver could buy more gold than English silver coins of the same weight in London. The traders took English silver money, melted it into ingots, sent it across the strait, bought gold - and then used that gold to buy even more silver back home. It was a kind of financial machine with a perpetual motion machine.

In September 1695, Lowndes sent a letter to the wisest men in England asking for advice. And it so happened that the greatest natural philosopher in England, without any apparent hesitation, took up the solution of the problem of money. In the process of working on the task posed by Lowndes, one thing was clear to Newton: currency criminals are rational agents responding to a simple set of incentives. The cutting of silver coins was a net profit, as was the melting down of full shillings to buy gold abroad. People will continue to pursue these profits unless they are stopped by coercion or change in the market.

Newton came up with two measures that could destroy the elementary economic logic behind the English coin fraud. First, the country had to get rid of its old, worn out currency, the quality of which was constantly declining. For this, Newton and many others recommended a complete re-stamping. All silver money in England, old and new, was to be transferred to the Mint, melted down and remade into uniform, strong, edged coins. This step alone would basically solve the pruning problem. If there are no hand-forged, borderless money in circulation, it will be extremely difficult to cut metal from new coins. But, unless the ratio of the weight to the face value of the new coins is changed, the coinage of English money will not curb the continuous outflow of silver through the strait.

To solve this problem, Newton argued, it is important to "give the packaged money stable, equal intrinsic and extrinsic value, as it should be, and thus prevent it from being melted and exported." In other words, two different sources of value for the coin had to be matched - the “internal” market price of the metal it was made from, and the “external” market price of the monarch's portrait, which turns the metal disc into legal tender. Since both silver and gold were used as money, this meant a change in their relative value. In the event that more gold was bought on the continent for English silver than could be done by buying guineas at face value, the amount of silver should be lowered per shilling, which would make Dutch or Spanish gold more expensive in terms of English silver money. Such devaluation, done correctly, would eliminate the price differentials that were so successfully exploited by currency pirates.

Underneath the devaluation argument, there was an idea that could raise concerns: money should not be considered just a thing, a material object clinking in a wallet. They should be thought of as a member of the equation, as an abstraction, a kind of variable that can be analyzed mathematically - which, in essence, was what skillful traders did whenever they played in the market in Holland against the market in London.

John Locke was the opponent of devaluation. Since 1691, Locke defended a firmly fixed monetary system as a social need, as a guarantor of the stability of the state. Locke's point of view, of course, won out. When Parliament finally approved the re-coinage on January 17, 1696, it stipulated that the new coins would retain the same weight.

On March 19, 1696, Newton received a letter from Charles Montague, Chancellor of the Exchequer, notifying him that the king had ordered "Mr. Newton be appointed as Keeper of the Mint."

In the 1690s, for most, paper money was an oxymoron, as funny and self-contradictory as a wise fool or a cowardly lion. The paper couldn't be real money. But the price of the war and the decline in the quality of the minted coin caused the need to come up with something that could become a means of mutual settlement between buyers and sellers, debtors and creditors, and this spurred the process. The idea behind the Bank of England was not new.

In its final form, the Bank was supposed to provide a very simple service. The rich would contribute the money that constitutes the capital of the Bank, and then the Bank would lend that money - and only that money - to the government. Depositors accessed their deposits in three ways. They could keep a "book or paper" in which their financial transactions were entered - the prototype of a bank book. They could give written pledges to pay up to the size of their contribution — prototype checks. Most importantly, they could keep their money in the form of “circulating cash,” which the Bank promised to accept on demand and exchange, in whole or in part, for hard currency. (The clerks noted the installments on the bill itself.)

By lending the full amount of its deposits (and soon enough more) to the government and issuing banknotes in the amount of capitalization that depositors could provide, the Bank of England performed a real economic miracle - created capital out of nothing. This was the birth of what became known as the fractional reserve banking system, the backbone of modern finance (or fractional coverage). A fractional reserve bank, acting on the condition that only a small percentage of depositors at some point demand their deposit back, can lend more money than its total capital.

Bodies regulating the banking system can use the reserve requirement - how much cash, as a percentage of the loan, the bank must keep on hand - as a tool to reduce or increase credit and thus theoretically have the ability to prevent the economy from becoming neither too sluggish nor excessive. But the gap between this theory and practice may not be as small as economists would like.

