On the 15th of July Monmouth was executed. Daniel Foe found it convenient at that time to pay personal attention to some business affairs in Spain. His name suggests an English reading of a Spanish name, Foa, and more than once in his life there are indications of friends in Spain about whom we know nothing. Daniel Foe went to Spain in the time of danger to his life, for taking part in the rebellion of the Duke of Monmouth, and when he came back he wrote himself De Foe. He may have heard pedigree discussed among his Spanish friends; he may have wished to avoid drawing attention to a name entered under the letter F in a list of rebels. He may have played on the distinction between himself and his father, still living, that one was Mr. Foe, the other Mr. D. Foe. He may have meant to write much, and wishing to be a friend to his country, meant also to deprive punsters of the opportunity of calling him a Foe. Whatever his chief reason for the change, we may be sure that it was practical.
In April, 1687, James the Second issued a Declaration for Liberty of Conscience in England, by which he suspended penal laws against all Roman Catholics and Nonconformists, and dispensed with oaths and tests established by the law. This was a stretch of the king's prerogative that produced results immediately welcome to the Nonconformists, who sent up addresses of thanks. Defoe saw clearly that a king who is thanked for overruling an unwelcome law has the whole point conceded to him of right to overrule the law. In that sense he wrote, "A Letter containing some Reflections on His Majesty's Declaration for Liberty of Conscience," to warn the Nonconformists of the great mistake into which some were falling. "Was ever anything," he asked afterwards, "more absurd than this conduct of King James and his party, in wheedling the Dissenters; giving them liberty of conscience by his own arbitrary dispensing authority, and his expecting they should be content with their religious liberty at the price of the Constitution?" In the letter itself he pointed out that "the king's suspending of laws strikes at the root of this whole Government, and subverts it quite. The Lords and Commons have such a share in it, that no law can be either made, repealed, or, which is all one, suspended, but by their consent."
In January, 1688, Defoe having inherited the freedom of the City of London, took it up, and signed his name in the Chamberlain's book, on the 26th of that month, without the "de," "Daniel Foe." On the 5th of November, 1688, there was another landing, that of William of Orange, in Torbay, which threatened the government of James the Second. Defoe again rode out, met the army of William at Henley-on- Thames, and joined its second line as a volunteer. He was present when it was resolved, on the 13th of February, 1689, that the flight of James had been an abdication; and he was one of the mounted citizens who formed a guard of honour when William and Mary paid their first visit to Guildhall.
Defoe was at this time twenty-eight years old, married, and living in a house at Tooting, where he had also been active in foundation of a chapel. From hose factor he had become merchant adventurer in trade with Spain, and is said by one writer of his time to have been a "civet-cat merchant." Failing then in some venture in 1692, he became bankrupt, and had one vindictive creditor who, according to the law of those days, had power to shut him in prison, and destroy all power of recovering his loss and putting himself straight with the world. Until his other creditors had conquered that one enemy, and could give him freedom to earn money again and pay his debts-- when that time came he proved his sense of honesty to much larger than the letter of the law--Defoe left London for Bristol, and there kept out of the way of arrest. He was visible only on Sunday, and known, therefore, as "the Sunday Gentleman." His lodging was at the Red Lion Inn, in Castle Street. The house, no longer an inn, still stands, as numbers 80 and 81 in that street.