History of using capital letters for names

The Capitalisation of Nouns (closest modern parallel, German) faded away between the Middle and End of the Eighteenth Century. The Reason was primarily Æsthetic, as Writers and Printers moved away from Heavy Typography towards a more Italianate Model. There were also Œconomic Advantages, since it generally made Typesetting easier.

The heaviest Stiles of Typography are usually associated with low-status or popular Publications -- the Equivalent of today's Tabloids, with their shouty sans-serif Headlines. That fits with your cited Text -- the anti-coffee Pamphlet mentioned in Harper's this Month, which is fairly Shouty even by Restoration Standards.

By Contrast, high-status Writers (and their Printers) tended to favour lighter Typographical Stiles, especially going into the Augustan Age. (Alexander Pope is a good Example One who 'lightened' the Typography of his Books over the Course of his Career, particularly in Editions meant for Persons of Quality)

The Change didn't occur at once, by some top-down Decree, but happened over a long period of Time, and according to Fashion. Regular Nouns go from Capitalised to lower-case; emphasised Nouns go from Italicised-capitalised to italicised or roman lower-case, depending on House Stile. Certain proper Nouns go from Sᴍᴀʟʟ Cᴀᴘꜱ to Capitalised.

David Foxon's Pope and the Early Eighteenth-Century Book Trade is the canonical Work on this Topic.

As to when the rule of capitals for nouns was inherited into English, that perhaps can never be known.

Since German capitalizes every noun there is speculation that this rule has been inherited from there, perhaps via Johannes Gutenberg and his famous printing press via the Gutenberg Bible (note that the Gutenberg press is not the first of its kind as the Chinese and Koreans already had this technology as early as 1000s). This could be where the Germanic rule of capitalizing nouns may have originated since the Gutenberg (and subsequent presses) were all German in origin and their language and grammar rules may have influenced the rules of printed words far and wide.

Capitalized nouns were a common occurrence and can be seen in many instances prior to the 1730s and seems to be a shift at this point. From this first issue of the Gentleman's Magazine published in 1731. Every noun has been capitalized. This heavy use of capitals seems to be common especially in the printed word. David Foxon wrote in his book entitled Libertine literature in England, 1660-1745 that "... the vogue for heavy caps may be associated with the eighteenth-century culture of sensibility." Also, "Heavy caps also seem to be associated with the more chatty, conversational style of prose that comes into fashion in the late seventeenth and early eighteenth centuries."

There is a steady drop of capitalizing every noun as can be seen by this volume of the Gentleman's Magazine printed in 1744. This starts to look familiar with printed and accepted usage by today's standard.

If a reader were to open an English book printed in the 17th century, one of the first things he'd notice would be the unconventional spellings, and how most nouns were capitalized. Just like the German today, it was customary during the late 17th century and the end of the 18th century to emphasize all the nouns (or nearly) with a capital letter, but there were no fixed rules governing this practice. It appears to have been a fashionable trend that became increasingly more idiosyncratic and terribly subjective.

Capitalization
In German (and Luxembourgish), all nouns are capitalized. This was also practiced in Danish before the spelling reform of 1948, and in English during the 18th century (as in Gulliver's Travels, and most of the original 1787 United States Constitution).

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First names, or more formally, personal names and proper names/nouns were indistinct from ordinary nouns; it was primarily the writer's choice which nouns to capitalize or italicized.

Eighteenth century grammars

In the early decades of the eighteenth century, we get some sense that printers found this abundant capitalization unnecessary. Thomas Dyche, in A guide to the English tongue, writes, "'Tis grown Customary in Printing to begin every Substantive with a Capital, but in my Opinion 'tis unnecessary, and hinders that remarkable Dinstinction intended by the Capitals". And Thomas Tuite agrees with his claim that "[substantive capitalization] hinders that expressive beauty... intended by a capital" . With opinions changing and printers altering type font on their on accord, it was only a matter of time before lower-case nouns appeared more frequently in literature and other forms of writing.

This change didn't happen overnight, but generally speaking common nouns went from being capitalized to being written in lower-case; important nouns went from italicized-capitalized to italicized, and then lower-case; and certain proper nouns went from small caps to capitalized.

An example below of how some common nouns were capitalized, e.g., Divorce; Queen; Preachers; some were italicized-capitalized e.g., England; Katherine (of) Castile; Dutch-Land. And some were left in lower-case e.g., wife; fingers; hatred. The excerpt is taken from The memoires of Sir James Melvil of Hal-hill by George Scot (1683)

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