CHAPTER I

HENRY VII AND HIS COMMERCIAL POLICY

The reign of Henry VII marks the opening of the modern era in the history of the English nation, the period in which, from being an agricultural and military people, we have become transformed into a maritime and commercial community, with interests stretching far beyond the shores of our immediate neighbours on the continent of Europe. Throughout the Middle Ages all the strivings and ambitions of England were concentrated on the conquest, by force of arms, of the surrounding countries—of the remaining parts of the British Isles at first, and afterwards of France. With a hardy and independent peasantry and a fierce and warlike baronage, it could scarcely have been otherwise. English kings found themselves obliged, for their own preservation, to put themselves at the head of such movements, and those of them who were unable or unwilling to do so were continually menaced by the turbulent elements to which they refused an outlet.

This system of violent expansion, successful in the cases of Ireland and Wales, and not seriously pursued in that of Scotland, proved to be its own destruction when applied to France. Although a military conquest might endure for a time, it was impossible that England could permanently absorb a nation larger than itself, of different blood, language, and manners of thought, in the same way that Wales had been absorbed. When Henry V commenced his wonderful career of conquest the sentiment of nationality was already too well established; and the long struggle, which ended forty years later in the expulsion of the English from France, consolidated that sentiment, and rendered the renewal of such an attempt for ever impossible of success. But just as France had developed from a mere geographical area into a nation in the modern sense of the word, so also had England, although much remained to be done before her development could proceed on truly national lines. The Wars of the Roses, protracted, with intervals of peace, for thirty years, cleared away much of the remaining débris of feudalism; and at their close Henry VII came forward as the first king of modern England. The old ideals, the old national instincts, and the old social order had gone, or were in process of dissolution; and the work of his reign consisted in forming new ones and giving direction to that universal awakening of the human mind which now first began to make its influence felt in the practical affairs of the English nation.

As with all changes of deep-rooted and far-reaching importance, its results were slow to manifest themselves, and were scarcely apparent to many of the greatest minds of the time, bred up to the old order, yet nevertheless working unconsciously in the furtherance of the new. The king himself, who did more than any other man to usher in the new era, and whose policy has been followed, with intervals of retrogression, almost to our own time, may well have been unaware how greatly he differed from his forerunners, and there is nothing in his recorded utterances to show that he realized the significance of the change that was taking place. In fact, as compared with many of the more flamboyant statesmen who followed him, he must have appeared slow and conservative, a survival of mediaevalism rather than a man of the Renaissance. Like the evolution of the natural world, that of imperial Britain has been largely unconscious, and measures which owed their origin to expediency and the needs of the moment have frequently hardened into enduring elements of the national system. Let us then examine, from this point of view, one aspect of the reign of the first Tudor—his commercial policy; bearing in mind that, although he himself was concerned only with the immediate welfare of his family and country, his work was of such a character as to serve as the foundation for an edifice upon which the passage of four Centuries has not yet placed the topmost stone.

European commerce, down to the age of the great geographical discoveries, hinged upon two great trade routes and two great producing areas, the one of manufactured, and the other of raw, material. To these four dominant factors all subsidiary avenues and crafts owed their origin and continued existence. The two primary trade routes were: first, that connecting, by way of the Levant and the nearer East, the Italian cities with the vaguely known and fabulously portrayed wealth of southern Asia; and second, that by which the hardy merchants of the Hanseatic League conveyed the produce of the Baltic shores, of Scandinavia, of the wide plains of Muscovy, and through them the far-fetched wares of Persia and Cathay, to western Europe, which region, stimulated by amenities whence the indolent mind of Asia drew no profit, inevitably became the centre of the world’s progress. Nothing for nothing being a universal law, Europe had to find something of her own to exchange for the furs of the North and the spices of the East. The cities of the Rhine delta supplied, in great part, the indispensable _quid pro quo_, by devoting themselves to a variety of manufactures amongst which that of cloth assumed a position of paramount importance. Here, then, arose the first producing area necessary to the balance of the mediaeval trading system; England constituted the second and equally indispensable one, for she alone, secured by the sea from the worst scourges of war, could supply the raw material for the cloth industry. The generous wool-sacks of England became her title of entry into the ranks of the progressing nations of the world.