But the unified nature of banknotes also meant that, in addition to their benefits, they also entailed potential risks: what one person could write on paper, another could copy. The raw material for paper money was easy to find, and there were so many printers and engravers in London that, of course, there were those who were willing to sacrifice their honesty for a fee.

two weeks after the Bank received its charter, the directors issued an official decision that "since banknotes in circulation as cash can be counterfeited, to prevent this, we order them to be made on embossed marble paper." In fact, the first paper money issued by a bank in the world was put into circulation in June 1695. They caught on immediately. By 1697, nearly seven hundred thousand pounds were in circulation in cash, and this new cash quickly took on a life of its own. The five pounds Mr. Smith brought to the bank on Tuesday turned into ten by Wednesday: five went to support the army in Flanders, and another five Smith could use as cash bills. This simple trick was the first of the new forms of monetary circulation that soon turned London into the financial center of Europe and, a century or so later, the whole world.

For Chaloner, marbled paper was not a big obstacle. He knew at least one master who could forge it, and Chaloner himself and his associates were dexterous enough to imitate the handwritten notes on each note. His forgeries were in circulation for at least two months before the first was discovered on August 14, 1695.

Thanks to the first discovered counterfeit banknote, people from the bank went to the printer, who copied the marble pattern. The printer reported on Chaloner, who in turn played an excellent two-move game. He provided the investigation with important information in exchange for freedom.

Newton entered service at the Mint on May 2, 1696. He immersed himself in papers and meetings, took on decisions that no one else wanted or could make. The degree of negligence he encountered at the Mint shocked him. On May 6, just four days after arriving, he sent the Treasury - in an extremely respectful manner - a proposal to check the quality of the work of the carpenters and workers before paying their bills.

Getting to the heart of the matter, Newton immediately set about a thorough study of every operation taking place at the Mint. He brought the rigor developed over years of painstaking laboratory work into every step of making raw metal legal tender. He followed his principle - not to be afraid to get your hands dirty. As he explained to his assistants, his rule was not to trust anyone's calculations, “no eyes but their own.”

The minting machines could produce a maximum of fifteen thousand pounds a week. Thus, it would take almost nine years to produce the seven million pounds needed to replace the entire mass of silver coins. The Treasury ordered the Mint to increase production to thirty to forty thousand pounds a week.

A new furnace was squeezed into the smelter, and then another. Under Newton's supervision, a second smelter was built on the east side of the Tower walls. Eight new metal rolling machines and five new embossing presses were installed. Newton applied the same empirical approach to humans. To ensure that none of this army's efforts were wasted, he - probably for the first time in history - researched the timing of a worker's movements. Newton found the ideal pace: if the press works slightly slower than the human heart, striking 50-55 times per minute, people and machines can mint coins for many hours in a row during one shift. These beats set the rhythm to which Newton subdued the entire Mint.

By the late summer of 1696, the people and machines of the Mint had reached a record output of one hundred thousand pounds in six days - unprecedented not only for the English Mint, but for all of Europe. B O Most of the available silver was re-minted into new coins by the end of 1697, and the entire project was largely completed by mid-1698. The Mint sold those additional machines to deal with the national crisis. By that time, the Mint, under the leadership of Newton, had completely re-minted the stock of English silver money, a total of 6,840,719 pounds. The total cost of the project was enormous - about 2,700,000 pounds, with most of this cost attributable to the loss of metal in cut coins, which were accepted for re-minting at face value. But at this price, England acquired completely new silver money to buy, sell and fight.

Part five. Positional battles

Newton's detective career began with the extremely annoying case of the disappearance of a set of stamps from the Mint. William Chaloner, sitting in prison, claimed that he was slandered, and the stamps disappeared due to an oversight (ooze of intent) by the employees of the Mint. Several criminals, convicted in other cases, testified against Chaloner, but for Newton in August 1696, Chaloner was just another murky character appearing in a huge obscure pile of information with which he had to work. Newton knew that the witnesses facing the gallows would say anything to avoid it, so Chaloner's true role in the crime under investigation was unclear. Under these circumstances, there was little chance of getting him convicted.

After the first series of interrogations, Newton paused to figure out how to properly conduct an investigation. Dealing with the threat of counterfeiting required witness testimony and physical evidence so compelling that even the softest jury would plead guilty to the suspects. By early 1697, a network of informers, undercover agents and street thugs had made Newton the most powerful investigator London has ever seen.

Chaloner, like Newton, understood that counterfeiting was inevitably associated with betrayal. The counterfeiter, forced to turn to others to get his wares running, knew that some of his allies might be arrested and then try to save their own skins. Chaloner already guessed that the only sure way to put coins on the market without giving them over to anyone openly is to do it from inside the Mint.

Chaloner spoke to Parliament denouncing corruption in the Mint and proposing improvements if allowed there. Newton managed to defend his position and prevent Chaloner from entering the Mint.

Since Chalonera did not manage to get to the Mint, and the money ran out, he had to take up the old thing - making counterfeit money. He rented a farmhouse and started production on a grand scale. However, it did not come to sales. He was reported and arrested, but Chaloner was able to bribe witnesses, and the case fell apart before a jury trial.

