• Choose a category
• All
• Classic-Fiction

His intensive surveillance of Dutch affairs, coupled with his early upbringing cheek by jowl with the Dutch settlers in North America, gave Downing an unparalleled insight into the operations of the Dutch republican state – a state he regarded as significantly more efficient and financially buoyant than its English monarchical counterpart. What is of particular interest to us here is the way Downing’s close contact with the Dutch Republic, coupled with his experience as an administrator during the Commonwealth period, led him to advocate explicitly Dutch-derived fiscal measures for the consistently financially embarrassed government of Charles I, in particular a system of taxation which would support an adequate military force to protect the state. ‘Two things coloured and shaped Downing’s approach. The first was his experience of this in the Dutch context. The second was his understanding that this was driven by a Dutch commitment to finance its military endeavours as a matter of priority.’34

From The Hague, Downing explained to his English correspondents time and again that a precondition for the success of the Dutch VOC and WIC was the States General’s willingness and ability to protect it with military convoys, paid for by the state. The profit and prosperity this produced led in turn to the Dutch being prepared to put up with heavy taxes. ‘It is strange to see,’ Downing reported, ‘with what readiness this people doe consent to extraordinary taxes, although their ordinary taxes be yet great.’ He noted with approval that Dutch finance relied upon excise duties (exacted pro rata on all goods imported through Dutch ports), while keeping customs duties (charged to individuals carrying goods into the Republic and based on discretionary valuation) low. And he encouraged the English administration to adopt a similar strategy.

Downing’s most important contribution to English fiscal policy, however, was the importation of the underlying principles of state banking that led ultimately to the formation of the Bank of England. The details of this are beyond the scope of this book, but recent academic studies agree that his influence laid important groundwork for reforms introduced after 1688. ‘Downing’s scheme used parliamentary legislation to underwrite loan repayments with the authority of the state (rather than simply of the monarch personally)’. The Earl of Clarendon, historian of this period, and passionate opponent of Downing’s fiscal policies, has left us a clear account of the innovative nature of his new measures:

Downing […] told them [that] by making the Payment with Interest so certain and fixed, that […] it should be out of any Man’s Power to cause any Money that should be lent To-morrow to be paid before that which was lent Yesterday […] he would make [the] Exchequer (which was not Bankrupt and without any Credit) the greatest Bank in Europe.35

‘All Nations would sooner send their Money into [it],’ Clarendon continued, ‘than into Amsterdam or Genoa or Venice.’ Such an English bank, in other words, would be as powerful and profitable as those of the three most prosperous European republics. The tone of Clarendon’s remarks makes it clear how opposed to such strategies the old Royalists were after the Restoration. But it was Clarendon who fell from office, and Downing who continued to rise, carrying with him his enthusiasm for fiscal reform on a Dutch model.

Throughout his career – whatever the form of government in England, and whichever political party was in power – Downing worked tirelessly to reform English financial institutions so as to bring them in line with those he regarded as so supremely successful in the United Provinces. He did so in spite of the fact that England was a monarchy, while the United Provinces was a long-established republic. In so doing, he put in place the machinery for the ‘constitutional monarchy’ which would follow the arrival of William III in England in 1688.

There is, surely, no small irony in the fact that the foundations