Henry VII: Financial Policy

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Henry's Financial Aims

  • He wanted to achieve solvency by increasing royal income, decreasing expenditure and thereby restoring the Crown's financial strength
  • Where some might say Henry handled royal revenue better than anyone on the english throne, the truth is that he lacked experience in government and was untried and untested in the rigours of financial administration and diplomacy
  • He as acutely aware of the importance of strong finances if he was to remain King
  • The availability of revenue together with financial stability was essential if he was to raise an army to defeat those putting their claims to the throne
  • He did not feel secure unless he was rich; he could use his wealth to bribe opponents, reward loyal services and fund armies if necessary
  • It helped consolidate the dynasty because if the succession was still challenged at the time of his death, a full treasury would provide the heir with resources to fight and retain the throne 
  • He believed a wealthy king was better able to finance his way out of trouble
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Financial Administration

  • In the first two years, he had no experience or time to use the Yorkist practice of using the Chamber to deal witht he kingdom's finance; it was responsible for the King's private income 
  • Under Henry, the Exchequer resumed its control over the nation's finances; in 1487, Henry admitted he had neglected his estates that had 'fallen in to decay' because of his focus on his own security
  • In Richard III's reign they earned £25,000 per annum, by 1486, this declined to £12,000
  • He gradually began to restore the Chamber system as the most important institution of financial administration; by the late 1490s it was once again the centre of royal finance
  • It dealt with revenue from Crown lands, profits of justice, feudal dues and French pension; pretty much everything except for custom duties and the sheriffs' accounts
  • These remained under the control of the Exchequer because their conllection involved detailed information and complex organistaion of officers and records not available to the Treasurer of the Chamber

Treasurer of the Chamber - Chief financial official responsible for the King's money

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The Privy Chamber

  • This was the department that increased the most in importance, as the King's 'Privy [private] Chamber'
  • It took over administration of the household as well as taking care of Henry's private expenditure, formerly the responsibility of the Chamber
  • It continued to play a vital role in Tudor government throughout the 16th century and many Tudor ministers rose from its ranks
  • One of the holders of office during Henry's reign were Lord Dinham and the Earl of Surrey
  • The Treasurer of Chamber had become the chief financial officer of the Crown
  • Under Henry VII, this position was held by two of the King's most loyal servants: Sir Thomas Lovell and Sir John Heron
  • The main advantage of the Chamber system was that it gave the King much closer control over his finances
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Crown Lands

  • He inherited all the lands which had belonged to the houses of York and Lancaster; on the death of his uncle and his wife, the lands reverted to him as well
  • He also enriched the Crown through escheats and attainders 
  • He was fortunate in having few relatives that expected to benefit; Prince Henry was eventually left requireing provision
  • On his death, Crown lands had been more extensive than they ever had been; the annual income increased from £29,000 in 1485 to £42,000 in 1509
  • In 1486, an Act of Resumption was passed in which the Crown recovered all properties granted away since 1455
  • He did not take back all the estates as he did not wish to antagonise the majority of noble families affected by the Act
  • If he was to consolidate the dynasty, he needed the support of the nobility and to compromise
  • The Duchy of Lancaster brought £650 per year to the Chamber but in 1509, it increased to £7000 under Sir Reginald Bray

Escheat - When a landowner died without heirs, his property passed by right to the King

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Customs Duties

  • By 1509 the revenue derived from customs duties had been overtaken by the revenue from Crown lands
  • They still provided a third of royal revenue; from 1487, merchants involved in coastal trading were required to a certificate from the first port sepcifying the duties paid
  • In 1496, he tried to reduce some privileges from some foreign erchants e.g: immunity from English taxation
  • Only updated the Book of Rates of customs duties to be paid in London twice
  • Despite his efforts, customs duties did not increase that much with annual receipts of £33,000 for the first decade of his reign to £40,000 thereafter
  • In spite of stricter control, he was unable to manipulate the international trade, which was dependent on the fragile and changing relationships between all the European powers

Book of Rates - An account book recording the rated of tax paid by foreign merchants on goods imported and sold in England

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Feudal dues and Profits of Justice