Already, before the dawn of the new era, England had begun to manufacture a portion of her wool into rough, inferior qualities of cloth, but, until the awakening under the Tudor dynasty, she cannot be said to have realized the possibilities of her position. The Hanse merchants and the Italians were in possession of the bulk of her foreign commerce, and only a few subsidiary trades were in the hands of Englishmen, whose education and ability in such matters were inferior to those of the foreigners.

[Illustration:

TRADE ROUTES from and to ENGLAND at the commencement of the Tudor Period. ]

A more detailed consideration of the lines of communication with which England was immediately concerned reveals four main commercial avenues, all forming part of the great general system already described: the trade with Germany and the Baltic, chiefly controlled by the great Hansa, whose tentacles spread from Riga to the Rhine; the export of half-made cloth to Flanders, shared between the Hansa, the Flemings, and the English Merchant Adventurers; the wool export, to Calais by the English Staple Merchants, and overland to Italy by the Venetians and Florentines, who maintained business houses for that purpose in London; and the long sea route for wools, wines, and spices, to and from the Mediterranean, again monopolized almost exclusively by the Italians. In addition there were minor, but nevertheless much frequented, trades to Spain for wines and oils, to Gascony for wines, and to Iceland for stock-fish. The two last mentioned were more exclusively in the hands of Englishmen than any of the others.

These mediaeval trade routes, although destined to be profoundly modified by the great extension of the limits of the world as known to Europeans, remained of paramount importance for more than a century to come, and Henry VII set himself to the policy of ousting foreigners from their control, and of fostering, by every means known to his statesmanship, the mercantile enterprise of his own people.

One of the shrewdest business men who ever sat upon a throne, he had no doubt studied and admired the commercial system of Venice. That state, which existed solely by means of and for the purpose of trade, maintained her ascendancy by a fiscal policy which combined rigorous protection with a species of socialism undefiled by any morbidly altruistic ideas. All the familiar weapons of modern protection—preferential duties on goods from Venetian dependencies, navigation laws to encourage Venetian shipping, retaliatory tariffs against rivals, and reciprocal arrangements with such as were disposed to be reasonable—were to be found in the armoury of Venice, and were applied with an unquestioning assurance as to their efficacy, only possible in an age when the doctrines of free trade were yet unborn.

In addition there was in Venice an absolutely complete subordination of the individual to the interests of the State. If the export or import of a certain article was considered prejudicial to the welfare of the city, that trade was stopped forthwith; if the clothworkers of Venice were short of raw material, shipmasters coming from England were ordered to load with wool and nothing else; if the State galleys for the Flanders voyage had difficulty in completing their cargoes, those who preferred to ship their goods in private vessels were forced to pay half or quarter freights to the official ships as well; since it was desirable that Venice should possess a large commercial navy, the overland conveyance of certain wares was forbidden or subjected to paralysing duties. Such are a few examples of the working of an undemocratic republic, of a type which may never be seen again, but which was eminently suited to the needs of its time. And the secrets of the success of this unparalleled interference by the State with individual rights? They were two: first, magnificent discipline, ready obedience enforced by severe penalties; and second, an elasticity of method, an instant variation of policy to meet varying conditions, which could only have been carried out by an assembly of level-headed, patriotic merchant-statesmen, such as filled the benches of the Venetian senate.

Henry VII, then, had before him a pattern of successful mercantile policy, but he was under no illusions as to his powers of enforcing such a discipline on England. Although he far exceeded him in subtlety of mind, he lacked the ferocious mastery of men which his son was afterwards to display. He had to make up his mind to work slowly and cautiously, to be content to sow that others might reap, to lay sure foundations for the greatness of his family and of the country with which its interests were bound up.

Generally speaking, the policy of the Middle Ages had been, in the interests of cheapness, to encourage foreign merchants of all kinds to bring their goods to England, and to establish factories in her ports; in many cases, even, aliens had been granted privileges exceeding those of native traders, and consequently the trade of England was largely in foreign hands. Henry soon gave signs that this policy of cheapness was to be abandoned. His first Parliament passed an Act[2] prohibiting the import of Bordeaux wines in other than English vessels, manned by English crews. To avoid friction, the too sudden application of this law was mitigated by the frequent granting to foreign merchants of licences to break it. But these were exceptions; the rule remained, and the grants of licences gradually diminished.

