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Charles sought peace at home and abroad by putting together a military force. He massed 14,000 soldiers in Dover, intending to send them across the English Channel to press the war against Spanish allies in Europe. But he failed to provide adequately for his men, foisting unpaid and starving soldiers on the region. The soldiers grew restive, waiting for food, drink, and payment for their services. The resulting clamor produced civil disorder, with crimes ranging from stealing sheep to rioting to rape.
In response, Charles imposed martial law and applied it to soldiers and civilians alike. It was in the commission authorizing the imposition of martial law that Charles proposed "Terror" as a means of control. The commission empowered specified individuals "to be executed and putt to Death according to the Lawe Marshall for an Example of Terror to others, and to keepe the reste in due Awe and Obedience."
Although historians dispute the extent to which the king's officers employed martial law as a basis for executing civilians, "Terror" meant more or less the same thing here as it later did during the French Revolution: the rule of summary justice, meted out by military officials acting without juries, to produce "awe and obedience" in the target population. In both cases, the ruling party sought to intimidate a civilian population by threatening execution. The word "terror" described its work.
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English and French law embraced the idea that official actions could be taken for their in terrorem effect. Deterrence apparently was uppermost in the mind of Charles I in 1625: He thought an example of terror would raise the level of compliance with the law among civilians and soldiers, reducing the need for more widespread punishment. The deterrence rationale comes through clearly in the commission's explanation of its purpose:
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http://www.legalaffairs.org/issues/May-June-2004/termsofart_pfander_mayjun04.html