Finance and Trade Under Edward III the London Lay Subsidy of 1332. Originally published by Manchester University Press, Manchester, 1918.
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The reign of Edward the Third is one of the longest in history, and long reigns tend to possess an interest which is even more than proportionate to their length It is, however, an interest that springs not so much from unity as from contrast and change, the beginning and the end of such a reign lie in different worlds The three visitations of pestilence in 1349, 1361 and 1366 make this especially true of the reign of Edward III, few of those who were born before its stormy opening can have lived to see its disastrous close, and the contrast between the England of 1377 and that of 1327, whether in regard to its external relations, its constitutional development or its social and economic conditions, must have been scarcely less striking than the more familiar contrast between the beginning and the end of the Victorian era
In approaching the detailed study of such a period we need the help of all the large landmarks that are available, and it so happens that the fifty years of the reign divide themselves naturally into five epochs-each of which is almost exactly a decade The commencement of the Hundred Years' War marks the close of the first decade The second decade ends with the victory of Crécy and the Truce of Calais The middle period, which is rather longer than a decade, opens with the Black Death in 1349, and after a renewal of the war in 1355, and the victory of Poitiers in 1356, closes with the siege of Paris, the dictation of terms and the imposition of an indemnity in the form of a ransom by the treaties of Bretigni and Calais in 1360 The fourth decade is one of nominal peace with France, and the fifth, which opens with the second renewal of the war in 1369 is one of continuous military disaster and of increasing economic exhaustion
With this broad outline of the military history of the reign in mind we are better able to map out its constitutional history and to link together those aspects of its economic history -mainly fiscal aspects-which are studied in this volume Every campaign was preceded or accompanied by recourse to unconstitutional forms of supply, and every truce was followed by a Parliamentary crisis-the truce of Esplechin by the crisis of 1340-1, the truce of Calais by the crisis of 1348, the treaties of Bretigni and Calais by the decisive constitutional victory of 1362, and the truce of Bruges by the Good Parliament of 1376 A less obvious and equally significant fact is that each of these constitutional crises is followed by a reshaping of what becomes in the course of this reign one of the central fiscal organs of the government- the Staple As far as the present volume of studies is concerned, the three principal epochs of the reign are marked by the definite constitution of the Foreign Staple at Bruges in 1343, the establishment of the Home Staples by the ordinance of 1353, and the setting up of the Calais Staple in 1363
The seventeenth century, like the fourteenth, witnessed a transformation of the system of national finance The two main features of change were in both cases a great and permanent extension of indirect taxation and the creation of a new form of national debt In the seventeenth century, as in the fourteenth, both these innovations were initiated by the Crown, and were strenuously resisted by Parliament, which as the price of its final authorisation of them claimed and secured an increased measure of control over national finance The reader who is sufficiently forewarned of the limited value of historic analogies will find it helpful to compare the wool subsidy of the fourteenth century with the excise of the seventeenth, and to think of the Governor and Company of Staplers at Calais as the forerunners of the Governor and Company of the Bank of England
The most serious attempt hitherto made to deal comprehensively with the commercial policy of England in the reign of Edward III is undoubtedly that of Dr Cunningham In view of this fact, and of the great authority accorded to Dr Cunningham's conclusions, it is desirable to have those conclusions clearly before us and to use them as a basis from which any further discussion of the subject may set out The most fundamental position, as stated in the third edition of Dr Cunningham's "Growth of English Industry and Commerce," is admittedly a hypothetical one It is that "the wars of Edward III were not dictated by personal ambition but that his policy was thoroughly English, and that he aimed at the development of the national resources and increase of the national power"