While determined to advance the general interests of his subjects, he was always ready to conclude commercial treaties conferring a mutual exchange of benefits; and he sought, wherever possible, to draw mercantile advantages from his handling of purely political matters. The commercial relations of England and the Netherlands form an illustration in point. In 1493 there was a serious quarrel on account of the support given to Perkin Warbeck by Margaret, the widowed Duchess of Burgundy and sister of Richard III. Henry’s retaliation to her vindictive encouragement of his enemies consisted in ordering the cessation of all intercourse, and the removal of the Continental head-quarters of the Merchant Adventurers from Antwerp to Calais. Uninterrupted trade with England was essential to the prosperity of the Netherlands, where a large proportion of the craftsmen were employed in dyeing and finishing the rough English cloth. There was on both sides great distress in commercial circles, and unemployment due to the loss of trade; but the inconvenience thus caused, while considerable in England, was intolerable in the Netherlands, and the result was the negotiation of the famous _Magnus Intercursus_ of 1496, followed by supplementary treaties in 1497 and 1499.[3] By these treaties tariffs were reduced, fishing rights regulated, and many vexatious restrictions abolished; in addition, Henry secured the political object for which he had undertaken the struggle. When the English cloth merchants returned to Antwerp they were received with public demonstrations of joy.

The English king, although willing to make concessions when such were inevitable, showed himself remorseless in seizing an accidental advantage. In January 1506 the Archduke Philip, who had succeeded to the throne of Castile on the death of Queen Isabella in 1504, set out from Flanders to Spain by sea. In the Channel he encountered a furious storm, and, after all on board had given themselves up for lost, his fleet reached the shelter of Weymouth. Contrary to the advice of his captains, he went on shore. The country people, seeing the arrival of strange ships and armed men, gathered to resist an enemy, but, finding him to be a friend, they made him welcome. Sir Thomas Trenchard, a most astute gentleman of the neighbourhood, offered him entertainment, and sent off post haste to acquaint King Henry of the prize which fortune had cast on his shore. Philip now realized his rashness and would have been glad to depart, but was earnestly entreated by Trenchard and his friends to stay and speak with the king. Fearing that if he insisted their courtesy would give place to force, he put a good face on the matter and professed himself delighted to remain. Henry sent the Earl of Arundel, with many lords and knights, to bring him to Windsor with his wife Juana.

He was paraded through London and, as the price of his liberty, had to agree to a commercial treaty which settled outstanding questions in such a one-sided way, and admitted English cloth at such a cheap rate to the Netherlands, that the defrauded Flemings named it the _Malus Intercursus_.[4] In those times shipwrecked voyagers received scant compassion, and Henry was only taking the same advantage on a large scale as his unscrupulous subjects took on a smaller one when they stole the cargoes from stranded ships. Philip died without ratifying the treaty of 1506, the details of which were not completed until after he left the country, and relations became unsatisfactory in consequence. Margaret proposed to resume trade on the terms of the _Magnus Intercursus_, but Henry was unwilling to forgo his hard bargain. Finally, a compromise between the treaties of 1496 and 1506 was agreed upon, the customs payable by Englishmen in the Netherlands remaining on the basis of the latter. The question of the legal validity of the _Malus Intercursus_ remained unsettled, the matter being postponed from time to time by the issue of provisional ordinances for its maintenance. As late as 1538 the Netherlanders were still demanding its abrogation.[5]

An important trade existed between England and Spain and, at the beginning of Henry’s reign, it was largely in the hands of Spanish merchants, a number of whom resided in London. The customs duties had long been in an unsettled state, and were the subject of an arrangement included in the Treaty of Medina del Campo, 1489.[6] It was provided that the subjects of either country might travel, reside, and carry on business in the other without a passport, and should be treated in every way as native citizens. Customs duties were to be reduced and all letters of marque (i. e. private reprisal for injuries) revoked. There were also other clauses intended for the suppression of piracy, a subject which will be referred to later.

