Tudor Lives: Success & Failure of an Age (14 page)

1
   i.e., give her a dose of poison.

2
   Reginald Pole, son of Mary’s old governess the Countess of Salisbury, was of royal descent, and had himself been put forward as a possible husband for Mary: though he was a cardinal, he was not yet a priest. But Pole was fifty-four, an ascetic churchman and not the marrying kind. His own advice to Mary was to remain single.

5

Sir Thomas Gresham

W
HEN THE BUILDING
was finished in November 1567, the scaffolding down and the workmen’s debris cleared away, the onlookers saw four grasshoppers carved above the corners of the walls, and a fifth, very large upon a puny spire, high in the dull winter sky crouching gigantically over the city. These were the emblems of Sir Thomas Gresham, the brave emblems of capitalism, dominating his new Exchange. On 23rd January 1571 the Queen came in state to the city and dined with Sir Thomas in Bishopsgate. Then they inspected the building and Elizabeth ‘caused the same Bourse by an herald and a trumpet to be proclaimed the
Royal Exchange
’, setting the final royal approval on a lifetime given to speculation. The great financier, surfeited with property and weary with the accumulation of wealth, his only son dead and his legs lame and gouty, limped amid the extraordinary treasures of his five houses until an apoplectic fit took him off at the age of sixty.

Thomas Gresham was born in London in 1519, the second son of Sir Richard Gresham and the inheritor of a strong merchant tradition. The Greshams came from Holt in Norfolk and had prospered from the wool trade of their native county helped by advantageous marriages. In the generation before Thomas’s birth, the family had come to London in search of wider opportunities and had done very well. Sir Richard and his brothers all began in trade. One, frightened by an apparition at Stromboli, forsook commerce and became a priest; the others, with less tender consciences, were members of the Mercers’ Company, and all successful. In their trading ventures they saw Russia, the Baltic, France, the eastern Mediterranean; they were well known in Antwerp, the great clearing house for north European trade. The honours that go with successful business came to them. Richard was a financial agent for the government, and both he and his younger brother John were knighted. Both became Lord Mayor of London, Richard in 1537 and John ten years later. They were worthy citizens, substantial,
deferential to authority, useful and acquisitive. Sir Richard, adviser to the King’s minister Thomas Cromwell, at the dissolution of the monasteries petitioned for, and received, extensive lands in Norfolk.

Thomas Gresham was inevitably destined for trade. He was sent to Gonville Hall, Cambridge, though it was not usual for the sons of merchants to go to university. But the son of a Lord Mayor deserved the extra polish of a classical education, and the Latin and the languages perfected at Cambridge would do a young merchant credit in foreign lands. The real education, the commercial training which was the foundation of his success, he got within his family. After university he was apprenticed for eight years to his uncle Sir John. ‘My father’, Thomas wrote, ‘being a wise man, knew, although I was free by his copy, it was to no purpose, except I was bound prentice to the same; whereby to come by the experience and knowledge of all kinds of merchandise.’ In 1543 he was admitted to the Mercers’ Company and began to take a part in family ventures. In 1544, with a rather indecent haste he married Anne Read, the widow of one of his colleagues. He prospered and began to make an independent reputation. At the end of 1551 he became the Royal Agent on the continent at the early age of thirty-two.

Among the greatest of the benefits which Henry VII conferred on England was the re-establishment of her commercial well-being. With good reason, John Wheeler, the Elizabethan writer on trade, praised him as the ‘peaceful, politic and rich prince’. In former times England’s power in Europe had been enforced by arms. Henry VII turned away from military glory and worked instead for the indirect power of trade. While he encouraged the nationalism of the people he secretly soothed the fears of his continental rivals, so that it has been said of him that ‘his subjects paid him to levy war and his enemies bribed him to refrain’. The constant care of his reign was to foster trade and to find outlets for English commodities, especially English wool and cloth. To this end he concluded commercial treaties with Spain, with France, with the Empire, with Friesland and the Netherlands. In the North he was anxious to avoid a contest with the powerful Hanseatic League, but he tried to break the monopoly of the Hansards by entering into compacts with Denmark and Riga. In the South, in the rich Mediterranean, Henry faced the jealous competition of Venice.
A war of tariffs ensued, which England eventually won; by the beginning of the sixteenth century ‘divers tall ships of London’, Hakluyt wrote, ‘with certain other ships of Southampton and Bristol had an ordinary and usual trade to Sicily, Candia, Chios and somewhile to Cyprus’, taking out cloth and returning with silks, wines, oils, rhubarb and spices.