"The main object of Edward's continental wars was to establish national industry and commerce upon a wider territorial basis To have established a firm hold upon Gascony, Flanders and England would have been to create a remarkably powerful commercial federation it was a thoroughy statesmanlike plan and would justify the reputation Edward III enjoyed as the Father of English Commerce." "This must, of course," says Dr Cunningham, "be mere hypothesis, as we cannot hope at this distance of time to become thoroughly acquainted with the precise motives which influenced the King, but it is an hypothesis as to his political intentions which has much in its favour since it renders his attitude towards industry and commerce intelligible" (fn. 1) But if we cannot now discover the King's political motives, what clues have we to his attitude towards industry and commerce? Dr Cunningham finds these in the Parliamentary enactments of the reign "The Dialogus assumes that prosperity is a good thing, but Edward III's legislation implies definite schemes as to the best way of promoting that end He endeavoured (a) to foster foreign commerce, (b) to foster industry, and (c) to check extravagance by sumptuary legislation He desired to increase the volume of trade, and he legislated in the interest of the consumer and in disregard of the claims of particular classes He endeavoured to develop a manufacture for which the country was specially suited, and to do so he showed himself somewhat cosmopolitan in inviting artisans from the Continent He set himself to encourage thrift among the labouring population-more it is true by precept than by example The necessity of procuring large supplies forced him at times to make severe demands from the commercial classes, and to levy heavy taxes either in money or in kind, but he did not consciously and habitually subordinate economic to political interest, in fact it would be more true to say that, as in modern times, his policy was very greatly determined by a desire to promote economic interests" (fn. 2)
In a later passage which has had considerable influence on the subsequent writing of economic history, Dr Cunningham in describing the development of mercantilist aims in the parliaments of Richard II, sets those aims in sharp contrast to the policy which he had previously attributed to Edward III "Edward had legislated in the interests of the consumers and with the view of providing plenty, the parliaments of Richard II took another turn and insisted on introducing conditions which, eventually, as they were worked out in subsequent centuries favoured the growth of English power To some extent plenty is a condition of power, and the two policies may have much in common but whereas Edward III desired to see large cargoes, whoever brought them, i e plenty, the Ricardian Parliament desired to have more English ships, even if the home consumers were for a time badly supplied with wine" (fn. 3)
It is very instructive to note the modifications of these views which further investigation and study have led Dr Cunningham to adopt in the more recent editions of his work He has come to take a less favourable view of the statesmanship of Edward, and is inclined to regard the hypothetical scheme of a great commercial federation as "highly ingenious" rather than as "thoroughly statesmanlike" He now considers that while "Edward may possibly have recognised the cohesive power of commercial intercourse, his plans were not farseeing, and they broke down because he failed to bring conflicting interests into harmony" "The privileges he conferred on Flemish merchants roused the jealousy of English subjects while the arrangements which were favourable to sheep farmers and to consumers in this country proved to be injurious to English shipping" (fn. 4) Not only therefore was Edward's commercial and industrial policy inconsistent with his supposed scheme for commercial federation but the several parts of that policy did not form a consistent whole
This view is much more in accordance than the earlier one with the estimate formed of Edward III by the other historians Professor Tout, who is perhaps the most appreciative of the strong points in Edward's character, considers that "he lacked the self-restraint and sense of proportion which would have prevented him from aiming at objects beyond his reach The same want of relation between end and means, the same want of definite policy and clear ideals, marred his statecraft" (fn. 5) The judgment of Stubbs is more decisively unfavourable "Edward III was not a statesman, although he possessed some qualifications which might have made him a successful one He was a warrior, ambitious, unscrupulous, selfish, extravagant, and ostentatious His obligations as a King sat very lightly on him He felt himself bound by no special duty either to maintain the theory of royal supremacy or to follow a policy which would benefit his people Like Richard I, he valued England primarily as a source of supplies A King whose people fly from his approach, a King overwhelmed with debt, worn out with luxury, the puppet of opposing factions such as Edward in his later years became, is a very different thing from the gentle, gay, and splendid ideal King of chivalry" (fn. 6)
The reader of the studies contained in this volume is likely to admit the wisdom of Dr Cunningham's later reservations as to the statesmanship of Edward III, and may even be disposed to go much further in the same direction Dr Cunningham still holds that the hypothetical federation was a highly ingenious plan and would justify the reputation Edward III enjoyed as the Father of English Commerce. But, after all, nothing but the clearest facts could warrant us in imputing to Edward, whether as depicted by Froissart or by Stubbs, an economic policy of such scope and elaboration that it anticipated the views of Cobden on the one hand and those of Frederick List on the other, and the facts seem to indicate that the first of the aims attributed to Edward- his desire to "foster foreign commerce shown by legislation in the interests of the consumer and in disregard of the claims of particular classes"-his policy of plenty rather than power is as hypothetical as his scheme of commercial federation It rests on the assumption that Acts of Parliament are a sure indication of royal policy-an assumption no