That such treaties were often broken is proved by their frequent renewal; and indeed, the signing of a treaty was more often the signal for a commencement of wranglings as to its interpretation, than a token of settlement. In the case in point it had been agreed that customs were to be reduced to what they had been thirty years before. The intention was plain, but Henry discovered that the English duties had been _higher_ at the date mentioned than at the time of the treaty, and he promptly increased them, although the Spaniards protested that they had lowered theirs. The dispute on this point dragged on for many years, and references to it occur at intervals in diplomatic correspondence until the marriage of the Prince of Wales and Katherine of Aragon. A curious fiscal argument occurs in a letter from Henry to the Spanish sovereigns in 1497.[7] He says that the effect of the high duties is that Spaniards sell their goods at a high price in England, and so are enabled to obtain more English cloth with the proceeds than they could otherwise do. Thus the duties are paid by the English, not the Spaniards. An excellent sermon—for other people—on the disadvantages of protection!

Although anxious to foster English trade and enterprise to the utmost, Henry could not afford to neglect his dynastic interests, and the latter were of paramount importance in his dealings with Spain. His title was weak and his enemies strong, and, during the first part of his reign, it seemed quite likely that he would perish in a feudal revolution as four of his predecessors had done in the space of a century. To remedy the instability of his throne he was sometimes obliged to make use of commerce as a weapon or a bribe, as opportunity offered. An instance of the first was seen in his dealings with the Netherlands; the negotiations for the Spanish marriage were an example of the second. The proposals and hagglings with reference to this marriage dragged on for years. Henry was eager for it. He was, in a sense, a parvenu among the kings of Europe, and he felt that it was a vital matter for him to establish his family among them. Ferdinand and Isabella, on the other hand, had great hesitation in allowing their young daughter to be exiled among the English, whom the Spaniards regarded as being socially and morally inferior to themselves. In addition to this personal objection they had another. They wished to procrastinate until Henry should have disposed of his pretenders and given proofs of the firmness of his throne. Hence his extreme eagerness to lay Perkin Warbeck by the heels, which embroiled him with the Netherlands in 1493. The marriage being the keystone of his policy, he left no means unused to bring it about, and so we find commercial relations employed by him as a screw with which to extort the reluctant acquiescence of Spain. In 1496 he declared that he would come to an understanding on the question of the duties after the alliance and marriage should have been concluded. In 1497, in the letter already quoted, he promised that Spanish traders should have preferential treatment as against the Italians in celebration of the happy arrival of the princess in England, an event which was still to be delayed, as it proved, for more than four years to come. One more instance of the intimate connexion of politics and trade may be given. In 1504 the Spanish Government prohibited the export of goods from Spain in foreign vessels so long as there were any Spanish ships unemployed, but in consideration of the position of the now widowed Katherine in England and of their desire to recover her or her dowry, the English were exempted from the application of this law.[8]

With Venice Henry VII was never on bad terms, although for several years a brisk tariff war was waged between the two powers. It arose from the

## action of Venice in imposing an additional export duty of four ducats

per butt on malmsey wines loaded by aliens at Candia. This was done under pretext of discouraging the pirates of that region, but in reality for the purpose of favouring Venetian shipping. Henry retaliated by making Venetians pay 18_s._ per butt extra duty on importing these wines into England, and by fixing a maximum selling price of £4 per butt. A butt of malmsey contained 126 gallons, and a gallon of the wine thus cost about 7½_d._ in England. The differential duty and the maximum selling price threatened to squeeze the Venetians out of the market, but the king went further. He entered into negotiations with the Florentine Government with a view to the establishment of an English wool-staple at Pisa.[9] This would have constituted the latter city the distributing centre for English wool in the Mediterranean, and Venice would have been deprived at a blow of an important branch of her trade. The proposal seriously alarmed the Venetians, and they threatened to discontinue the dispatch of the annual trading fleet to England. It would have been manifestly impossible for them to bring cargoes of spice to England if they were debarred from loading wool in return, especially as the export of specie from England was prohibited. The Pisa project was probably not seriously intended and was not persisted in, although the appointment in 1494 of two English consuls in that city, with full authority over English merchants, indicates that considerable business was done there.[10] In the end, after lengthy but quite dispassionate negotiations, such as befitted business-like powers, Henry carried his point and the wine duties were reduced.[11]

The prohibition of the export of money, and also of gold and silver plate, from the realm was typical of the economic ideas of the time. Gold was looked upon as wealth in itself rather than as a means of exchange, and this notion was strengthened as time went on by the enormous apparent advantages which Spain derived from her American conquests. It was an error which led Spain to ruin, and would have been equally fatal to England if she had had the same opportunity to go astray. Fortunately, Englishmen found themselves excluded from the gold-bearing regions, and were driven to trade and eventually to colonization instead.

