Tudor Lives: Success & Failure of an Age (15 page)

When Mary came to the throne Gresham was in some trouble. His patrons under Edward did not have the favour of the new government; Gresham was at first dismissed and the former Agent, Dansell, reinstated. Gresham counter-attacked promptly. He pointed out the incapacity of Dansell who ‘brought the King in debt and took wares and jewels up, to the King’s great loss’, asserted his own good services to Edward, and pleaded his own deserving case. ‘And now’, he wrote to the Council, ‘God help poor Gresham.’ His pleas, backed by certain influential men and supported by Dansell’s unfailing ability to bungle, brought Gresham triumphantly once again to Antwerp, where he continued the royal business as before. He undertook exacting and varied duties with his usual enterprise and cunning. He went on troublesome journeys across Europe in search of capital; he ran discreet errands for important men, and made for them advantageous purchases of silks and jewels and little luxuries; he arranged for the smuggling of currency into England (all countries had stringent regulations against the export of gold and silver) in diplomatic bags, in sacks of pepper and in suits of armour, all of which he advised the Queen to keep secret, ‘for if it should be known or perceived in Flanders it were as much as my life and goods were worth’. He kept judiciously silent about the religious and political troubles of Mary’s reign, and on the death of the Queen, being in England at the time, he was one of the first to hurry to Elizabeth at Hatfield. He reminded her how much he had done in the two previous reigns, and was well received. Elizabeth would, Gresham proudly reported, ‘not only keep one ear shut to hear me, but also, if I did her none other service than I had done to King Edward, her late brother, and Queen Mary, her late sister, she would give me as much land as ever both they did’.

And Elizabeth certainly had need of the very best advice, as the unhappy reign of Mary, despite her reasonably sound administration, had left the royal finances in poor condition. The royal debt was £226,910 of which over £100,000 was owed to foreign financiers. The country was in a restless, impoverished state and
immediate funds were required for making fortifications, building ships, buying gunpowder and stores. The Queen instituted exceptional economies and Parliament voted heavy new taxes, but these measures could only meet part of the expenses for defence and Elizabeth was forced, as her predecessors had been, to look to Gresham to raise loans from abroad. Gresham set about the problem in his usual way. He put forward once again his old plans. He advocated raising the value of sterling, the reduction of the foreign debt by paying off loans as they became due rather than renewing them. He wanted the Queen to limit the special privileges of the Hanse merchants in London, and thereby put a profitable trade in the way of Englishmen. He was especially keen once more to raise a forced loan from the Merchant Adventurers, and by playing upon the exchanges to make the Adventurers’ loss become the royal profit. ‘The exchange’, he said with a rapt admiration for his own dexterity, ‘is the chiefest and richest thing only above all others. This thing is only kept up by art and God’s providence.’ And last of all he called for the reform of the English currency which had been in a bad state ever since Henry VIII started to debase it.

The reform of the coinage was the first step taken by Burghley and the Council to overcome the prodigious inflation which had so weakened the economic strength of England in the middle years of the century. Gresham had recommended the recoinage, and when the event took place in 1560 it was he who engaged and sent over the chief refiner, Daniel Wolstat of Antwerp, who charged for his labours 5 per cent on the amount of new currency put into circulation. The change went very well. When the old coins had been melted down and the new coins struck the Queen found that she had made a small profit. This was valuable, but much more valuable was the effect of the recoinage on trade. The exchange rates fluctuated less wildly; foreign merchants accepted English currency with renewed confidence; and domestic prices, though they did not fall as the government had hoped, at least rose less steeply.

