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.
Money invested in the woollen industry made further profits, and more capital accumulated. This was available for trade in general, supporting ventures of a size and over a distance beyond the resources of the ship-owner. Rich clothiers like Spring of Lavenham, Byrom of Manchester and Winchcombe of Newbury could do much as they liked; they were independent of the Merchant Adventurers, lived well, married well, and thought themselves equal to the landed aristocracy. And the capital of the great wool-masters and landowners was also available for industry and mining. Bacon wrote of a certain nobleman who was ‘a great sheep-master, a great timber-man, a great collier, a great corn-master, a great lead-man, and so of iron’. The Willoughby family of Nottingham throughout the sixteenth century supplemented their income from land by the manufacture of iron and glass and the mining of coal. Towards the end of the century they were spending £20,000 a year on the iron mills at Codnor. Tin and lead were mined in Cornwall, lead in Somerset, coal in Durham; all these industries required large amounts of capital to keep them going. Tin from the Cornish mines was paid for only twice a year. In the meantime the miners wanted their wages and the tin masters needed money for the day to day costs of production. Capital was essential and the speculators like Bulmer, Maynard, Palavicino, Gresham himself, and Stoddard the former grocer’s apprentice, were pleased to supply it.
The capitalists, who now found themselves indispensable to the commercial well-being of the country, were irked by the regulation of trade and the restrictions on enterprise which were part of the economic legacy from the Middle Ages. They were against monopolies and privileges, whether those privileges were enjoyed by the English cloth exporters banded together in the Merchant Adventurers, or by the foreign merchants of the Hanse who controlled most of the trade to the North and had been resident at the Steelyard in London since at least 1350. They were against the exclusive rights of the gilds and of municipal organizations, and they resented the restrictions on apprentices which prevented the growth of business. They demanded the right to trade where, when and with whom they could. They felt that the only restriction on trade should be the limits of finance, and they were in business to extend that. So they set out to break down the medieval barriers to free trade; they infiltrated the gilds and captured their organization; they evaded municipal regulations by taking business outside the towns; they became Merchant Adventurers themselves; they harried the privileged foreign merchants and finally drove the Hansards from the Steelyard in 1578; and they pressed unceasingly for legislative changes.
As the old exclusive trading corporations died away, business ventures were now undertaken through a new device called the joint stock company. This kind of company, which grew out of certain medieval partnerships, became prominent in the second half of the sixteenth century. The Muscovy Company, founded in 1553, was an early and famous example which was followed by the Africa Company and the Levant Company; even the plundering expeditions of Elizabeth’s privateers were organized as joint stock ventures. The old regulated company such as the Merchant Adventurers was an exclusive club of fortunate merchants; entrance was difficult, admission fees were high, rules were strict. But the joint stock company was a much more democratic affair and, drawing its stock from all sections of the public, a much better source of capital. ‘Divers noblemen, gentlemen and persons of quality, no ways bred up to trade or merchandise’ purchased their shares and left the running of the company to the few powerful merchants who directed the trade. Undisturbed by the competition and jealousies of merchants within the company, and blessed with adequate capital from the shareholders, the joint stock companies were both efficient and profitable. Men who had before never thought of trade could now buy their shares, taking a profit without any knowledge of sails, tides and harbours, or bills, exchanges and dockets. The wider the rewards spread, the less was the criticism. By the accession of Elizabeth in 1558 the secret victory of capitalism was accomplished. Only the poor, the dispossessed, the moralists, and the government would not see it.