To be successful as a merchant under the conditions which obtained in the days when individual effort was beginning to displace the rigid guild-system of the Middle Ages, a man had need of alert wits, a stout heart, and capital sufficient to enable him to withstand the violent fluctuations of fortune. Even in times of peace the risks were great, although undoubtedly the profits of the successful were proportionate. Shipwrecks were necessarily frequent on unlighted and practically uncharted coasts; the trade routes were infested with pirates and privateers; and commercial treaties were broken almost as soon as made. The cautious trader, before venturing his goods into a foreign country, was careful to procure a licence or safe-conduct from the Government, and even this did not always protect him. If he could obtain the patronage of a powerful person, he might contrive to avoid the payment of customs dues. In 1492, when Henry VII imposed the prohibitive duties on Candia wines, the Venetian merchants in London were advised to distribute forty or fifty butts of the wine, or their cash equivalent, as bribes in getting the matter set right. Even State-owned vessels were not secure from molestation, when sufficiently far from home. In the same year, 1492, we read that Henry, being at war with France, detained the Flanders galleys of Venice to act as transports for his troops.[12] A powerful Government might secure compensation for such an infringement of its neutrality, but private merchants would have stood little chance of doing so. Conditions such as these caused success to depend entirely on individual qualities; and when once they took to the sea Englishmen were not slow to develop that character for resource and audacity which stood them in such good stead in the long war with Spain at the end of the sixteenth century.

An incident which occurred in 1505 shows how little reliance could be placed upon treaties by the persons whom they were designed to benefit. On the strength of an undertaking by the Spaniards, already mentioned, that notwithstanding the navigation law the English might freely export goods from Spain, a fleet of English merchantmen went to Seville, with cargoes of cloth, intending to come back with wine and oil. On arriving there, they were forbidden by the local authorities to export anything, and returned professing themselves ruined. Their spokesmen petitioned the king, ‘with much clamour’, for redress. Henry sent for de Puebla, the Spanish ambassador, whom he suspected of duplicity in the matter, and subjected him to a storm of furious abuse. De Puebla must have passed a bad quarter of an hour, but, as he remarked, he did not so much mind as there was no witness to the interview. He explained that the treaty, by a mistake, had not been proclaimed in Andalusia. He wrote at once to King Ferdinand and asked him that right might be done. A few days later he reported that some members of the Privy Council had visited him on the same matter and that he had had a most unpleasant interview with them. He again begged Ferdinand to give satisfaction, as the English sailors were such savages that he went in fear of being stoned by them if reparation were not made.[13]

Piracy, as has already been noticed, was of common occurrence, and was a great hindrance to sea-borne trade. Surprising as it may seem, it was cheaper to send goods from London to Venice by the overland route, up the Rhine and across the Alps, than it was to send them by sea. This was

## partly owing to the huge expenses incurred for defence against pirates.

One Venetian captain, reporting his safe arrival in London, mentioned that, fearing to be attacked, he had shipped a hundred extra hands and twenty-two gunners, and that by their aid he had beaten off the attack of a Norman pirate. Perhaps the greatest piratical coup of the time was the capture on August 21, 1485, of the entire fleet of Flanders galleys. They were assailed off Lisbon by a force of French ships, commanded by an officer in the service of the French king. After a desperate fight, lasting twenty hours, in which over four hundred Venetians were killed and wounded, four large galleys surrendered.[14] An enormous booty was taken from them, and no one seems to have been punished for the affair. In fact, the deed was justified on the ground that Venice was under a papal interdict and therefore outside the law. Pirates were particularly

## active in the Channel and, besides roving the high seas, were sometimes

bold enough to enter English harbours in search of prey. In 1495 some Frenchmen sailed up Southampton Water and raided the Venetian galleys which were at anchor off the town. They seized, among others, the commander of the fleet and the Venetian consul in England, and held them to ransom, exacting 550 ducats for each.