  • Henry was determined to to enforce the traditional rights of feudal dues to their maximum extent 
  • The proceeds from wardship and marriage were small amounting to £350 in 1487, in 1503 a new officer was appointed to supervise, by 1507, it increased to £6000
  • Legal fines made a significant contribution to Henry's income as he ensured most criminal acts were punished by fine rather than imprionment/execution; this brought him much more profit 
  • Another type of fine he used as punishment was the Act of Attainder; Sir William Stanley paid the Crown £9000 in cash and £1000 per annum through income on his lands after his trason in 1495
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Parliamentary Grants

  • Extraordinary revenue was money thich came to the Corwn on particular occasions and therefore with no regularity
  • Henry requested financial assisstance in 1487 for the Battle fo Stoke, 1489 for war against the French and in 1496 to defend the throne against the attack from the Scots and Warbeck
  • Historians have accused Henry of cheating his subjects by raising money for wars that never actually took place (1496)
  • It can be argued that the money was still needed in the event of a Scottish invasion in the future
  • There was no further trouble from Scotland, but some of the moeny was used to suppress the Cornish rebellion 
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Loans and Benevolences

  • 1496, Henry was desperate for cash to defeat Warbeck and the Scots; he appealed to his landowning subjects for financial support
  • He seems to have only asked for modest sums around £10,000 and there is no evidence of any resentment
  • This was probably because most of the loans appear to have been paid back 
  • In truth, he had little choice but to repay them because those subjects who were owed moeny were more likely to support the rival claimant to the throne
  • 1491, Henry raised a forced loan when he intended to take his army across the Channel to protect Brittany from French aggression; this produced £48,500
  • This was a considerable amount when compared with the sums yielded by direct taxation
  • Royal Commissioners were stringent in its collecion
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Clerical Taxes

  • He received quite substantial sums from the Church; on several occasions the Convocations followed suit with their own contributions 
  • 1489, they voted £25,000 towards the cost if the French War
  • Henry also made money from simony, charging £300 for the Archdeaconary of Bukingham on one occasion
  • The King kpet many bishoprics vacant for many months before making new appointments to that he could pocket revenue in the meantime
  • Owing to a rash of deaths of bishops in his final years, Henry received over £6000 a year in this way
  • However Henry rarely left a diocese without a bishop for more than 12 months

Convocation - Church equivalent of Parliament where clerics meet in two houses: upper house of senior clerics and lower house representing parish priests to discuss and transact Church affairs

Simony - The selling of Church appointments and offices

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Feudal Obligations & French Pension

  • This was another type of extraordinary revenue
  • As the chief feudal lord, the King had right to demand feudal aid on special occasions
  • This included the knighting of his eldest son, the marriage of his eldest daughter and his own ransom if her were ever to be captured in war; a fate which Henry avoided
  • He was also able to levy distraint of knighthood; the medieval practice of forcing those with the annual income of £40 or more to become a mounted knight to fight for the king in time of War
  • As part of the Treaty of Etaples in 1492 he negotiated a pension from the King of France
  • It was a bribe offered by the French King so the English armies would be removed from French soil
  • He was promised £159,000 to compensate him for the cost of war
  • This sum was to be paid in annual installments of £5000
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Bonds and Recognisances

  • It was the practice of subjects paying a sum of money to the Crown as a guarantee of their future good behaviour
  • Bonds were written oblligations in which people promised to perform specific actions on pain of paying money if they failed to carry out their promise; it was a way of keeping peace and ensuring loyalty to the government
  • Recognisances were formal acknowledgements of actual debts or other obligations that already existed 
  • Almost immediately after Bosworth he demanded a recognisance of £10,000 from Viscount Beaumont of Powicke and a similar sum from the Earl of Westmorland as guarantees of their loyalty in the future
  • During the most insecure years of Henry VII, this financial screw was an effective way of restoring law and order, and shows that in more cases it brought Henry the revenue he wanted
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Use of Bonds and Recognisances

  • During the first decade of his reign, 191 bonds were collected, rising to well over 200 in later years
  • Bonds rose from £3000 in 1493 to £35,000 in 1505
  • Those who fell behind in these payments were hounded by the King's officials, partcularly from the Council Learned, which was made responsible for bonds and recognisances 
  • The Council became greatly feared because of the efficiency of its two officials, Richard Empson and Edmund Dudley, in pursuing defaulters
  • Out of 62 noble families in existence during his reign, 46 were at one time or another financially at his mercy 
  • 7 were under attainder, 36 were bound by recognisances or obligations and 3 by other means
  • It is such evidence that has earned Henry VII his reputation ofr cynicism and greed 
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