But the best stroke of his commercial policy was the understanding with Antwerp and the Netherlands. The chief market for English cloth was in the Netherlands, and Antwerp was the trading centre of northern Europe. Political difficulties had interfered with the Netherlands trade and for some years the Merchant Adventurers had removed the mart for English cloth from Antwerp to Calais. In 1496 the
Magnus Intercursus
restored the good relations between countries and the English merchants returned to ‘their mansion in Antwerp’, Bacon wrote, ‘where they were received with procession and great joy’. The vast importance of Antwerp to the English wool and cloth trade was pointed out by an acid Flemish proverb: ‘If Englishmen’s fathers were hanged at the gates of Antwerp, their children, to enter the town, would creep between their legs.’ For the export of wool through the Wool Staplers, and of manufactured cloth through the Merchant Adventurers, most of which trade went by way of Antwerp, was the source of England’s riches. And most of the wealthiest merchants in the Tudor age were connected in some way with textiles. Thomas Gresham, his father and his uncles were all members of the Mercers’ Company; of the ninety-seven Lord Mayors between 1509 and 1603, seventy-two had made their money from cloth. Exports of cloth rose rapidly; by the middle of Elizabeth’s reign Camden put the value of exported cloth at £1,500,000, an increase of more than £500,000 from the start of the reign.

The parsimony and good management of Henry VII left his son a full exchequer which that desperate and extravagant young prince immediately began to squander. Although English trade was still expanding and the King also had to hand the profits from the dissolution of the monasteries, in the last years of his reign Henry sank into debt. The ill-advised expedient of debasing the coinage did nothing to help; money had to be borrowed from abroad to such an extent that the charges for interest and redemption came to £40,000 a year. As a result of lamentable policies, in particular the debasement of the coinage, there was a general and
catastrophic rise in prices. ‘I think’, John Hales, the wisest of economic commentators, wrote in his
Discouse of the Common Weal
in 1549, ‘this alteration of coin to be the first original cause that strangers first sell their wares dearer to us: and that makes all farmers and tenants, that reareth any commodity, again to sell the same dearer: the dearth thereof makes the gentlemen to raise their rents and to take farms into their hands for the better provision, and consequently to enclose more ground.’ The fluctuations in the exchange rate caused by the poor coinage upset foreign trade and weakened England’s international credit, as Gresham later pointed out to Elizabeth. ‘It may please your Majesty to understand’, he wrote in 1558, ‘that the first occasion of the fall of the exchange did grow by the King’s Majesty, your late father, in abasing his coin from 6 oz. fine to 3 oz. fine. Whereupon the exchange fell from 26s. 8d. to 13s. 4d. which was the occasion that all your fine gold was conveyed out of this your realm.’ The mismanagement of Henry VIII seemed likely to ruin the prosperity that his father had worked so hard to secure. Prices were high and rising, trade was hindered, unrest was stirring and the king’s debts were becoming alarming. The state of the royal finances was an embarrassment to Edward and a puzzle to his ministers; having nothing to suggest, the Council fell with displeasure on Sir William Dansell, the Royal Agent, accusing him of ‘marvellous ill service’ and dismissing him ‘by reason of his slackness’.

‘I was sent for unto the Council’, Gresham recalled, ‘and brought by them afore the King’s Majesty to know my opinion (as they had many other merchants) what way with least charges his Majesty might grow out of debt. And after my device was declared, the King’s Highness and the Council required me to take the room in hand, without any suit or labour for the same.’ The government was looking for unusual remedies, and no doubt Gresham’s was the boldest plan put forward. Perhaps the King, old-fashioned economic moralist that he was, did not understand Gresham’s proposals, his juggling with exchange rates and other capitalist sleight-of-hand; but in the desperate circumstances young Gresham’s ideas were spirited and different enough to be given a chance.