Part six. Newton and the counterfeiter

Chaloner was caught faking malt lottery tickets.

Chaloner ended up in jail. While the Mint Overseer had no formal reason to worry about the malt lottery (it was a Treasury issue), he managed to persuade the authorities to let him take over the case. Thus, all intermediaries were eliminated. The game was reduced to its essence: Isaac Newton vs. William Chaloner.

The prison did not rob Chaloner of his confidence. The malt ticket plates were hidden, and Chaloner claimed he had nothing to do with them. When he was taken, he had no fake tickets.

By January 1699, Newton spent almost all of his working time at the Mint, interrogating witnesses whose testimony was to form the basis of the trial. Newton took many readings, focusing on quantity over quality. Over time, Newton discovered that the wives or mistresses of Chaloner's partners whom he had betrayed were often the most valuable leads. This kind of evidence was readily heard by the jury - eyewitness testimony of how the crime was committed. The number of witnesses grew longer, and with it the list of evidence of crimes.

His approach was beginning to take shape. The individual details reported by this or that witness were not so important. The main thing is that a whole army of men and women was ready to confirm: they saw and heard that Chaloner made shillings / half crowns / crown of a pistol / guinea, and perhaps helped him - seven years, five, three years ago or last summer. Newton wanted to make sure it would make such an impression on the jury that the details would no longer matter.

Newton put an informant in Chaloner's cell, who managed to gain confidence, and the information flowed to Newton.

The court session began in early March 1699. The English court in the late seventeenth century was swift and ruthless. There were no lawyers. The prosecutors in most criminal cases were the victims themselves or local authorities. Chaloner had to defend himself. There was no presumption of innocence. It was necessary to answer the accusations - either directly insist on his innocence, or convince the court that the testimony of the prosecution witnesses was not credible.

The prosecution witnesses were convincing, albeit not always truthful. Chaloner said that the court must admit: the witnesses lied, they slandered him in order to save their own skins - and this accusation was at least partly fair. Chaloner was “very cocky in court and challenged Mr. Registrar [the judge] on more than one occasion,” wrote one observer. But it was clear that neither the judges nor the jury would believe perjury accusations more than Chaloner's ex-associates' accounts of specific crimes. The next day, March 4, 1699, the prisoner heard his sentence: "Death by hanging."

On March 19, Secretary of State Vernon delivered nine death sentences to William III. Two of the convicts received a royal pardon and survived. But Chaloner "was too famous to be trusted."

Epilogue. He Couldn't Count Human Madness

On Christmas Day 1699, Newton took over as Master of the Mint. The position was very lucrative. In addition to a salary of five hundred pounds a year, the master was paid for every pound of metal worked at the Mint. In his first year, Newton received £ 3,500 - enough to convince him to finally quit his professorship at Cambridge, where he had not appeared for a long time, on a frivolous scholarship of one hundred pounds. Newton averaged about £ 1,650 a year during his twenty-seven years as a foreman. Never knowing true poverty, he was on the right track to become truly rich.

In the new century, Newton again turned to some of the questions of natural philosophy that occupied him in his youth. At the end of 1703, he became president of the Royal Society after another death of its old antagonist Robert Hooke, and just a couple of months later presented the Society with the manuscript of the second of his two great books, Optics.

However, despite the greatness of the vision reflected in Optics, the science in this book was old. The newest experiments in question were twenty years old, and most are ten years older. By the early 1700s, and possibly a decade earlier, Newton had moved away from natural philosophy. In his remaining years, he focused on the historical and religious approaches to a fuller knowledge of God.

Despite this, Newton continued to play an important public role. The Mint was still taking an incredible amount of time and effort, especially when the fate of the Great Re-coinage became clear. As Newton predicted, the coinage was a successful industrial operation, but failed as a monetary policy. The decision to re-mint coins without devaluation had a predictable result: silver continued to flow across the English Channel and gold was bought on the continent at prices lower than the proposed exchange rate of the silver shilling to the gold guinea. By 1715, most of the new silver money minted before 1699 had disappeared. In response, more or less by accident, the British currency switched from silver to a new gold standard.

At the same time, Newton was well aware of the limitations of the idea of ​​metal money as the only possible or "correct". He believed that paper notes, with the help of which the government borrowed at interest, could restore the deficit in the metallic money supply. But the new function of money was difficult to understand - even his own analytical skills were not enough. In the last decade of his life, Newton learned from his own experience how easy it is to succumb to promises written on elegant pieces of paper.

