It has long been acknowledged that finance was one of Henry Vll’s governmental priorities. His legendary attention to detail is illustrated by the fact that he personally audited and signed every page of his ‘chamber accounts’. These were the income and expenditure record of the king’s ‘chamber’ or immediate personal household. It is characteristic of Henry that he preferred to channel royal finances through this institution, which was under his direct and everyday supervision, rather than through the more formal, more impersonal and above all more distant Exchequer. This attention to detail has been rather mistakenly erected into a standard of royal competence by some modern historians, as though a king were some kind of exalted civil servant, to be assessed by promptness and precision in the despatch of paperwork. In fact, medieval kings were not conceived of as glorified clerks or accountants. If the personal engagement of this king in the nitty-gritty of government tells us anything, it is that he did not even trust his closest servants, but felt it necessary to keep them under intensive and intrusive scrutiny.
What really matters about Henry Vll’s financial policy is the way in which he set about raising revenue. More than any king before him, he was a victim of the baronial myth that the king should ‘live of his own’, that is, that under normal circumstances the king should pay for his court, household, central administration and costs of governance out of his ‘ordinary’ income, rather than by drawing on the common purse of the nation through direct taxation. This myth had first been aired in the context of the deposition of Richard II and the usurpation of Henry IV in 1399. In order to appease the nobles whom he had bounced into acknowledging his claim to the throne, Henry IV had undertaken precisely to ‘live of his own’, turning a short-term and short-sighted slogan into a constitutional principle. Although Henry V had broken free of this constraint thanks to his stunning success in war (the contingency of war was recognised as a justification for direct taxation), the slogan haunted governments throughout the fifteenth century. The only thing which made the principle that the king should ‘live of his own’ remotely feasible was the increase in the acreage and value of the Crown lands over the same period. First the Lancastrians and then the Yorkists extended the Crown lands by adding to them the massive hereditary estates of their houses. And the extinctions and attainders of noble families who chose the wrong side at one time or another in the Wars of the Roses provided further gains. Once Henry VII had taken the throne, the Crown lands were worth some ?40,000 a year. Unlike most previous kings, he showed no intention of using this massive endowment to refill the depleted ranks of the English nobility. Instead, he clung on to it with both hands.
The only form of taxation on which kings could count as a regular source of income was the levying of customs duties on imports and exports. Although even customs revenues depended upon parliamentary grant, it had become traditional for these duties to be granted to each king for life in the first Parliament of the reign. Perhaps a House of Commons already tending to be dominated by the landed gentry was happy to grant the king taxes which, at least in appearance, weighed on merchants and tradesmen rather than on themselves, and perhaps the merchants were only too well aware of how closely their prosperity depended on the favour and protection of the king. At any rate, the customs were granted to Henry VII as usual, and formed a crucial part of his budget. As customs duties were levied upon quantities rather than upon prices (in other words, like modern UK petrol duty rather than like VAT), they tended to rise only with the volume of goods traded, not with prices. Given the slow pace of technological change and economic growth (when there was any - markets then were even more volatile than now), there was not much that the king could do to increase the yield of the customs (nor indeed of the Crown lands), other than to raise the rates on unit volume. This was always contentious, though Henry actually managed to impose a new book of rates in 1507. Not until 1558, after half a century of massive inflation, would the customs duties be revalued again, and then only under the pressure of paying for an unsuccessful war. The impact of Henry’s revaluation was worthwhile. Early in his reign the customs yielded about ?33,000 a year on average; by the end, about ?40,000 a year.
The third main component of the king’s ‘ordinary’ revenues comprised the fruits of his ‘prerogative’, namely the ‘profits of justice’ and ‘feudal incidents’. It was here that the king looked to squeeze extra income out of his kingdom. The ‘prerogative’, that bundle of rights and powers which belonged to the king under English law by virtue of his office, became a subject of particular interest in Henry VII’s reign precisely because of the vigour he showed in exploiting it. Fines (after the deduction of various costs) eventually made their way into the king’s coffers, and Henry was especially keen not only on collecting these fines, but also on adding to the range of offences which were punishable by fines. Indeed, it has been suggested that for all his apparent concern with law and order, he was for the most part only bothered about enforcing those laws which brought financial returns.
‘Feudal incidents’ were payments which the king received by virtue of his position at the pinnacle of the social pyramid. Landowners whom the law classified as ‘tenants-in-chief’ were deemed to hold their lands directly from the king in return for feudal duties (mostly military service) owed to the king. Tenants-in-chief were obliged to pay fees (‘entry fines’) to the king when they came into possession of their lands by inheritance. In addition, because heirs under the age of twenty-one and female heirs or widows were unable to perform military service, when the lands fell into their hands, the king drew the profits until their death, marriage or majority. The increasingly fragmented results of the land and marriage market, combined with the political disorders of the fifteenth century, had tended to reduce the value of these feudal incidents to the Crown. At first under Edward IV, and then with a vengeance under Henry VII, the Crown set about reclaiming its feudal rights. Assisted by rising lawyers with an eye for royal favour and Crown office, the extent of the royal prerogative was pushed outwards by fair means or foul - hence the increasing attention paid to the prerogative in lectures at the Inns of Court (which at that time were the institutions where England’s lawyers were taught and trained).