more justifiable in the reign of Edward III than in that of James I The "free trade" enactments of Edward III's reign were carried in response to urgent petitions of the Commons In the two leading instances of 1335 and 1351-3 they imply the reversal of a restrictive policy previously adopted by the King without parliamentary sanction It is true that Edward in making these concessions contrived in some cases to combine them with arrangements that would equally serve his fiscal purposes But the fact that he knew how to make 'free trade' pay when driven to adopt it is no reason for crediting him with a policy of 'plenty rather than power' When acting on his own responsibility Edward persistently returned to a policy of restriction and monopoly for the simple reason that this policy enabled him to borrow, and he could only borrow by heavily discounting the resources of the future
The second imputed object of policy-the fostering of national industry by prohibiting the exportation of wool and the importation of cloth and by inviting Flemish manufacturers to settle in England, whilst it accords much less than the policy of "free trade" with the supposed scheme for commercial federation with Flanders, has somewhat more claim to be connected with the personal initiative of the King because the measures that purported to carry it into effect were royal letters patent,-some of which were issued in advance of the parliamentary enactments But when the whole circumstances of the case as recorded in the studies on the 'Taxation of Wool' and the 'Estate of Merchants' are duly considered, the part played by Edward in fostering English industry is reduced to comparatively small proportions
The statute embodying the supposed industrial policy of Edward III was passed in the spring of 1337 At that moment his intended war with France gave the King two strong preoccupations-to raise money at home and to get allies in the Low Countries In conjunction with a group of English merchants he was organising a monopoly in the exportation of wool which was meant to serve both his fiscal and diplomatic objects, and a temporary prohibition on the exportation was an essential part of the scheme The prohibition on Flemish cloth and the invitation to Flemish clothworkers were meant to intensify the diplomatic pressure on Flanders, whilst they might serve to mitigate English objections to restrictions on the exportation of wool This combination of devices was not new, it was one that tended to recur whenever friction arose between England and Flanders Its embodiment in a Parliamentary statute and the fact that a number of Flemish clothworkers availed themselves of the invitation have given it in this instance an altogether undue prominence in English industrial history That it did not represent any serious industrial policy in the mind of the King is shown by the fact that it was deliberately intended to lead-and did lead-to an alliance with Flanders by which Flemish industry secured a predominant hold on the English wool supply (fn. 7) The Flemish alliance, which thus involved a reversal of the industrial policy attributed to the King, might in itself have been part of a scheme for a commercial federation, but there is no evidence to show that this was actually the case, and the subsequent history of the alliance is much more intelligible in the light of the "dynastic ambition" hypothesis
In regard to the third aspect of the policy attributed to Edward- "he set himself to encourage thrift among the labouring population" -the discrepancy between precept and example, though bizarre and even ludicrous, is not on that account incredible The hearts of princes are unsearchable, and stranger contrasts are fully vouched for in the records of mediæval psychology Two questions however need to be asked Was the encouragement of thrift of such a sustained and serious character as to deserve the name of policy, and does the evidence warrant us in attributing it to the King rather than to Parliament? Of the only two recorded instances of this policy, in 1336 and 1363, the first occurred at the opening of the great war, when taxation was reaching a maximum, (fn. 8) and the second some years after the conclusion of peace, when a recurrence of the plague had added to the exhaustion caused by the war, and the Commons were struggling to reduce taxation and to prevent a natural rise of wages and prices In both cases the 'encouragement' is embodied in an Act of Parliament and is easily explicable as the product of a transitory movement of public opinion The petitions of the 1336 Parliament are not extant, but those of 1363 show that the statute of that year was based on the demands of the classes represented in Parliament The Commons show that "divers victuals within the realm are greatly enhanced in price by reason that divers people of divers conditions use divers apparel not belonging to their estate," and the statute made in response to this petition proceeds to regulate the dress of every rank up to that of a knight, whilst in the more important matter of diet its restrictions apply only to labourers in husbandry, journeymen and other servants, or to those who have not goods and chattels to the value of forty shillings (fn. 9)
