Max, as I recall what I have read about Geo III and his condtion, whatever it was, he was quite sane at the time of the American Revolution and for some time after. It was not until later, that he first had a spell and was found incompetent. He recovered from that, and I think it was not until after the turn of the century that he went permanently bonkers, necessitating the Regency. So TEd's point is very well taken (in fact, I was going to post something like it myself). At the crucial period, before 1776, Geo was quite sane. Part of his problem was his upbringing. I read somewhere that his mother was always telling him, "Georgie, be a man!" This was one reason why he was so intractable with the colonists. And he had a sense of his position in history and had no intention of presiding over the start of the dissolution of the Empire.