In the new economic age after the mid-century, with so many opportunities for speculation and trade, the capitalist merchant wove around him a complex web of business. Besides being the Royal Agent, Gresham was a Mercer and a Merchant Adventurer; he was the constructor and owner of a paper mill and engaged in the production of iron. As part of his financial dealings he loaned money to the aristocracy. He advanced £4,000 to Viscount Bindon, held a mortgage on the manors of Lord Thomas Howard and of Sir Henry Woodhouse who was foolish enough to take an action against Gresham for usury. In this expansive and inflationary time the aristocracy were committed to luxury and show. ‘We that be courtiers’, says an Elizabethan play, ‘have more places to send gold to than the devil had spirits.’ But the revenue from ancestral lands was no longer sufficient for such conspicuous expense, and the aristocrat was an eager client of Gresham and his kind. The aristocrats were not the only large spenders. Throughout society affluence was at work, and the financier was the gainer. In the house of the merchant or gentleman, William Harrison wrote in the Description of England he compiled early in Elizabeth’s reign, one could see ‘great provision of tapestry, Turkey work, pewter, brass, fine linen, and thereto costly cupboards of plate, worth five or six hundred or a thousand pounds’. Within his lifetime, Harrison wrote, he had seen chimneys added to the meanest houses; flock beds taking the place of straw pallets; pillows used instead of logs or sacks of chaff; and wooden platters and spoons giving way to pewter vessels and tin or silver spoons. And few citizens lived as well as the financier. The description of luxury in Shakespeare’s Taming of the Shrew would have been a fitting tribute to Gresham House in Bishopsgate, the home of the wealthiest commoner in England:
My house within the city
Is richly furnished with plate and gold:
Basins and ewers to lave her dainty hands;
My hangings all of Tyrian tapestry;
In ivory coffers I have stuff’d my crowns;
In cypress chests my arras counterpoints,
Costly apparel, tents, and canopies,
Fine linen, Turkey cushions boss’d with p
earl,
Valance of Venice gold in needle-work,
Pewter and brass, and all things that belong
To house or housekeeping.
The riches piled up. Gresham had his house in London; he also had houses at Osterley in Middlesex, Mayfield in Sussex, and at Westacre, Kingshall and Intwood Hall in Suffolk. The furniture at Mayfield alone was valued at £7,500. When he died he was able to leave his widow an income of over £2,000 a year. Was Gresham content in the midst of his magnificence? After the final return from Antwerp he was a lonely man perhaps. His money made more money without him looking at it; though still not old, he retired from business entirely in 1574. Also, whatever his wealth, he was still a commoner and subject to the peremptory whims of the Queen. In 1569 Lady Mary Grey, the youngest sister of Lady Jane, who had unwisely married a ‘sergeant-porter’ of the Queen’s household, was sent to lodge with Gresham. Why Sir Thomas should have been made her gaoler is not known, but for more than three years her unhappy presence poisoned the life of his home. He drank Rhenish, cursed his gout and was dissatisfied. Was it conscience or philanthropy that caused him to endow Gresham College in his will?
‘Was it not for prodigality’, wrote Bernard Mandeville, the unconventional mocker of the next century, ‘nothing could make us amends for the rapine and extortion of avarice in power.’ In 1575 Gresham made his will. He left his house in Bishopsgate to his wife for her lifetime, and then it was to become Gresham College. Seven professors were to teach seven subjects. The lectures were to be free and the professors paid £50 a year (a generous salary for the time) from the rents of the shops in the Royal Exchange. The government of the College was vested in the Corporation of London and in the Mercers’ Company. When Lady Gresham died in 1596 the College began; for a hundred years and more it was London’s university, attracting some of the greatest scholars in the land. Then the income that supported it fell off, the building was in disrepair, and covetous eyes wanted the valuable city site. The professors were turned out of their pleasant lodgings, their wages left unpaid, and the building razed. Occasional lectures in a gloomy room at the Royal Exchange were all that were left of Gresham’s grand design of a university. It was founded on commerce and commercial values killed it. On 21st November 1579 Sir Thomas himself died. ‘Coming from the Exchange to his house’, wrote the chronicler, ‘he fell down in his kitchen; and being taken up, was found speechless, and presently dead.’
Tudor Lives: Success & Failure of an Age Page 12