From the standpoint of recent experience it is not difficult to realise the mood of the governing classes which finds expression in this legislation At a time of national exhaustion, vividly depicted for us in the sixth Passus of Piers Plowman, when victory had been speedily followed by plague and famine, when the freebooters who had wasted France for twenty years had returned to pillage their peaceful neighbours, (fn. 10) at a time when all classes were demoralised and the restraints of custom and religion were widely disregarded, there was a demand for national reformation in which all classes except the nobility and the higher clergy were to share But whilst there was no effective guarantee that knights and their ladies would amend their lives and their households at the bidding of an Act of Parliament, the clauses that affected the labourer were an addition to a code of class legislation for the enforcement of which special machinery had been provided, and the stringency of which had been greatly increased at the conclusion of the war The Statutes of Labourers have been defended on the ground that they provided for the regulation of prices as well as of wages But whilst wages were fixed at a definite and impossible maximum, prices were only required to be "reasonable", and whilst the penalisation of excessive wages was universal and drastic, the penalisation of excessive prices could only be occasional and ineffective It fell upon the class of small traders which was least responsible, if any class was responsible, for the increased cost of living, and which was little better represented in Parliament than the journeyman or the labourer (fn. 11) Perhaps it was a sense of the futility and injustice of this procedure that led to the inclusion in the Statute of 1363 of the clause which aimed at checking the monopoly of large importing merchants by restricting every merchant to one branch of trade (fn. 12)
A single year of experience sufficed to show that these measures of national reconstruction, however disinterested in intention, had in fact served to increase the evils they professed to cure, whilst they threatened to subject the nation to a new and intolerable servitude The restriction of merchants to one branch of trade had been made the basis for the bestowal of chartered monopolies by the King which had raised prices thirty per cent higher than before The Commons therefore prayed that the whole statute might be repealed, that the charters might be annulled, and "that all people of whatever estate or condition may freely order their sustenance, in food and apparel, for themselves, their wives, children and servants in manner as seems to them best" (fn. 13)
When we speak of the economic policy of Edward III or of his parliaments we make what is a natural but at the same time a questionable assumption The word policy implies a continuous unity of purpose in public affairs or an attempt to achieve such a unity. Even the attempt is a late product of historical development It implies the control of legislation and of administration through a consciousness of the interests of the nation as a whole, guided by more or less adequate ideas, and capable of restraining and subordinating the operation of lesser interests Now the records of Parliament in the fourteenth century, and indeed in many later centuries, contain ample evidence of the effective operation of a multitude of minor interests, and when we speak of national policy we assume the existence of a national interest through whose activity the partial interests of classes, or localities are to some extent harmonised and controlled Have we any evidence of this in the records of Edwardian Parliaments?
A near approach to it may perhaps be found in the petitions to the King, frequently adduced as the ground of legislation, which claim to express the views of the Commons or the "poor Commons" or "the Community of the Realm" The demands embodied in many of these petitions represented interests wide enough to be called national, and they were maintained with sufficient continuity to constitute a policy if they were harmonious and effective The widest of these interests was that of the taxpayers resisting the enormous increase of taxation made necessary by the war with France This was indeed the most universal, powerful and continuous interest operative in Parliament throughout the reign, but it did not produce continuous effects in economic policy On the contrary it tended, in conjunction with the King's increasing demand for increased supplies of money, to produce a marked discontinuity of policy in regard to the wool trade Unwillingness to grant direct taxes at first induced the Commons (1340) to legalise for a limited time not only a very high export tax on wool, but also the exercise of a royal monopoly in the export trade, but a few years' experience of the evils of these methods of taxation led them (1344) to offer a grant of direct taxation on condition of the withdrawal of the monopoly and of a speedy diminution of the wool tax. Later on (1353), finding it impossible to get rid of the high export tax, the Commons returned to the policy of withholding direct taxes and of resisting the exercise of monopolies in the wool trade
But the petitions of the Commons reveal other widespread economic interests which had more direct and continuous effects upon fiscal policy The largest of these interests was that of the wool producers-a body that must have included the great majority of those who found representation in Parliament Their first wish was to have no tax on wool, but, if a tax must be laid, they desired that a minimum price might be set on the various kinds of wool which it was hoped would have the effect of throwing the tax on the foreign consumer In the same way they were opposed to any staple restrictions on the export of wool, but they preferred a number of staples, where there would be comparatively free access of both home and foreign buyers, to a single foreign staple which was avowedly set up in the interests of royal and mercantile monopoly
