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Rh Penn had, in 1686, been obliged to make changes in the composition of the executive body, though in 1689 it reverted to the original constitution; the legislative bodies had quarrelled, and Penn could not gain his rents. The chief difficulty in Pennsylvania was the dispute between the province—i.e. the country given to Penn by the charter—and the "territories," or the lands granted to him by the duke of York by feoffment in August 1682, which were under the same government but had differing interests. The difficulties which Quaker principles placed in the way of arming the colony—a matter of grave importance in the existing European complications—fought most hardly against Penn's power. On the 21st of October 1692 an order of council was issued depriving Penn of the governorship of Pennsylvania and giving it to Colonel Benjamin Fletcher, the governor of New York. To this blow were added the illness of his wife and a fresh accusation of treasonable correspondence with James. In his enforced retirement he wrote the most devotional and most charming of his works—the collection of maxims of conduct and religion entitled The Fruits of Solitude. In December, thanks to the efforts of his friends at court, among whom were Buckingham, Somers, Rochester, and Henry Sidney, he received an intimation that no further steps would be taken against him. The accusation, however, had been public, and he insisted on the withdrawal being equally public. He was therefore heard in full council before the king, and honourably acquitted of all charges of treason. It was now that he wrote an Essay towards the Present and Future Peace of Europe, in which he puts forth the idea of a great court of arbitration, a principle which he had already carried out in Pennsylvania.

In 1694 (Feb. 23) his wife Gulielma died, leaving two sons, Springett and William, and a daughter Letitia, afterwards married to William Aubrey. Two other daughters, Mary and Hannah, died in infancy. He consoled himself by writing his Account of the Rise and Progress of the People called Quakers. The coldness and suspicion with which he had been regarded by his own denomination had now ceased, and he was once more regarded by the Quaker body as their leader. About the same time (Aug. 20) he was restored to the governorship of Pennsylvania, and he promised to supply money and men for the defence of the frontiers. In 1695 he went on another preaching mission in the west, and in March 1696 he formed a second marriage, with Hannah Callowhill, his son Springett dying five weeks later. In this year he wrote his work On Primitive Christianity, in which he argues that the faith and practice of the Friends were those of the early Church. In 1697 Penn removed to Bristol, and during the greater part of 1698 was preaching with great success against oppression in Ireland, whither he had gone to look after the property at Shannangarry.

In 1699 he was back in Pennsylvania, landing near Chester on the 30th of November, where the success of Colonel Robert Quary, judge of the admiralty in Pennsylvania—who was in the interests of those who wished to make the province an imperial colony—and the high-handed action of the deputy Markham in opposition to the Crown, were causing great difficulties. Penn carried with him particular instructions to put down piracy, which the objections of the Quakers to the use of force had rendered audacious and concerning which Quary had made strong representations to the home government, while Markham and the inhabitants apparently encouraged it. Penn and Quary, however came at once to a satisfactory understanding on this matter, and the illegal traffic was vigorously and successfully attacked. In 1696 the Philadelphian Yearly Meeting had passed a resolution declaring slavery contrary to the first principles of the gospel. Penn, however, did not venture upon emancipation; but he insisted on the instruction of negroes, permission for them to marry, repression of polygamy and adultery, and proposed regulations for their trial and punishment. The assembly, however, a very mixed body of all nations, now refused to accept any of these proposals except the last-named. His great success was with the Indians; by their treaty with him in 1700 they promised not to help any enemy of England, to traffic only with those approved by the governor, and to sell furs or skins to none but inhabitants of the province. At the same time he showed his capacity for legislation by the share he took with Lord Bellomont at New York in the consolidation of the laws in use in the various parts of America.

Affairs now again demanded his presence in England. The king had in 1701 written to urge upon the Pennsylvania government a union with other private colonies for defence, and had asked for money for fortifications. The difficulty felt by the Crown in this matter was a natural one. A bill was brought into the lords to convert private into Crown colonies. Penn's son appeared before the committee of the house and managed to delay the matter until his father's return. On the 15th of September Penn called the assembly together, in which the differences between the province and the territories again broke out. He succeeded, however, in calming them, appointed a council of ten to manage the province in his absence, and gave a borough charter to Philadelphia. In May 1700, experience having shown that alterations in the charter were advisable, the assembly had, almost unanimously, requested Penn to revise it. On the 28th of October 1701 he handed it back to them in the form in which it afterwards remained. An assembly was to be chosen yearly, of four persons from each county, with all the self-governing privileges of the English House of Commons. Two-thirds were to form a quorum. The nomination of sheriffs, coroners, and magistrates for each county was given to the governor, who was to select from names handed in by the freemen. Moreover, the council was no longer elected by the people, but nominated by the governor, who was thus practically left single in the executive. The assembly, however, who, by the first charter, had not the right to propound laws, but might only amend or reject them, now acquired that privilege. In other respects the original charter remained, and the inviolability of conscience was again emphatically asserted. Penn reached England in December 1701. He once more assumed the position of leader of the Dissenters and himself read the address of thanks for the promise from the Throne to maintain the Act of Toleration. He now took up his abode again at Kensington, and published while here his More Fruits of Solitude.

In 1703 he went to Knightsbridge, where he remained until 1706, when he removed to Brentford, his final residence being taken up in 1710 at Field Ruscombe, near Twyford. In 1704 he wrote his Life of Bulstrode Whitelocke. He had now much trouble from America. The territorialists were openly rejecting his authority, and doing their best to obstruct all business in the assembly; and matters were further embarrassed by the injudicious conduct of Governor John Evans in 1706. Moreover, pecuniary troubles came heavily upon him, while the conduct of his son William, who became the ringleader of all the dissolute characters in Philadelphia, was another and still more severe trial. This son was married, and had a son and daughter, but appears to have been left entirely out of account in the settlement of Penn's proprietary rights on his death.

Whatever were Penn's great qualities, he was deficient in judgment of character. This was especially shown in the choice of his steward Ford, from whom he had borrowed money, and who, by dexterous swindling, had managed, at the time of his death, to establish, and hand down to his widow and son, a claim for £14,000 against Penn. Penn, however, refused to pay, and spent nine months in the Fleet rather than give way. He was released at length by his friends, who paid £7500 in composition of all claims. Difficulties with his government of Pennsylvania continued to harass him. Fresh disputes took place with Lord Baltimore, the owner of Maryland, and Penn also felt deeply what seemed to him the ungrateful treatment which he met with at the hands of the assembly. He therefore in 1710 wrote, in earnest and affectionate language, an address to his "old friends," setting forth his wrongs. So great was the effect which this produced that the assembly which met in October of that year was entirely in his interests; revenues were properly paid; the disaffected were silenced and complaints