The moment of inheritance was the point at which much landed wealth came for a moment within the king’s grasp. ‘Inquisitions post mortem’ (‘investigations after death’) were held whenever a landowner died, with a view to establishing how much land, if any, he held from the king. Royal commissioners were appointed to pursue the king’s claims, and the line between investigation and intimidation was easily and often crossed. Sworn juries were induced to favour royal claims, and there was a tendency to define more and more of a person’s land as held directly from the king. Where landowners, heirs or widows infringed regulations or failed in their feudal obligations, inordinate fines were levied upon them (or their heirs). Thus, the Duke of Buckingham was mulcted of a stupendous ?2,000 because his widowed mother had omitted to seek royal permission before remarrying. The exaction of fines and dues under the royal prerogative became a major industry under Henry VII. Towards the end of the reign, his average income from wardship was over ?9,000 a year, and a new royal official, the Surveyor of the King’s Wards, was established in 1503 to manage it more efficiently. His income from feudal fines and the other profits of justice was probably even greater, but is harder to calculate. The exploitation of prerogative income culminated in 1508 with the creation of another new officer, the Surveyor of the King’s Prerogative, to supervise and co-ordinate the business - and to ensure that the collection and handling of the monies were kept closely under the eye of the king. Henry VII’s notorious officials, Richard Empson and Edmund Dudley, were the men most closely associated with the exploitation of the royal prerogative. This earned them arrest and execution in the next reign, and it is from notes left by Dudley that we know many of the details of their activities.
For all its morally and even legally dubious aspects, Henry VII’s financial policy was, in purely financial terms, a success: Henry wiped out royal debt and accumulated a legendary treasure. Unfortunately, its scale is literally legendary: we do not know for certain just how much he had in chests in his private apartments. Francis Bacon, writing over a century later, claimed on the basis of documents now lost that it was upwards of ?2 million. Although his figure has been discounted for some time, there is a possibility that he was right. For the best figures available regarding Henry VIII’s wars in the first years of his reign show an enormous gap between income and expenditure which can only have been bridged by the treasure his father left. Henry VII died in cash terms probably the richest king England has ever known.
This cash surplus has long been regarded as one of Henry’s greatest achievements. However, in a compelling challenge to the general consensus on his success as a king, Christine Carpenter has questioned what use this surplus could possibly have been, given that it was far in excess of his ordinary expenditure needs, yet unequal to the burdens of a foreign war (the main extraordinary call upon revenue) - even had he had any intention of fighting one. She is certainly right to see his overflowing treasury as an index of his vulnerability and poor credit. Henry clearly never felt safe enough to run up debts or raise taxes in the manner of more secure kings. Moreover, the range of dubious fiscal expedients to which he and his agents resorted in order to fill the treasury had a huge political cost in terms of unpopularity and especially aristocratic grievance. Several earlier kings who had pursued similarly extortionate policies had met with the wrath of their barons, for such policies offended not only their vested interests as landowners but also their sense of justice - the maintenance of which was generally recognised as a king’s primary responsibility before both God and man.
So was Henry’s financial policy worldly wisdom or inexplicable folly? Granted that even his treasure was inadequate to the costs of foreign war, was it a pointless gain made at intolerable political risk? In fact, given Henry’s character and circumstances, a case can be made, if not for the wisdom, then at least for the utility of his policy. It can be explained even if it cannot be justified. His greatest fear was that he would fall victim to just such an attempt on his throne as he had himself launched against Richard III. While it might be argued that he should have relied on the basic loyalty to the ruler prevalent in England, he could see for himself the increasing reluctance of the nobility to fight on either side in a dynastic conflict. One thing that an ample treasure certainly could do was to underwrite the costs of a single campaign at home. If Henry should ever have faced a coup like his own, at least he had the wherewithal to raise large numbers of troops very quickly. This rationale was not, of course, offered by the king. But that this may have been the purpose of his treasure is suggested by a passage in Thomas More’s Utopia, so much of which commented or reflected on the recent history of his own country. For More included among his reports of fictitious transatlantic societies a reference to one in which the king was limited by law as to the scale of treasure he could accumulate: it was to be just enough to permit him to overcome a rebellion, but not so much as to encourage him to rule tyrannically over his own people or strive after foreign conquests. Given More’s youthful service with Cardinal Morton, this is the sort of idea which might well have been current in the governmental circles around Henry VII. But even if security rather than almost aimless accumulation explains Henry’s huge treasure, it does not justify the political cost at which it was gathered. Thomas More’s comments suggest that he saw Henry VII as having overstepped the mark. The two risks he points out, of tyranny at home and vain aggression abroad, might well be reflecting on the latter years of Henry VII and the early years of Henry VIII.
World History
