Economic Impact Flashcards
Introduction:
During the reign of Henry VI there was a dramatic collapse in royal revenue. Richard II’s (r.1377-1399) annual revenue stood at approximately £120,000 by the last years of Henry VI’s reign (late 1450’s) this had plummeted to £40,000. Henry VI’s net annual revenues of 1428-54 perhaps averaged only 60% of those of his father Henry V between 1413-22. The total debt of the English Crown by 1450 has been estimated at a massive £372,000. Essentially, when the political crisis hit in 1450 the Lancastrian regime of Henry VI was financially bankrupt
What was the ‘Great Slump’?
- The ‘Great Slump’ of 1440-1480 affected all of Europe. Foreign trade decreased, there was a shortage of bullion (the metal the coins were made of - coinage) in circulation and prices fell
- An agrarian (farming) crisis came first, followed and being overlapped by a crisis in trade and commerce. The agrarian crisis was linked to population size, which at best in the mid fifteenth century remained stationary and in some places was falling between 1430 and 1485. Epidemic diseases had an impact on this (remember the Black Death had killed a third of England’s population in the mid fourteenth century). This reduced the number of land tenants (so rent prices fell hitting landowners) and reduced the number of wage earners (so shrinking the economy)
- The trade crisis was caused by contracting markets, resultant trade embargoes, a bullion shortage (precious metals such as silver being exported to Asia) leading to declining activity in European mints and a reduction of coinage in circulation, all of which led to a sharp fall in prices. The fall in wool prices had a major impact on the agrarian crisis, much of England’s wealth being generated by the highly lucrative wool trade. Cloth was another vital English export, along with grain
- By the late 1450’s wool prices were 62% of what they had been in the early 1430’s. English cloth exports had reached an all-time high in the early 1440’s; by the 1460’s they had dropped to half that level. Between 1446 and 1450 cloth exports fell by 35%
- This decline in overseas trade hit Crown revenues hard. Royal income from customs duties fell from £40,677 p.a. (1421) to £28,100 p.a. (1446-48). The depressed economy meant taxes were also harder for the government to come by
Did the ‘Great Slump’ have a political impact on Henry VI’s reign?
- Yes, it was a time of financial hardship and recession. Sheep-farmers and cloth-workers particularly suffered. Richard Britnell, having studied the economic crisis in detail, concludes that in all probability the ‘dissatisfaction with Henry VI’s regime was deepened and broadened by economic discontent’
- The shortfall of revenue, combined with allegations that the kingdom was overtaxed (partly due to the renewed outbreak of war with France in 1449), fed directly into discrediting his government
- The foreign trade crisis hit London particularly hard, as this was by far the largest (population c. 50,000) and busiest trading centre in England. Disaffection in London was a serious problem for any English king
So, was none of this economic crisis Henry VI’s fault?
- Henry could not do anything about the Great Slump. That wasn’t his fault. But some government policies intended to alleviate the crisis did the opposite…
- English protectionist legislation (imposing high tariffs) to protect its bullion (coinage) provoked Burgundy to exclude English cloth from its markets in 1447. Burgundy was by far England’s biggest and most vital export market
- In 1449 the government sanctioned an attack on the Hanseatic Bay fleet. The attack was a success with 110 ships being captured. The Hanse, however, was a formidably powerful trading federation, and as result excluded English goods from markets in Germany and the Baltic
- The renewal of war with France in 1449 only worsened the economic crisis in England. Indeed, the gradual erosion of English royal finances was partly attributable to the last decades of the 100YW. Parliament was increasingly reluctant to grant taxes to finance a war that clearly was being lost, and it was the royal household that had to beg, borrow and scrounge to pay for the costs. The loss of Normandy and Gascony (Bordeaux, wine fleet) also damaged the English economy
Was that all Henry VI did wrong with regard to the economic crisis?
