The bill, which was the first sketch of the later Exclusion Bill, failed to pass, but its failure left the Houses excited and alarmed. Shaftesbury intrigued busily in the City, corresponded with William of Orange, and pressed for a war with France which Charles could only avert by an appeal to Lewis, a subsidy from whom enabled him to prorogue the Parliament. But Charles saw that the time had come to give way. Spain was now joining Holland, and a war with Spain would have deprived English merchants of their most lucrative branch of commerce. The refusal of supplies by the Commons hastened the king's resolve. "Things have turned out ill," he said to Temple with a burst of unusual petulance, "but had I been well served I might have made a good business of it." His concessions however were as usual complete. He dismissed Buckingham and Arlington from office. He made peace with the Dutch. But Charles was never more formidable than in the moment of defeat, and he had already determined on a new policy by which the efforts of Shaftesbury and the Country party might be held at bay. Ever since the opening of his reign he had clung to a system of balance, had pitted Churchman against Nonconformist and Ashley against Clarendon, partly to preserve his own independence and partly with a view of winning some advantage to the Catholics from the political strife. The temper of the Commons had enabled Clarendon to baffle the king's attempts; and on his fall Charles felt strong enough to abandon the attempt to preserve a political balance and had sought to carry out his designs with the single support of the Nonconformists. But the new policy had broken down like the old. The Nonconformists refused to betray the cause of Protestantism, and Shaftesbury, their leader, was pressing on measures which would rob Catholicism of the hopes it had gained from the conversion of James. In straits like these Charles resolved to win back the Commons by boldly adopting the policy on which the House was set.
The majority of its members were still a mass of Cavalier Churchmen, who regarded Sir Thomas Osborne, a dependant of Arlington's, as their representative in the royal councils. The king had already created Osborne Earl of Danby and raised him to the post of Lord Treasurer in Clifford's room. In 1674 he frankly adopted the policy of Danby and of his party in the Parliament. The policy of Danby was in the main that of Clarendon. He had all Clarendon's love of the Church, his equal hatred of Popery and Dissent, his high notions of the prerogative tempered by a faith in Parliament and the law. His policy rested like Clarendon's on a union between the king and the two Houses. He was a staunch Protestant, and his English pride revolted against any schemes which involved dependence on France. But he was a staunch Royalist. He wished for a French war, but he would not force the king to fight France against his will. His terror of Popery failed to win him over to any plans for a change in the succession. The first efforts indeed of the king and his minister were directed to strengthen James's position by measures which would allay the popular panic. Mary, the Duke's eldest child and after him the presumptive heir to the Crown, was confirmed by the royal order as a Protestant. It was through Mary indeed that Charles aimed at securing the Prince of Orange. The popularity of William throughout the Protestant world was great; and in England, as the terror of a Popish king increased, men remembered that were James and his house excluded from the throne William as the king's nephew, the son of his sister Mary and the grandson of Charles the First, stood next in succession to the Crown. The Prince was drawn by his desire to detach England from the French alliance into close connexion with Shaftesbury and the leaders of the Country party, and already pledges from this quarter had reached him that he should be declared heir to the throne. It was to meet this danger that Charles resolved to offer William the hand of the Duke's daughter, Mary. Such a marriage secured James against the one formidable rival to his claims, while it opened to William a far safer chance of mounting the throne at his father-in-law's death in right of his wife. The prospect too of such a Protestant succession might well allay much of the panic which was spreading through the country as men looked forward to the accession of a Catholic king.