The reform of the coinage in 1560 was the beginning of a better age for England’s economy. The improvement was partly due to the character of the new government. The Queen was notoriously thrifty and managed to execute many of her policies, in particular the Irish campaigns, on the money of her subjects. Burghley, though not the most enthusiastic of mercantilists, at least saw the
necessity to reform the conditions of labour in England and to encourage foreign trade. The Statute of Apprentices in 1563 very comprehensively tried to increase the supply of agricultural labour, arrest the decay of ‘corporate towns’, and improve declining standards of workmanship. Also, in an attempt to defeat inflation, it made the assessment of wages proportionate to prices. Relief of the poor was provided by a number of measures which culminated in the Act of 1572. Having reorganized English labour, Burghley then tried to lessen the country’s dependence on foreign finance. Money was needed first of all for
nervi bellorum
—the sinews of war—and it was well recognized that a poor country was a weak one. Gunpowder and ordnance, Gresham wrote to Burghley, were ‘better than any treasure’. But the gunpowder and the minerals for the ordnance were mainly purchased from abroad; Gresham indeed had the double function of raising the money to buy the gunpowder in his role as a financier, and of making the actual purchases in his capacity as merchant. Burghley decided to provide for these expensive commodities at home. In 1561 a company was formed to work the mines in Northumberland and to search for copper in Cumberland. German miners trained in the enterprises of the Fuggers were brought over and Gresham gave the Fuggers a bond for their expenses. In 1568 the Company of Royal Mines was incorporated, with Burghley as the Governor, providing iron and copper for ordnance. Patents were issued for the production of sulphur and saltpetre for gunpowder; further mining operations were encouraged in Somerset and Cornwall, looking for calamine, tin, iron and lead.

Thrift, legislation and planning eased the burden of England’s debts. Further relief was given by the rapid growth of wealth in the late sixteenth century, a wealth which allowed capital to accumulate at home rather than be expensively bought in the European money markets. ‘The realm’, it was said in 1579, ‘aboundeth in riches, as may be seen by the general excess of the people in purchasing, in buildings, in meat, drink and feasting, and most notably in apparel.’ Five years later Sir John Hawkins, treasurer of the navy, thought the native wealth had increased threefold since the accession of Elizabeth. The new wealth came largely from trade, not only from the traditional European trade now greatly extended by such enterprises as those undertaken by the Muscovy Company, formed after the exploratory voyages of Willoughby and
Chancellor in 1553 and 1556, but also from the new trade opened up by the discoveries of the navigators, the wide-flung trade that embraced both the East and the West Indies. And to add to these riches there was the plundered treasure which Elizabeth’s privateers brought back to England with her secret encouragement. The bullion which Sir Francis Drake stole on his circumnavigation provided a large part of the capital for the founding of the Levant Company. ‘Who doth not understand’, wrote the editor of the
Discourse of the Common Weal
in 1581, ‘of the infinite sums of gold and silver which are gathered from the Indies and other countries, and so yearly transported unto these coasts?’ In 1621 a Member of Parliament calculated that £12 million of plunder came to England in Elizabeth’s reign; it was, he said, ‘the spring that furnished the kingdom’. The country, because it was prospering, looked formidable to enemies, and the Queen’s credit was high. ‘The Duke of Alva’, Gresham wrote to Burghley about the powerful Spanish governor in the Netherlands, ‘is more troubled with the Queen’s Majesty’s credit and with the vent of her highness’ commodities at Hamburg, than he is with anything else, and quakes for fear.’

The new prosperity of England made the work of the Royal Agent less difficult and also less vital. Elizabeth continued to borrow—at her death her debt was said to be £400,000—but England’s credit was good and the delicate, sly art of Gresham no longer needed. He had seen three sovereigns through rough waters and his advice had helped to guide them to safety. He had the rewards of his service; trade and speculation, using his advantageous position, made him immensely rich, and Elizabeth knighted him in 1559. His hard tasks in Europe had wearied him. For many years he had been much more than a mere financial agent. He was a roving envoy sent on many a diplomatic mission. He was also the master of an intelligence service, suborning the servants of Spain, bribing and corrupting officials in Antwerp, receiving bribes in return, and all the while sending back to Burghley a precise account of the Spanish strength and intention in the Netherlands; details of private conversations with the Duchess of Parma, William of Orange, and the Duke of Alva; and descriptions of religious troubles, with comments on their possible effect on politics and business. A fall from a horse in 1560, on one of his incessant journeys, left him lame. His family life was
disrupted by travel, business, worry. His wife was mostly in England and he was mostly abroad. His son Richard died in 1564 and he was left with an illegitimate daughter only. In 1568, after more than fifteen years in Antwerp, Sir Thomas left that city, now declining in commercial importance, and came home to his many business ventures in England.