- No, certainly not! The Great Slump might not have been his fault, but Henry’s carless, misdirected and extravagant spending at a time of financial crisis and economic hardship was a monumental mistake and entirely avoidable. Rather than reduce his expenditure, he continued to spend, make grants and carry on regardless
- Eton was founded in 1440; King’s College, Cambridge was founded in 1441. Henry devoted huge financial resources to both projects, spending approximately £1,000 pa on the building works of each and sometimes more. Between 1444 and 1461 it has been estimated that he spent £15,000 - £16,000 on each foundation. By the late 1440’s parliament was complaining about the extravagant costs of Eton
- Royal grants were too generous and extravagant. In 1438 Henry granted the same estate to two different individuals on consecutive days! In 1444 an ordinance was issued that all petitions for grants be scrutinised by the king’s councillors before Henry granted any of them. A significant number of grants were life annuities (payments until the person getting paid dies) which the crown could ill-afford to lose at a time of financial hardship. James Ross says of Henry that ‘his generosity threatened his tenure of the crown’
- Many of these grants were to those nobles perceived to be the king’s favourites. William Aiscough, a former royal chaplain, the king’s confessor and ultimately the bishop of Salisbury, was found to be in possession of goods worth £4,000 marks (twice the annual revenue of his bishopric) when hacked to death by the mob in 1450. William de la Pole, duke of Suffolk, amassed wealth through the grants of prized heiresses in the wardship of the Crown, lands and lucrative offices. Somerset’s wealth was dependent on royal favour
- An ordinance in 1445 sought to restrain the expenditure of the royal household but this was ignored. The costs of the household more than trebled from 1444 onwards, being a seriously substantial £24,000 by 1450. The total royal debt at this time was possibly a staggering £372,000. Royal income in 1450 was approximately £33,000 pa. In 1450 the wages of the strategically vital Calais garrison were £20,000 in arrears
- During the 1430’s and early 1440’s the Crown had made use of private loans and the employment of merchants in the Exchequer who had made mercantile credit networks available. By 1449 the Crown’s financial credit was exhausted. Loans were no longer available
So, was the economy a key cause of the Wars of the Roses?
It played a part, but was not a key cause. Certainly, the economic crisis led to disaffection in England. The downturn in trade hit the south-east particularly hard, and it’s no coincidence it was here that Cade’s Rebellion flared into life. The drop in land rental prices was particularly felt in northern England and would have affected magnates such as Salisbury and Northumberland; no doubt it was the depressed land market that intensified rivalry over land, such as the manor of Wressle that led to the clash between the Percies and Nevilles at Heworth Moor (1453). The economic crisis meant it was even more important to be part of the king’s inner circle if a magnate wanted repayment (Somerset for money owed while lieutenant in France) or to gain financially through the grant of wardships, lands and offices
Most significantly, however, the economic crisis was yet another failure that undermined the credibility of Henry VI’s regime. That he seemed oblivious to it, doing nothing to curb his spending or generous grants, led to populist accusations that his government was not ruling in the interests of the commonweal. Consider the complaint from the Proclamation of Jack Cade (1450): ‘the king himself is so placed that he may not pay for his meat and drink, and he owes more than any King of England ought…’ The popular perception was that Henry had negligently impoverished the Crown, and more explicitly that this was due to the ‘traitors about him’. The populist hatred of favourites such as Suffolk and Lord Saye was exacerbated by the belief they were profiting at the expense of the king and the kingdom during a time of economic hardship. Richard, duke of York was relentless in pushing for acts of resumption to stabilise royal finances. It was a call the Commons in parliament supported. Indeed, it could well be argued that York drew more support from this than from his attacks on Somerset. A.J. Pollard acutely observed that ‘the recession underpinned popular agitation and support for disaffected noblemen’, thereby adding a sense of populist legitimary to their opposition
The economic crisis exacerbated problems, such as Henry VI’s inadequacies as king and hatred of the favourites that surrounded him. It led to widespread disaffection with his regime and a strong sense that the king was not ruling in the interests of the commonweal. It gave legitimacy to magnates opposing the regime. The lack of money sharpened magnate rivalries and made it even more critical to be part of the king’s inner circle. The economy was an accelerant that gave additional fuel to other causes rather than itself being a key cause of the Wars of the Roses