Piracy was the more difficult to suppress because there was often a very slight distinction between merchant and pirate. Unscrupulous persons frequently combined the two callings as opportunity offered. To check the abuse, a clause was inserted in some of the commercial treaties, to the effect that the owners of vessels, before leaving a foreign port, were to deposit a sum of money as a guarantee of good behaviour, sometimes twice the value of the ship and cargo. Another remedy for the victims of piracy was but an aggravation of the disease. It consisted in the granting of letters of marque or reprisal to the injured parties, thus allowing them to take the law into their own hands. Naturally, the scope allowed them by these letters was very liberally interpreted by the holders, who seem even to have regarded them as negotiable property. An extreme instance was the seizure on the Rhine of certain Milanese merchants, bound for England with their goods, at the instigation of the Emperor Frederick III. This was done on the ground that letters of reprisal against Milan had been granted by a former king of England to a certain merchant, then deceased. His heirs had apparently transferred their rights to the German sovereign.

The extent to which navigation was dependent on the weather is difficult to realize in these days. Communication between England and Spain was almost at a stand-still in the winter. A letter of 1496 mentions that during the first three months of that year the seas had been so rough that few vessels had been able to leave Spanish ports. One courier had been detained two months and another three without any chance of leaving. The diplomatic correspondence between England and Spain, which was dispatched almost exclusively by the sea route, was always much diminished in volume during the winter months, and letters sometimes took many weeks to reach their destination. When Queen Isabella of Castile died and the Archduke Philip, her successor, proposed to travel by sea from Flanders to Spain, he was advised that the voyage could only be made in safety between May and the middle of August. He chose to undertake it in the winter, with the consequence already described. In two months of the year 1498 fifty ships are said to have been wrecked on the coasts of Portugal and Spain.[15]

When the perils of the sea were so great, the trades of pilot and chart-maker, often combined by the same individual, were of great importance. In the absence of official charts of coasts and harbours, the man with local knowledge, who could safely guide a ship to port, was much sought after by merchants, and a pilot of good repute could naturally command good prices for his ‘sea cards’. In regulating these matters Spain was in advance of England. When voyages became longer and more frequent, owing to the extension of American discoveries, a proper system of examining and licensing pilots was established. An office for the purpose was instituted at Seville, and in 1519 Sebastian Cabot, who had by that time left the service of England, was put in charge of it with the title of Pilot-Major. All charts and reports of new discoveries were sent in to this office, and the information contained in them was embodied in a standard map, which was thus kept up to date. The Guild of the Holy Trinity, originating early in the reign of Henry VIII, represented an attempt to organize the craft of pilotage on similar lines in England, but it was long before English pilots attained to the standard of the Spaniards in theoretical knowledge.

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Footnote 1:

_Englische Handelspolitik gegen Ende des Mittelalters._

Footnote 2:

Extended and made permanent in 1489.

Footnote 3:

_Foedera_, xii, pp. 578–91, 654, 713–20; _Cotton MSS._, Galba C ii. 249: ‘A Brief of so much of the Intercourse of 1499 as concerns Merchant Adventurers, with their opinions touching the same.’

Footnote 4:

Hall’s _Chronicle_, 1809 ed., p. 500.

Footnote 5:

_Spanish Cal._ vi, part i, pp. 59–60.

Footnote 6:

_Spanish Cal._ i, p. 21.

Footnote 7:

Ibid. i, p. 144.

Footnote 8:

_Spanish Cal._ i, p. 337.

Footnote 9:

_Venetian Cal._ i, pp. 185, 186, 188.

Footnote 10:

_Foedera_, xii, p. 553.

Footnote 11:

_Venetian Cal._ i, _passim_.

Footnote 12:

_Venetian Cal._ i, p. 213.

Footnote 13:

_Spanish Cal._ i, pp. 366, 367, 374.

Footnote 14:

_Venetian Cal._ i, Preface, lxviii.

Footnote 15:

_Venetian Cal._ i, p. 278.

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