History of The English Fiscal System - Systematising Finance

Systematising Finance

With the union of England and Normandy under William the Conqueror, the idea of settled administrative methods became fixed and of special importance in the financial sphere. The systematizing spirit, so characteristic of both the Norman and Angevin kings, produced the great institution of the Exchequer with its judicial and administrative sections and its elaborate forms of account and control. But even before this, the Domesday Book, now recognized as having a purely fiscal object (in Maitland's words a tax book, a geld book), shows the movement towards careful observation of all sources of revenue. It is clear that William I of England initiated a policy which was followed by his successors despite the serious difficulties during the anarchy that subsisted during Stephen's reign. The obscure question as to the real origin of the special contrivances employed by the Exchequer is, strictly speaking, irrelevant to the financial inquirer, who may be content to hold that, other than the existence of a few Old English analogies, the system, as it appears in the 12th century, is a product peculiar to the conceptions of fiscal organization formed by Norman subtlety. Indeed, its importance lies in the manner in which the institution held together, focussing as it did on the revenues and expenditure of the kingdom. The picture presented by the Dialogue of the Exchequer (c. 1176) is that of a comprehensive system which secured the receipt of royal income by providing a thorough audit of accounts, employing processes adapted to the circumstances of the time. It is, in fact, through the description of financial institutions that it is possible to ascertain the forms of revenue held by the crown. Thus, the ingenuity expended on the Exchequer's administrative machinery had as its aim the increase of the king's resources, a subject in which all politically involved churchmen and lawyers were deeply involved. The history of the English fiscal system affords the best known example of continuous financial development in terms of both institutions and methods. Although periods of great upheaval occurred from the time of the Norman Conquest to the beginning of the 20th century, the line of connection is almost entirely unbroken. Perhaps the most revolutionary changes occurred in the 17th century as a result of the Civil War and, later, the Glorious Revolution of 1688; though even then there was no real breach of continuity. Weights and measures were among the earliest tools invented by man. Primitive societies needed rudimentary measures for many tasks: constructing dwellings of an appropriate size and shape, fashioning clothing and bartering food or raw materials. Man understandably turned first to parts of his body and his natural surroundings for measuring instruments. Early Babylonian and Egyptian records, and the Bible, indicate that length was first measured with the forearm, hand, or finger and that time was measured by the periods of the sun, moon, and other heavenly bodies. When it was necessary to compare the capacities of containers such as gourds or clay or metal vessels, they were filled with plant seeds that were then counted to measure the volumes. With the development of scales as a means for weighing, seeds and stones served as standards. For instance, the "carat," still used as a mass unit for gems, is derived from the carob seed. As societies evolved, measurements became more complex. The invention of numbering systems and the science of mathematics made it possible to create whole systems of measurement units suited to trade and commerce, land division, taxation, and scientific research. For these more sophisticated uses, it was necessary not only to weigh and measure more complex things it was also necessary to do it accurately time after time and in different places. However, with limited international exchange of goods and communication of ideas, it is not surprising that different systems for the same purpose developed and became established in different parts of the world - even in different parts of the same country. THE ENGLISH SYSTEM The measurement system commonly used in the United States today is nearly the same as that brought by the colonists from England. These measures had their origins in a variety of cultures –Babylonian, Egyptian, Roman, Anglo-Saxon, and Norman French. The ancient "digit," "palm," "span" and "cubic" units of length slowly lost preference to the length units "inch," "foot," and "yard." Roman contributions include the use of 12 as a base number (the foot is divided into 12 inches) and the words from which we derive many of our present measurement unit names. For example, the 12 divisions of the Roman "pes," or foot were called unciae. Our words "inch" and "ounce" are both derived from that Latin word. The "yard" as a measure of length can be traced back to early Saxon kings. They wore a sash or girdle around the waist that could be removed and used as a convenient measuring device. The word "yard" comes from the Saxon word "gird" meaning the circumference of a person’s waist. Standardizing various units and combining them into loosely related systems of measurement units sometimes occurred in fascinating ways. Tradition holds that King Henry I decreed that a yard should be the distance from the tip of his nose to the end of his outstretched thumb. The length of a furlong (or furrow-long) was established by early Tudor rulers as 220 yards. This led Queen Elizabeth I to declare in the 16th century, that henceforth the traditional Roman mile of 5000 feet would be replaced by one of 5280 feet, making the mile exactly eight furlongs and providing a convenient relationship between the furlong and the mile. Thus, through royal edicts, England by the 18th century had achieved a greater degree of standardization than other European countries. The English units were well suited to commerce and trade because they had been developed and refined to meet commercial needs. Through English colonization and its dominance of world commerce during the 17th, 18th, and l9th centuries, the English system of measurement units became established in many parts of the world, including the American colonies. However, standards still differed to an extent undesirable for commerce, even among the 13 American colonies. The need for greater uniformity led to clauses in the Articles of Confederation (ratified by the original colonies in 1781) and the Constitution of the United States (ratified in 1790) that gave Congress the power to fix uniform standards for weights and measures. Today, standards supplied to all the states by the National Institute of Standards and Technology assure uniformity throughout the country.