At first it seemed like a great idea. In 1711, English speculators formed the South Seas Company to take advantage of the opportunities presented by the War of the Spanish Succession. They intended to exploit the government's monopoly on trade with the Latin American colonies of Spain, while Spain could not maintain its own control there. As payment for the monopoly, the South Seas Company agreed to take on a portion of Britain's official debt - a tangle of bonds, bonds and lotteries issued to pay for the nation's wars. The company recapitalized the debt by lending 2.5 million to the government, and then converted the old obligations transferred by the government into shares in the new company.

The promised trade did not take place, and the company began to act almost exclusively as a kind of bank, moreover, with an innovative approach. In 1719, Parliament passed a bill allowing the South Seas Company to buy even more government bonds, and again a host of government debts were transformed into a single, easy-to-circulate form - a share of a company that could be bought and sold on the market that emerged in London's Exchange Lane. ...

Everything fell apart very quickly. Whatever it was in the beginning, the South Sea Company ultimately became a pyramid scheme. Isaac Newton was among the losers who joined last and failed first.

The editorial board of the Zolotoy Chervonets magazine has been replenished with one more member - the Royal Mint of Great Britain. The Royal Mint has a rich history, which is connected not only with the history of Great Britain, but also with the history of Russia. Starting with this issue, we begin publishing articles on the historical facts that influenced the development of the Royal Mint, which is today one of the leading in the world.

Coin minting began in Britain around the second century BC. the earliest coins are rough imitations of continental European coins, they were cast in molds. however, they subsequently began to be minted by hand - and continued to do so for the next 1,500 years.

The production of British coins ceased with the beginning of the Roman conquest. Roman coins became the universal currency in the Western Empire, and they were used to pay in Great Britain. Moreover, since the third century AD, Roman coins were minted at the mint in London. The first London Mint, of which there is a written mention, was founded by the Romans, but it lasted no more than 40 years.

After the unification of the English kingdom, the London Mint became operational again - after a 650-year hiatus. At first, its activities were fickle, but since the reign of Alfred the Great (871–899), the importance of the mint has grown steadily. from that moment on, its history became continuous.

At the time, the London Mint was just one of many. however, after the Norman conquest, the number of mints began to decline, and at the beginning of the 13th century, all coins were minted only in London and Canterbury.

Tower of London and Isaac Newton

By 1279, the London Mint had moved to the Tower, where it remained for the next five centuries. The minting process was mechanized in the 17th century, and this was attended, in particular, by Sir Isaac Newton, who was first curator and then head of the Royal Mint in 1696-1727.

Isaac Newton was appointed curator of the Royal Mint in the spring of 1696. This was a time of great activity for the mint. Here old silver coins were minted, issued under Elizabeth I. in 1699, the post of director of the Royal Mint was vacant. Although the director's position was technically lower than that of the custodian, it was more highly paid. Newton became director of the Royal Mint from Christmas 1699. Having survived all the political turmoil of those troubled times, he remained the head of the Royal Mint until his death in March 1727.

The success of the great monetary reform in Great Britain was due in large part to Newton's leadership as well as his concern for accuracy. Newton strove to ensure that the coins had the same weight and thickness, differing as little as possible from each other. Newton claimed to have achieved "much greater precision in minting coins than anyone else."

Newton's secret of success also lies in his hard work and, more importantly, in his honesty. he was a respected person who highly valued and defended his reputation, not only in scientific disputes with Leibnizem Flamsteed, but also in everyday work. it is known that he refused to bribe over £ 6,000 to sign a contract for the minting of copper coins. Sir Isaac Newton set high standards of integrity at a time when corruption was widespread.

Tower hill

At the beginning of the 19th century, in connection with the need to accommodate a new steam engine, it was decided to take the mint outside the Tower. The new habitat of the mint was Little Tower Hill. Preparatory work began in 1805, and the buildings were completed by the end of 1809. A test run of the new steam engine was given in April 1810. in 1811, the move from the Tower was fully completed, although it was not until August 1812 that the keys to the old mint were transferred to the Tower constable for safekeeping.

Lantrisant

The need to restructure the Royal Mint again began to be discussed in 1950, when the task of minting hundreds of millions of coins for the transition to another metric system was set (as a result, it took place in 1971). At the same time, the minting of coins for foreign customers did not stop at the mint. in 1967 it was announced that a new Royal Mint would be built in Lantrisant, ten miles from Cardiff, the capital of the Principality of Wales. Thus, the state policy of transferring industrial production from the capital to developing regions was supported. Work began almost immediately, and the first production line was opened by the Queen of Great Britain on December 17, 1968. The last coin minted in London in November 1975 symbolically became the gold sovereign.

The new mint, located in the green principality of Wales on the edge of the Ronda Valley, covers an area of ​​over 30 hectares. With the largest production facilities in Europe, the Royal Mint is also the only fully integrated European mint capable of independently performing all stages of coin production, including the production of blanks.