Quite apart from and often opposed to the interests of the grower were the interests of the dealers in wool These did not all run in one channel At least three distinct bodies of mercantile interest can be observed in operation, each of them associated with one of the three alternating staple policies of the reign One body of merchants clearly agreed with the growers in supporting the entire abolition of all staples so as to have free access to upland supplies Another set of trading interests favoured the establishment of home staples which enabled them to reap a preferential advantage out of their local connections, whilst the various monopoly projects based upon the maintenance of a foreign staple attracted the support of a small class of wealthy exporters
Numerous attempts were made during the first period of the French war by the fiscal opportunism of the King to ally itself with various combinations of the two interests last named The failure of these attempts owing to the opposition of the Commons, the persistent bad faith of the King and the conflict of the interests with which he sought alliance, and the success of Parliament in absorbing most of these interests, in defining its constitutional status and in formulating and enacting a measure that had some claim to be considered a national policy-have been fully described in two of the studies contained in this volume The taxpayers, the wool growers and the smaller merchants were united in opposition to the continuance of the monopoly embodied in the staple at Bruges Fifteen years' experience of a succession of syndicates of native monopolists led them to demand the exclusion of English capitalists from the export trade and the re-establishment of the home staples through which it was hoped both the grower and the small dealer would get the benefit of the free access of foreign capital The King in return for his abandonment of a bankrupt monopoly system received a grant of wool subsidy for three years, and willingly consented to an exclusion of native exporters which secured him a higher rate of export tax from aliens
But if the regulation of foreign trade in the middle decade of Edward's reign exhibits a marked tendency towards a national policy, there are two assertions that may be clearly made about that policy It was not an Edwardian but a parliamentary policy, and it was not a mercantilist policy, i e, it did not aim at the protection of native merchants, manufacturers or shipowners against foreign competition Indeed it might be considered as anti-mercantilistic were it not that mercantilism as a policy had scarcely as yet found articulate expression The parliamentary policy arose in deliberate opposition to methods of fiscal opportunism practised by the King which had very much in common with the methods of later mercantilism Edward III has no claim at all to the title "Father of Commerce," but he would have a genuine claim to be considered as the Father of Mercantilism, if his fiscal and diplomatic devices had sought justification on broad grounds of national interest Mercantilism became a policy when the merchants and manufacturers became strong enough in Parliament to represent their interest as the national interest The attempts of Edward III to bargain separately with the merchants show that in the early half of his reign the interests of the landed classes as taxpayers, producers and consumers were still predominant in Parliament
Nevertheless there is one phase of national policy closely associated with the mercantilism of later reigns of which the distinct beginnings are to be found in the legislation of this period One of the main motives of the establishment of the home staples as set forth in the ordinances was a desire 'to replenish the realm with money and plate of gold and silver,' (fn. 14) and this is too much in accordance with earlier petitions of the Commons to be attributed solely to the fiscal exigencies of the Crown The popular remedy for the evil of a disappearing currency had been found in the enactment in 1340 that two marks of silver should be deposited at the Tower for every sack of wool exported, (fn. 15) and an equivalent requirement formed the central feature of the staple at Calais when Parliament had become reconciled to it as a permanent institution and had authorised its regulation Bullionistic policy was no doubt motived largely by fiscal needs, but it was supported by popular opinion, and this opinion, if it was a delusion, was not an abstract or theoretical delusion (fn. 16) When papal taxation was levied and the King's foreign allies subsidised in English wool, it seemed a practical remedy for an actual grievance to insist on cash payment for the chief national export