In 1537 Gresham’s father, Sir Richard, had proposed the building of an Exchange in London. No doubt Sir Thomas remembered his father’s plan. Thoughts of an Exchange in his native city came to him again in 1564, after the death of his son left him with great riches and no heir. The decline of Antwerp, harried by the political and religious troubles in the Netherlands, increased the chances for success in London, and Gresham set out to persuade the aldermen.

That London had existed for so long without an Exchange showed the conservative spirit of the English merchants whose economic thought lagged some way behind continental developments. The great banking houses of Italy and South Germany did not find it necessary to keep agents in London, and the English government, as Gresham knew only too well, was forced to raise loans abroad. Such financial business as there was in London still went largely to the resident Italians, men like Palavicino, Spinola and Vellutelli, men so omnipresent and dexterous that they raised suspicions in Burghley’s cautious mind. In 1553, in an effort to control the exchanges, he wanted to limit the powers of these Italians; they ‘go to and fro and serve all princes at once,’ he complained, ‘work what they list and lick the fat from our beards’. Nonetheless, Elizabeth made use of them, as her predecessors had done, and knighted Palavicino for services to finance and diplomacy. And English merchants, coming haltingly after where the Italians had led, soon saw the value of a money market. Successful merchants, accumulating capital from foreign trade and learning something of markets, found that the financing of foreign ventures was more profitable and less of a risk than trade itself. Such a merchant was able ‘to get a part and sometimes all his gains that employeth money taken up by exchange on wares, and so make others travel for his gains’. The persevering merchant was transforming himself into the radiant capitalist financier (though confusingly he kept the name of ‘merchant’), and such men appreciated the value of an Exchange in London with the organization and international connections to aid their financial dealings. The
government, too, looked favourably on an Exchange, for then it could raise loans within the realm.

Formerly, the London merchants had met in St Paul’s, or walking in Lombard Street where they were constrained, wrote Stow, ‘either to endure all extremities of weather, viz.: heat and cold, snow and rain, or else to shelter themselves in shops’. Gresham’s plan was accepted and money was raised by subscription for the purchase of a site. In 1566 some houses were cleared off Cornhill and the ground prepared; then possession (as Stow related) was ‘given to Sir Thomas Gresham, Knight, Agent of the Queen’s Highness, thereupon to build a Bourse, or place for merchants to assemble in, at his own proper charges’. The design of the building was modelled on Antwerp’s Exchange, having a piazza in the middle surrounded by cloisters. It was a handsome building, and hopefully a profitable one for Gresham; for besides the exchange rooms, there were more than a hundred shops round the exterior on two floors, and from the rent of these Gresham hoped to recoup the cost of building. Into these shops came milliners and haberdashers, sellers of mousetraps, bird-cages, shoe-horns, lanterns and jew’s harps. In short time the Exchange also became the meeting place of idlers and rogues. A complaint of 1574 mentioned noise, rowdy behaviour, molestation of honest citizens and interruption of church services. But these annoyances were a small price to pay for the joys of enhanced profits. In December 1568 the Exchange was open for business. Just over two years later the Queen stamped the Exchange with her royal approval. Capitalism had at last come of age in England.

The money-lender, the financier, the provider of capital was in practice no stranger in the Middle Ages. But in the ideal Christian theory he was a pest and a thief from the community. In an agricultural land, such as England was, an economy may be more or less self-sufficient. But when men move into cities, as they did in Italy, turning from farmers into merchants and drawing the wealth of the society not from the land but from the great trade routes to the Orient, then the large volume of trade must be carried either on credit or on other people’s capital. As the wealth of a nation rises and trade expands, the capitalist comes into his own. The rise of England’s fortunes came first from the success of the wool growers; from being merely an exporter of wool England became an exporter of manufactured cloth which was sought all
over Europe to the great profit of the wool masters. They in their turn grew rich, had capital to share and wanted to use it. In the fifteenth century families enriched by wool, such as the Celys, made their capital available for all the various processes of the cloth industry—the purchase of sheep, the providing of pasturage, the shearing and weaving. They also bought and enclosed the land to the despair of Kett and his poor countrymen.