Alexandra Gajda

Counting the Queen’s Pennies

Gresham’s Law: The Life and World of Queen Elizabeth I’s Banker

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To his 19th-century biographer J W Burgon, the Tudor merchant, banker and diplomat Sir Thomas Gresham (1519–79) was one of the heroic worthies of the 16th century, embodying the spirit of that transitional epoch, when ‘England was raised to that proud eminence in the scale of nations which she has ever since maintained’. The appeal of Gresham to the Victorians is obvious: the most important financial agent of three successive Tudor monarchs (Edward VI, Mary I and Elizabeth I) and founder of the Royal Exchange, the first English credit market, he was exalted as the originator of England’s national commercial pre-eminence. Following the triumphant opening by Queen Victoria in 1844 of the third Royal Exchange building (Gresham’s emblem, a gilded grasshopper, still crouches atop its campanile), Catte Street nearby was renamed Gresham Street in his honour, and Gresham College – the educational institution founded in 1597 under Sir Thomas’s will to provide public lectures for London citizens – moved into opulent (though temporary) buildings on one of its corners. In 1857, the economist Henry Dunning MacLeod erroneously declared this hero the inventor of the principle, now known as Gresham’s Law, that ‘good money drives out bad’ (in fact, this was an ancient maxim that was coined as early as the fifth century BC by Aristophanes in his play The Frogs and was never articulated by Gresham himself).

In light of Gresham’s Victorian celebrity, it is remarkable that John Guy’s impressive new biography of him, written to mark the quincentenary of his birth, is the first to appear since Burgon’s life of 1839. The latter, an imposing monument to 19th-century archival scholarship, is now surpassed by this definitive work, for which Guy consulted almost 10,000 pages of previously unstudied manuscript material, including, he rather wearily informs us, hundreds of pages of legal records sifted from the voluminous archives of the courts of Chancery and Star Chamber.

Given the hyperbole that characterises its forerunner, Guy’s work is necessarily a revisionist account. Where Burgon defined Gresham excitably as a paragon of every public and private virtue – patriotism, probity, philanthropy, familial piety and marital fidelity – Guy’s portrait is of a man single-mindedly motivated by a desire to enrich himself and advance his family socially, whose financial dealings involved skulduggery and deception, who exploited his father’s will to the detriment of his aggrieved siblings, stripped the assets of his stepchildren’s estates and tried to swindle his illegitimate daughter out of her marriage portion. Despite accumulating a vast fortune through trade, financial deals and the leasing or purchase of ecclesiastical property, he nevertheless died in debt to the sum of £23,030 (over £23 million in modern terms), passing on his liabilities to his long-suffering wife, Anne Ferneley.

The visionary ‘founder’ of the Royal Exchange had originally intended to call it Gresham’s Bourse, though Elizabeth I was having none of that. This venture required considerable investment from the City of London Corporation and the Mercers’ Company. Gresham breezily promised that they would, in return, enjoy the profits of the Royal Exchange after his and his wife’s deaths. However, this legacy was accompanied by a tremendous unexpected liability: his will stipulated that they were to plough almost all of these anticipated profits into Gresham College, which noble institution they were to erect from scratch and administer in perpetuity. Inevitably, Gresham, who had exhibited little interest in learning or intellectual pursuits during his life, left his burdened trustees hardly any instructions on how the institution intended to immortalise his name should be run.

And yet, Gresham played an essential part in ensuring the stability of Tudor rule, in ways not always recognised in textbook histories of the period, which tend to foreground religious rather than economic transformation as the defining current of the age. Gresham performed the almost unparalleled feat of serving three monarchs of sharply different religious views by providing an indispensable service: he understood perhaps better than any of his English contemporaries that princely power – particularly military clout – was dependent on rulers’ access to the credit markets of northern Europe, which were dominated by the Habsburg rulers of the Netherlands and Spain.

Through his personal knowledge of the Antwerp bourse and his network of friends, agents and spies, Gresham proved simply more adept than any of his peers at manipulating these markets on the crown’s behalf, almost eliminating the government’s foreign debt in the early years of Elizabeth’s reign. Presciently recognising in the mid-1560s that the Flemish markets were threatened by growing political and religious unrest, which would eventually erupt into full-scale revolt against Habsburg rule, Gresham believed that the English crown could achieve sustained financial stability through a permanent shift in royal borrowing to the safer and more controlled environment of the City of London, the merchants of which could be enforced to lend to the Treasury at guaranteed rates of interest. By securing all credit domestically, he explained, Elizabeth could proclaim to all Europe ‘what a prince of power she is’.

Guy steers the reader through the dizzying world of Gresham’s financial and commercial transactions with the lightest touch he can muster. And this important biography deserves a wide readership, as the story of Gresham’s career in the service of the crown presents a new optic on the famous events of the mid-Tudor age, allowing us to view them from the perspective of the City rather than Whitehall. Gresham knew – and performed services for – almost everyone significant at court. We observe him personally delivering a jewel shaped like a Habsburg eagle to Queen Mary and sourcing silk, tapestries, clocks, shirts, stockings, maps, velvet chairs and sausages for Elizabeth’s chief ministers Robert Dudley and William Cecil. At the famous moment of Elizabeth’s accession, when would-be statesmen and courtiers were racing to pay homage to the new queen at Hatfield, Gresham was pelting back from Antwerp to join the scrum, arriving splattered in mud but nevertheless securing reappointment as the crown’s banker at the first meeting of the new Privy Council.

Like many of the City elite, Gresham aped the life of a courtier. He entertained Queen Elizabeth on many occasions in his lavishly furnished homes and commissioned an extraordinary double portrait of himself and his wife from Anthonis Mor, court painter of the Habsburgs. He also acted as a diplomatic envoy to the Habsburg court at Brussels in the early 1560s, gave bluff, unsolicited advice to Queen Elizabeth that she should marry a Habsburg prince, and acted as the reluctant warder of the unfortunate Lady Mary Grey, whom the queen kept prisoner on account of her proximity in blood to the throne. And yet for all this vital service, Gresham’s hopes that his endeavours would be gloriously honoured by his wily new mistress were disappointed. He complained bitterly that Elizabeth failed to live up to her promise to reward him, as her brother and sister had done, with generous grants of land. On his death, the most significant of Gresham’s many creditors was the crown. In the final monarch he served, Gresham met a character as uncompromising and single-minded as he was.

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