The matter was indeed not so simple as this Inadequate ideas on the nature of money and the almost universal dishonesty of governments at a time when the operations of international finance were rapidly extending and a bi-metallic system was everywhere in course of adoption, had reduced the currency and the foreign exchanges to a state of permanent confusion But it has not been sufficiently realised by historians that the evils for which the governments of the middle ages continually professed to be seeking a remedy were to no small extent the consequences of their own actions Edward I, for instance, is represented as struggling in 1299 heroically but vainly against the outflow of his own and the inflow of foreign coinage But the outflow of good English coin was the result under "Gresham's law" of the King's having begun in war time to coin money of a lower standard, whilst the foreign money that flowed in was to a large extent the exported English silver reminted into coin which was quite equal to the King's new standard but upon which the King's heavy charge for recoinage had not been paid
Similar complaints of the outflow and inflow of currency became a normal incident of war finance under Edward III And if the Commons did not fully grasp the causes of these phenomena their demands were generally reasonable and to the point It was not unreasonable at a time of social unrest and of unstable prices to ask that the government should not further dislocate the whole range of public and private contracts by tampering with the currency Nor was it unnatural to expect that the government should receive as taxation the inferior coinage with which it had been paying its debts, or to demand that when money had lost a third of its former value the prices paid by the royal purveyors for the people's wool should be raised to a corresponding degree (fn. 19)
It seems then that there is little ground for attributing any definite economic policy to Edward III except the one implied in the judgment of Stubbs, "Like Richard I he valued England primarily as a source of supplies." If any distinctive policy is to be associated with the reign it must be attributed to the action of Parliament This, however, only serves to bring into greater relief the contrast that has been made, in regard to economic policy between the reign of Edward III and and that of his successor The change from a 'policy of plenty' to a 'policy of power,' so far as it took place, corresponded to a change in the mind of Parliament itself, and was not due to the passing of a monarch of exceptional economic genius, who had anticipated the views of Cobden and Gladstone It is not unreasonable to expect that the studies collected in this volume should afford some new light as to the reality, extent and significance of this important change in public opinion, but as they are concerned with only one of the contrasted periods, we need to be furnished in advance with fairly accurate conceptions of the other period
Some of the leading elements of the "policy of power" or mercantilism are undoubtedly to be found embodied in the Acts of Richard the Second's Parliaments, but it would be an entire mistake to suppose that Parliament during the reign of Richard the Second consistently and continuously pursued either a mercantilist or any other form of economic policy Almost every session of Parliament witnessed a reaction and sometimes a violent reaction from the policy of the previous session. The Parliament of 1381 passed the first Act for the protection of the native shipping interest The Parliament of 1382 practically repealed this Act, which had been supported largely by the fishmongers, and passed an Act for securing free trade in fish, which in the following Parliament was in its turn repealed The same contrast is to be found between the 'free trade' policy of 1391 and the anti-alien legislation of 1393 Taking the reign as a whole we have to recognise a distinct development of mercantilist opinion and policy in Parliament, but the opposition continues to be active and frequently successful (fn. 20)
But what of the other side of the contrast-the policy of plenty or of free trade pursued by the Parliaments of Edward III? As far as the mind of Parliament may be said to constitute a policy we have here something much less ambiguous The demand for 'free trade,' i e the relaxation of staple restrictions and the free intercourse of alien exporters and importers with native producers and consumers or their agents-finds repeated and increasingly emphatic expression throughout the first four decades of the reign and is embodied at long intervals in the 'free trade' enactments of 1335, 1351 and 1365, as well as in that great commercial code-the Statute of the Staple 1354 There is, moreover, no general body of opposition to set off against this consistent and continuous expression of Parliamentary opinion Nevertheless it would be a serious mistake to take the 'free trade' enactments as constituting in a practical sense the policy of the reign In point of fact they were little more than protests, and for the most part ineffectual protests, against the administrative and fiscal action of the King. Within a year of its enactment each of the statutes of 1335, 1351 and 1365 had become a dead letter The opposing force that served to nullify them lay in the ever present exigencies of war finance In actual practice there was probably less realisation of the policy of free trade in the reign of Edward III than in that of Richard II The contrast between the two reigns is not one of policy in the sense of governmental practice, but one of policy in the sense of the reasoned basis of statecraft It implies a new growth of opinion and theory, and a new growth of organised interests represented in Parliament, through which the new opinions find effectual expression Such a growth is, however, to be traced not merely by contrasting the two reigns, but also by comparing the successive decades of the reign with which the following studies are especially concerned