And going to Antwerp to try his hand in the international money market, Gresham needed a boldness and an expert knowledge that was hardly to be found in England at this date. Rising out of the stiff, suspicious economy of the late Middle Ages, a world
of tariffs, protective legislation, trade restrictions and monopolies, Antwerp waved the banner of free trade and demonstrated to the North the workings of capitalism. The exchange at Antwerp was dedicated
‘ad usum mercatorum cujusque gentis ac linguae’
—‘to the use of merchants of whatever race and tongue’—and round the exchange were concentrated the men who controlled the money market: the royal agents, the representatives of the great banking houses of South Germany, France, Spain and Italy, the most important of whom were the famous Fuggers of Augsburg, and the rich merchants of all nationalities who found the lending and borrowing of money more profitable than trade. Into the port of Antwerp on the Scheldt came the shipping of the West; in a good season two thousand boats could be seen in the river at a time. Capital from trading ventures flowed into the Bourse, from the mines of Germany and Hungary, from the profits of the English trade—wool brought by the Staplers, and cloth brought by the Merchant Adventurers, the imports of which amounted to some £1,200,00 a year. And from this capital large sums were taken to finance the insatiable demands of governments contemplating, fighting, or recovering from war, or the requirements of merchants expanding their trade across the world, from the East Indies to the West Indies. In Antwerp, in Lyon, Seville, Venice and certain other cities, the techniques of international finance were well developed; bills were discounted, drafts on other cities drawn up, and merchants’ papers of all nationalities exchanged. ‘No one can deny’, the citizens of Antwerp boasted, ‘that the cause of the prosperity of this city is the freedom granted to those who trade here.’ For fifteen years after 1552 Thomas Gresham was as much at home in Antwerp as he was in London.

The mysteries of the money market were hidden to most Englishmen. Plain men protested against the dubious morality of this traffic, but the government, oppressed by debts, were anxious to have the benefit of the market; Gresham was the English initiate of the subtle arts of finance, taking a place among the ‘great bankers or money merchants that use the exchange only for gain by merchandising of money, who lie watching to take advantage of the time and occasion to fall or raise the exchanges to their most profit’. His simple instructions were to use his art for England’s benefit. The speculative dealings of Gresham went against the economic morality of the time, and Gresham was as unscrupulous
as most financiers, but the government was pleased to allow the Royal Agent a looser conscience while English citizens at home were sternly held by legislation against the practices of capitalism.

It is not known what ‘device’ Gresham had revealed to the King and Council at his first interview, but a letter to Northumberland on 21st August 1552 showed that he soon had plans to meet the King’s pressing debts. First, he suggested that £1,300 should be set aside each week and sent secretly to Antwerp for Gresham to use in paying off the debts. These funds would be used for dealings on the exchange, quietly buying small amounts of sterling each day so that the value of sterling would rise in the market. Next he suggested that the Merchant Adventurers should be compelled to pay the royal debts in Flanders, the money to be repaid to them in London, whereby the government, benefiting from the difference in exchange rates, would save £4,500 on a debt of £30,000, all at the expense of the merchants. Finally Gresham suggested that the royal prerogative should be used to create a monopoly in lead; the King would then export lead to the continent at greatly increased prices.

These proposals were typical of Gresham’s approach to business, his devotion to certain ends, and not fastidious how he gained them. The first part of the proposal, the setting aside of funds, was sound practice which had to be abandoned as too expensive. The second part, ‘pegging’ of the exchanges in Antwerp, was the new capitalism at work. The third part, the mulcting of the Merchant Adventurers, was considered by Gresham to be one of his most brilliant innovations, the deceit being justified by the profit. And the fourth part, the creation of a lead monopoly, was an example of expediency, showing Gresham the merchant forgetting his principles for the sake of Gresham the royal financier. As a successful merchant, he was a great advocate of free trade, yet in the interests of his royal master he was prepared to accept an old-fashioned and objectionable monopoly.

Gresham’s operations at Antwerp worked no wonders. Some of his advice was not taken, and other schemes, though profitable, could not satisfy the royal money-hunger. Twice in the next ten years forced loans were raised from the Wool Staplers and the Merchant Adventurers, but the royal debt still crept up. But he had slowed the rate of increase and he had re-established the royal credit. He was able to borrow for Edward at 14 per cent whereas
the Emperor Charles V had to pay 16 per cent; and he managed to raise the exchange at Antwerp from 16 Flemish shillings to the pound sterling up to 22 Flemish shillings. The King was well pleased and just before he died presented Gresham with property worth £100 a year.