When it was first reported that The Bank of England said that the current economic crisis, triggered by Coronavirus, was the worst for three hundred years, I couldn't think to what year they were referring. Perhaps it was The Glorious Revolution of 1688, or maybe The Jacobite Rebellion of 1715, or more likely The South Sea Bubble of 1720. None of these proved to be the year The Bank was referring to; it was 1706. The Bank reported that GDP declined by 15.3% in 1706 and is forecast to fall in 2020 by 14%. For the life of me I couldn't think of the significance in economic terms of 1706.
I duly looked up the timeline for the year to find that it was the year the terms of The Act of Union were agreed between London and Edinburgh; this seemed an unlikely cause of an economic crisis for the cost was relatively small in terms of the bribes paid to Scottish Parliamentarians. Next I saw that Twinings Tea shop at the bottom of Fleet Street opened. Surely that couldn't possibly have caused a crisis. Obviously not. So why 1706? Then I looked wider and also remembered that 1706 witnessed Marlborough's second great victory in The War of The Spanish Succession. The Battle of Ramillies. There in fact lay the answer.
We were involved in this European War as part of the long cycle of wars with France, from 1688 to 1815, to ensure that France did not come to dominate Europe, and thus threaten our own freedom. Marlborough had won perhaps his greatest victory the previous year at Blenheim, and was to go on to achieve two further notable triumphs at Oudenarde (1708) and at Malplaquet (1709).
War as we all know is a strain on the Exchequer. This war proved to be a greater strain in its immediate economic impact amazingly than either The Wars against Napoleon or the two World Wars. Put another way the economy is in a worse state today than in either of the two World Wars of the last century. A sobering thought.
Marlborough's campaigns were costly in themselves and the war as a whole badly affected our international trade. It has been estimated that the war cost £1m pa to keep the Army in Europe, with the total cost of the war pa, taking all factors into account, coming out at a staggeringly high £9m.
In addition The Times quoted Prof Ritschl of The LSE as saying there were poor harvests which also damaged the economy. I don't agree as the decade of poor harvests was the 1690s, and thus their effects were much diminished. In fact 1706 was actually in the middle of a run of good harvests from 1704 to 1706. The really bad winter was 1709, the year of The Great Frost. Thus I believe that The Bank of England's analysis must be based almost solely on the direct and indirect costs of the war.
There is, however, another story linked to the cost of the war, and that story is political, with far more lasting consequences for us than that long economic crisis. The Government of the day was Whig and to meet the escalating cost of the war they increased taxation which fell heavily on Tory voters. The Whig Government fell as a consequence in 1710, and along with it Marlborough, who had to flee abroad having been accused of corruption by the incoming Tory Government. The Tories won that Election in 1710 and again won in 1713 (at the time Parliaments only lasted for three years under The Triennial Act of 1694). In fact the Tory majority in 1713 was massive; 370 MPs to the Whigs' 177.
But the Tories were deeply divided between the Leader, The Earl of Oxford, and the flamboyant Boris like figure of Viscount Bolingbroke. Oliver Goldsmith said of Bolingbroke that he had been seen to 'run naked through the park in a state of intoxication'. Bolingbroke's friend, Jonathan Swift, said he wanted to be thought of as a British Alcibiades (the great Athenian statesman) - ring any bells?! Although legislation had been passed in 1701 to ensure that on Queen Anne's death the crown would pass to the protestant House of Hanover rather than to her catholic half brother, James the Old Pretender, Bolingbroke flirted with Jacobitism. He was the darling of the mob and of many influential Tory landowners. But in 1714 Oxford and The Tories fell spectacularly from power. Forced from Office not by the Whigs but by the division and ill feeling between Oxford and Bolingbroke. Oxford brought a charge of corruption against Bolingbroke which failed, and he was forced from office as a consequence. Queen Anne appointed a caretaker Government, fearing that a Bolingbroke administration would restore her half brother to the throne. Four days later she died. The Whigs acted quickly in inviting George of Hanover (George I) over from Germany and in the General Election held in early 1715 (triggered by the accession of a new monarch) they won a large majority as fear of a catholic Stuart Restoration frightened the country. Bolingbroke fled to France and took office under James Stuart. His days of political power were over. He later changed sides once more after the defeat of the 1715 Jacobite Rebellion, and died at his home in Battersea in 1751. We remained outside the influence of Absolutist France and began in George I's reign to develop our fledgling democracy under Whiig leadership, notably that of Robert Walpole.
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