In 1707 the Act of Union created the United Kingdom of England, Scotland, Wales and Ireland. Queen Anne, the monarch in whose reign this took place, was therefore the first monarch ever to reign over the United Kingdom. Britain’s currency still contained precious metals in the reign of Queen Anne – when the Queen Anne Silver Shilling 1707-1714 was struck. A coin literally contained its own value in precious metal. So, a shilling contained the right amount of silver to be worth 12 pence.
What’s more, Britain tied her gold and silver coinages together in a fixed ratio so that, for example, twenty shilling coins always equalled a pound’s worth of gold.
This system worked unless there was a sudden increase in the value of precious metals – or worse still, as they saw in the 18th century – a sudden increase in the value of silver when compared with gold.
This is exactly what happened. A global silver shortage led to a rise in the world price and because a British shilling had to always be worth a fixed percentage of a pound’s worth of gold, these coins were worth more overseas than you could get for them here.
In 1717, the mintmaster, Sir Isaac Newton, reported that the East India Company alone had exported around £3,000,000 worth of British silver coins for profit!
Within just a few years of this shilling being struck many of the silver coins that entered circulation found their way into the melting pot or onto ships sailing abroad where they fetched up to 10% over their face value – and even more in some parts of the world.
The ‘impostor’ to the gold guinea
The Queen Anne Silver Shilling 1707-1714 has another interesting feature. These coins were approximately the same diameter and featured the same design, as the gold guinea coin – worth 21 times as much. Unscrupulous individuals would gold plate a shilling and attempt to pass it off as a guinea, making a healthy profit along the way. The most likely targets were those who did not see many gold guineas and who were least likely to notice the difference. It was a cruel irony that these people were most likely to be least able to afford the swindle.